Is Universal Life Insurance Taxable? 
That is a great question ! One of the selling points that your agent will give you when selling you this type of policy is the great cash growth that it can accrue . Managed correctly , it can do that . When you pass , the death benefit is passed tax free . If you borrow from the cash reserves in the policy , those loans are also tax free . If you surrender the policy , -LRB- or `` cash out '' -RRB- then all of that growth in excess of what you paid into it is taxable . And if your policy did well , that can be a big tax bite . Check with your agent before you take any action , as even borrowing can have a big impact on your policy 's viability , okay ? Thanks for asking ! 