@GaryinOz2002 , I don't know how to answer you ( for the fee being charged by the admin of the policy ).
May be an example would help ( in this predicament ) and irrespective of when you cam into the USA and became a resident . --
Say you got a life policy with a face value of US$20,000 and for 30 years you paid a total of US$5000 in premiums ( actually paid i.e. above and beyond the re-invested dividends ). For US tax purposes , if you declare the total received as US$20,000 ( either as "other" or as interest/dividend " income :
(a) without the basis of US$5000, you would be taxed at your ordinary income slab on US$20,000
(b) if you instead claim the basis as US$5000 and a gross income of 20,000 , you would be taxed on US$15,000 as ordinary income.
Without the details of the premiums levied/paid , you would not be able to withstand a challenge of the basis.
On the subject of re-invested dividends, ideally and atleast from the time you became a resident of the US ( Green Card or Resident for tax purposes ), you should have been reporting the dividends received/ declared and be taxed on the income ( irrespective of whether re-invested/ premium or expensed ). At this stage it may be too late to go back and correct this -- so I would take a chance , use the dividend as an offset to the premiums due. I can stand an audit on this because it is too late to update and in the sum-total of taxes probably would not have a sufficient difference.
Does this make sense to you?
pk
