An insured decided to surrender his Whole Life insurance policy which he purchased 30 years ago. The insured was paying annual premiums of $500 while the policy was in force (which added up t0 $15,000). When he surrendered the policy, the cash surrender value was $18,000. What part of the surrender value would be income taxable?

An insured decided to surrender his Whole Life insurance policy which he purchased 30 years ago. The insured was paying annual premiums of $500 while the policy was in force (which added up t0 $15,000). When he surrendered the policy, the cash surrender value was $18,000. What part of the surrender value would be income taxable?


A. $1,000

B. $3,000

C. $15,000

D. $18,000



Answer: B. $3,000

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