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any way to avoid tax on cash value life insurance?

I plan to cancel my cash value universal life insurance policy which I have held for about 20 years. The cash value fund has about 100k, and about 15k of that is "available for taxable withdrawal" per my account summary on the insurance company website. Is there any way to avoid paying income tax on that 15k? Maybe a rollover to a 529, or give the cash value fund to my adult child? (My guess is, there is no creative way to avoid the tax, but I just wanted to check before cancelling and withdrawing the cash value). Thanks.

Reply to
rachelms79
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If you are normally able to itemize deductions, you could donate the $15k to a charity of your choice, thus avoiding income tax on the amount.

Reply to
Tom Russ

If you actually cash it in and receive the money, I'm not aware of a way to avoid paying tax on it. You could just borrow it out and keep the policy in force. Then when you die the loan will be paid off by the "death benefit" (that term always makes me pause) and it will at that point be tax free.

Reply to
Stuart O. Bronstein

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