Is Cash Value From A Life Insurance Policy Tax Free? 
Video Transcript : Hello , everyone . I 'm Steve Savant , syndicated financial columnist and host of the weekly online talk show `` Steve Savant 's Money : The Name of the Game . '' I 'm answering questions from insurancelibrary.com , and today 's question is : Is cash value from a life insurance contract tax-free ? Well , if it 's set up as a non-modified endowment contract that complies with a law called TAMRA , and we keep that contract in force for the life of the policy insured , remember not the owner of the policy , not the payer of the premium , but the life of the insured , withdrawals to basis and policy loans of gain can come out tax-free . And as long as that contract , as I 've said , is kept in force , that income is never placed on your 1040 , so it 's never counted as a taxable event . This is huge , because then you do n't have any correlation later on in your retirement for Social Security , for the provisional income test or almost all other income sources have to be tested for Social Security to find out if your benefits are taxed or not . Well , that 's our consumer question for today . If you have any questions , just submit them to www.insurancelibrary.com . 