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whole life insurance cash out

whole life insurance cash out

How much tax will I pay when cashing in insurance for the whole life policy?

My grandfather started a mass mutual whole life insurance policy for me when I was born. I started to pay annual premiums, when he passed 2 years ago. annual premium is $ 250. I'm looking to buy my second home and want to cash out the policy and use the money to pay deposit. I am 26 years old and life insurance through work for $ 100,000. If I remove all the politics, the present value of cash is $ 70,000, what I want to taxes. Will he just be on my 2008 taxes? Taxed as regular income? How should I set aside to cover this income? Thank you for your help.

OK, so that the policy owner? Capital gains would be due on the difference between premiums paid and the money withdrawn. But I seriously, seriously doubt the redemption value is $ 70,000. I guess closer to $ 2500. But the contract holder is the only person who can cash in