Are there tax consequences for surrendering a life insurance policy?

Are there tax consequences for surrendering a life insurance policy?

You can generally expect to get a surrender charge within the first 10 or 20 years of owning the policy, and over the course of time the surrender charge phases out. You won’t be taxed on the entire surrender value, though. You’ll be taxed on the amount you received minus the policy basis. Jan 20, 2022