Do you have to pay taxes when cashing out a life insurance policy?

Do you have to pay taxes when cashing out a life insurance policy?

Is life insurance taxable if you cash it in? In most cases, your beneficiary won’t have to pay income taxes on the death benefit. But if you want to cash in your policy, it may be taxable. If you have a cash-value policy, withdrawing more than your basis (the money it’s gained) is taxable as ordinary income. Sep 15, 2021