Is a small life insurance policy put into a savings account the same thing as earned income savings?

Lee asked:


I am wanting to know if I have to report as savings a small life insurance policy that is not earned income. I keep it in a savings account but it is not considered as earned income right? I am wanting to protect it if at all possible for emergencies only.

5 Responses to “Is a small life insurance policy put into a savings account the same thing as earned income savings?”

1. jlf says:

   February 2, 2010 at 8:04 am

   No. How does one keep a life insurance policy “in a savings account”?
2. car253 says:

   February 2, 2010 at 2:45 pm

   Any cash in the policy is called cash value. It is not taxable unless you cash in the policy and get more out of the policy than you paid in. It is called a taxable gain. You have to have the policy many, many years to have that happen.

   Life insurance is NOT a savings or investment. You would probly be better putting that money into a savings or investment account.
3. mbrcatz says:

   February 2, 2010 at 11:53 pm

   You can’t put a life insurance polciy into a savings account.
4. danger says:

   February 5, 2010 at 1:27 pm

   Are we talking a life insurance policy or just a sum of money kept in a savings account which you consider to be for your final expenses? If it were truly a life insurance policy with cash value, the cash value would not be taxable as long as the policy is in force. If it is just a savings account with a sum of money in it, the growth on the savings account will be taxable from year to year.
5. geets says:

   February 6, 2010 at 12:04 am

   y dont u confirm this here