I have had a life insurance policy for about 30 years. If I surrender policy for cash value, is that amount taxed?

  • by Judy
  • Nov 08,2018
  • 10 answers

I have had a life insurance policy for about 30 years. If I surrender policy for cash value, is that amount taxed?


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Insurance Answers (10)

mbrcatz 5 days ago

You pay taxes on any GAIN that you have - ie, the amount OVER what you've paid in, for all of these years, is taxable.

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slotsforme last week

Keep in mind if you cash it out, you cant purchase that amount of life insurance for the same money
Leave it alone and use it as part of a retirement income
Or at the least borrow on it and then pay it back with a small interest added
It is almost like borrowing from yourself

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Big Deal Maker last week

No it is not taxed. You paid the policy with pre- taxed earnings.

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james last week

Normally yes. There are a few policies No. You will need check. Going back 30 years maybe not.

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Isreal last week

Well...

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Eva last week

The amount you receive that exceeds the premiums you paid is taxed.

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oldprof last week

Yes. You should get a 1099 from your carrier.

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Kellie last week

H

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curtisports2 last week

Anything returned to you in excess of premiums you paid for the insurance is taxable income. If you surrender the policy, you will receive a 1099 from the company the following January, which will break it down for you - the amount you received and the taxable amount.

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Insurance Pickle.com last week

You pay in $10 and get back $12...then the $2 is taxed. Pay in $10, get back $9...not taxed. So, not the whole amount would necessarily or typically be taxed. They do factor in previous loans received as well.

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