Benefits are not taxed for the beneficiary. The estate of the policy holder could be taxed via the "Estate Tax" if applicable for the decedent with an estate this year of over $5,250,000. That will leave most estates untouched also .
The life insurance benefits are tax free from income tax to the names beneficiary. If the insurance company holds on the proceeds after your death and distribute the funds to your beneficiaries, the principal portion of the payment is tax free. When he transfers the ownership to another party while he is still alive, then it will be included in income tax to that beneficiary. You can consult the IRA for clarification.