I now tried the "keeper" website Artificial Intelligence, among other sources:
AI accountant’s answer:
When you surrender a life insurance policy, the taxable amount is calculated as the difference between the total cash received from the surrender and the premiums paid for the policy. Dividends used to reduce premium payments and buy paid-up insurance are generally considered a return of premiums paid and not treated as taxable income. However, in your case, it seems that the insurance company has subtracted the dividends from the cost basis, which may not be accurate. It's essential to review the calculations and amounts reported on the 1099-R form carefully. If you believe that the insurance company made a mistake on the 1099-R, you should get in touch with them for clarification and request a corrected form if necessary. Keep in mind that it's essential to report the taxable amount correctly on your tax return to avoid potential complications with the IRS.
