By: K M

K M — Thu, 04 Mar 2010 14:38:45 +0000

pay taxes on the difference between what you paid in and how much you cash out.

By: rhsaunders

rhsaunders — Thu, 04 Mar 2010 13:39:02 +0000

If you cashed out, I suspect that you would realize income of $66,000 + $64,000 – $50,000, or $80,000. This is enough of a hit to justify a visit to a tax consultant. Since the value of the policy has grown from $50,000 to $130,000 in 23 years, your compound rate of return on the original investment is 4.15% per year. Nothing to brag about, but you did have insurance coverage.

Comments on: I purchased a single premium whole life insurance policy in 1984. I am confused about the tax on policy loans

By: K M

By: rhsaunders