The cash value in a permanent life insurance policy typically grows on a __________ basis.

Question

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The cash value in a permanent life insurance policy typically grows on a tax deferred basis. Because of this, the gain in the cash value will be taxed to the recipient as ordinary income if it is withdrawn. There may also be tax consequences on the amount of any policy loan that has not been repaid if the policy lapses or is cancelled.

The Cash Value in a Permanent Life Insurance Policy Typically