Is Life Insurance Cash Value Taxable Income? 
Is life insurance cash value taxable income ? Yes , no , maybe depending on how your policy is structured . Depending on the type of cash value life insurance you purchase and how much you fund it , there can be taxable income situations . There are choices you can make with some policies that create current income taxes on the gains . Most people avoid this election choice so their policy can grow tax deferred . Cash values can be withdrawn several ways as well to be non taxable . Death Benefits to beneficiaries are usually always tax free . 