<tfrieling[at]gmail.com> wrote in message
news:1141846848.034585.230160[at]u72g2000cwu.googlegroups.com...
- quote -


YES Tim, he would be required to INCLUDED ALL of the
PROFITS of the policy. The profits of the policy could include
monies that were used to pay premiums.

Did he make "policy loans???????? If he did, then the money
that he "borrowed" would not be taxable, but the earning that
were used to pay back the loans would be.

In any event, just contact the carrier, and they will give you
a breakdown.
Cal Lester CLU

My father has a variable life insurance policy that he has had for
about 35 years. For most of that time he has paid only part of his
premium payments and let the investment portion of the policy pay the
other half. Lately though he has had to pay the full premium amount
since the investment portion does not have enough in it to cover the
premium. He is now thinking about cashing out this policy and was
wondering what would be his tax liability. Will he have to pay tax on
the cash value of the policy or will he have to pay tax on the cash
value plus the cash amount he used to pay partial premium payments on
in the past. I am confused as to what his tax liability is so any help
would be appreciated.

Thanks,

Tim