An owner of a life insurance policy that includes an investment element must recognize income equal to the annual increase in the policy's cash surrender value.

Name: An owner of a life insurance policy that includes an investment element must recognize income equal to the annual increase in the policy's cash surrender value.
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The increase in cash surrender value of a life insurance policy is generally not recognized as taxable income until the policy is surrendered or matures.

An Owner of a Life Insurance Policy That Includes an Investment