Life Insurance Calculator |
Life insurance proceeds received after the death of the insured are not subject to income tax.
However, many people surrender
their policies for cash surrender
value or sell them in the life
settlement market. Both of these types of transactions
are taxable events for income
tax purposes.
See our website page on life
on the tax rules for these trans-
actions. The tax treatment differs for whole life versus
term life, whether it is sold
or surrendered, and also
whether the insured indi-
vidual is terminally or
chronically ill.
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You do have cost basis in the life insurance contract which you can use to reduce your taxable gain. Click on the image of the life insurance calculator to the right for help in calculating your taxable gain and after-tax sales proceeds.
Know what your after-tax sales proceeds will be before you make a decision to sell or surrender your policy.
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Life Insurance Calculator |
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