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Is investment growth and earnings within a universal life insurance plan taxed as interest income?

April 26, 2017Earnings growth income Investment Life Insurance Plan TAXED universal

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Is investment growth and earnings within a universal life insurance plan taxed as interest income?

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Investment growth and earnings attributed within a universal life insurance policy does not distinguish between interest, capital gains and dividend income. Therefore, even if growth comes from equity- or dividend-linked investments, all is considered interest income for tax purposes. This usually does not matter as the policy is structured to be exempt from annual accrual taxation.