In general,if a life insurance policy is sold or surrendered for a lump sum before the death of the insured,the amount received is taxable to the extent it exceeds the premiums paid.

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The amount received from selling or surrendering a life insurance policy for a lump sum before the death of the insured is taxable to the extent it exceeds the premiums paid.

In General,if a Life Insurance Policy Is Sold or Surrendered