Is The Cash Surrender Value Of Life Insurance Taxable? 
Cash surrender value comes only with Whole Life Insurance , never with Term . It is the amount you can terminate your policy and receive . That amount includes both what you put in and what profit you made . The profit is taxable , just as most profit would be taxable . A far better idea would be NOT to surrender your Whole Life Policy , but instead to keep it and borrow against it and either then not repay it or choose to repay it as you wish . You continue to grow in value , even when the loan is out , and your policy stays in force , although the death benefit is reduced by the loan until it is paid back . There are numerous option you should discuss with a qualified agent . Gary Lane , Registered Representative , New York Life , 949 797 2424 . Call anytime . Thank you . 