Llife insurance dividends used to reduce the premiums are not taxale, but what about those dividends used to buy more ins

Asked about 2 years ago - Thiensville, WI

The policy is paid up and new dividends are being used to purchase more insurance. Will those dividends ever be taxable

Attorney answers (3)

  1. Ryan Michael Davidson

    Contributor Level 15

    5

    Lawyers agree

    Answered . Generally speaking, life insurance dividends are not taxable until they equal the net you've paid in premium. Once you hit that point, then yes, they're taxable.

    This answer does not constitute legal advice and does not establish an attorney-client relationship.
  2. David J. McCormick

    Contributor Level 20

    3

    Lawyers agree

    Answered . I agree.

    DISCLAIMER: David J. McCormick is licensed to practice law in the State of Wisconsin and this answer is being... more
  3. Evan A Nielsen

    Contributor Level 18

    2

    Lawyers agree

    Answered . Not until they exceed certain limits. Your Insurance Agent should be knowledgeable in this area, and while not a tax attorney, the company he represents likely has some on staff so get his take on the issues and if it doesn't make sense, you'll find plenty here who can do the same.

    Good luck.

    Evan A. Nielsen

    1255 W. Colton Ave., #506 | Redlands, CA 92374
    Main: 909.363.4658 | Fax: 480.304.3211
    Evan.Nielsen@NLGLaw.com
    www.NielsenLawGroup.net

    Mention this post for a free consultation

    Evan A. Nielsen is licensed to practice law in California. The information provided here is for educational... more

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