In reference to the answer that was posted by @VictoriaD75
Capital gains, if recognized on the sale of a life insurance policy, are fully taxable (rare exception for situations arising from demutualization) -but the Internal Revenue Code, and the Tax Court, do not view a life insurance policy to be an investment product and therefore a loss on the sale (you paid in more on net premium than you received on the sale) is NOT deductible as a capital loss.
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