What are the tax consequences of cashing in your whole life insurance policy?

If you cash in a whole life insurance policy, you will have to worry about the tax consequences that are involved. When you put money into a whole life insurance policy, it is allowed to grow on a tax-deferred basis. This means that if you take out all of your money, you will have to pay taxes on the amount that you gained. If you take out only what you originally paid into the policy or less, you will not have to pay taxes on that amount because you have already paid taxes on it. The taxes will be due only on the amount of earnings.

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