Life & Health Insurance/Cashed in whole life

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Question
I did a cash surrender of my whole life policy and put it towards my house.  I paid the policy monthly after taxes.  Do I have to pay income tax on that money? Thank you for your answer.

Answer
Dear Kathy,

Had you contacted me first, depending on the policy, I might have suggested a different approach. However, to answer your question: You will be taxed on only the amount received that would be greater than the sum of the premiums paid.

Willard R. Brumbaugh, LUTCF
(888) 792-2379

Life & Health Insurance

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Willard R. Brumbaugh, LUTCF, CSFP

Expertise

I can handle questions concerning life insurance, it`s tax implications, how to determine what is appropriate, and how it fits in one`s estate and retirement planning.

Experience

For 2 1/2 years I was an expert on AskMe.com, where for most of that time I was ranked #1. I have been a moderator (instructor) for the Life Underwriters Training Council. I have been licensed since 1969. Organizations I belong to: National Association of Insurance and Financial Advisors - California and the Inland Empire Estate Planning Council. I hold the professional designation of Life Underwriters Training Council Fellow.

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