In general, when a taxpayer cashes out a life insurance policy before death, taxable income may result. However, if the taxpayer is the portion of the proceeds used for long-term care is excluded from gross income. If the taxpayer is Need help? Review these concept resources. Read About the Concept ill, ill, the proceeds are NOT taxable.

In general, when a taxpoyer cashes out a ife insurance policy before death, taxable income may resuit, However, if the taxpayer is the portion of the proceeds used for iong term care is exciuded from gross income if the taxpayer is iII, the proceeds are NOT taxable. Need help? Review these cencept resources. L. Read About the Concept