What tax implications should I consider when it comes to life insurance cash values, dividends, and death benefits?
The accumulated interest portion of the annual increase in the cash value of the life insurance policy is not taxed. General speaking, dividends are considered to be a “return on premium” and are not taxable items. If you have further questions or require confirmation on income, gift tax, inheritance, and estate situations that may affect a life insurance policy you own or are considering purchasing, please consult with your tax adviser.
