Cash-value accumulations in life insurance are taxed as they are earned.

Name: Cash-value accumulations in life insurance are taxed as they are earned.
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Cash-value accumulations in life insurance are not taxed as they are earned. The buildup of cash value is tax-deferred, meaning it is not taxed until the policyholder withdraws or surrenders the cash value. However, if the policyholder takes out a loan against the cash value, there may be tax implications.

Cash-Value Accumulations in Life Insurance Are Taxed as They Are