@samgup generally agreeing with @Opus 17 , and having gone through the US-India tax treaty, there are two scenarios to consider ;
(a) a whole life insurance policy is surrendered by the owner ( by a Resident of the USA or a Resident for tax purposes) ---- in such a case the payout /distribution consisting of contributions by the owner and any growth to date less any fees that the administrator charges. US insurance company will generally issue a 1099-R showing the gross distribution and the taxable distribution ( being the growth less fees charged ). This is what you will be taxed on. Since a foreign insurance entity may not issue such a document, you will have to create one from the available information provided by the administrator of the policy. Note that unless you have to records to prove the exchange rates at each contribution, one may use the exchange rate at time of distribution as a stand-in ( even though technically correct format would be to use some kind of averaging ( like annual one published by the US treasury)
(b) the insured passes and the proceeds of the policy are released to the estate of the decedent for the beneficiary of record or distribution to inheritors. In such a case there generally is no taxation.
Does this answer your query ? @Opus 17 is much more an expert on annuities/retirement distribution and insurances than I am -- I just deal with international taxation -- perhaps he will comment on this
