Are you sure about this? If someone dies and they have a $2 million life insurance policy, there is a named beneficiary for that policy. Doesn't the $2 million get paid directly to the beneficiary? If that's the case, then how can it be included in the estate of the deceased?
Yes, I am sure. But don't forget you now need a estate in excess of 5 million. For the very wealthy the life insurance is not paid to individuals but to a Trust that pay the tax
However there are ways to take the life insurance out of your estate for federal estate tax purposes. Many create an Irrevocable Life Insurance Trust. The Trust owns the policy and provided you jump thru the right hoops it is not calculated into ones Gross Estate.
The 5M is only if the tax deal goes through, it is 1M if it doesn’t if I read this right.
http://legallyeasy.rocketlawyer.com/federal-estate-tax-law-change-bush-tax-cut-extension-9575