I received a 1099-r distribution from a life insurance policy, but I did not actually receive the money as the policy was surrendered.

[MaryK4]

If you did not receive any cash for the surrender it means there was no value in the policy.  Generally speaking, any gain in your policy will be taxed as income,. The amount of money you put into your life insurance policy, known as the cost basis, is not subject to taxation because after-tax dollars were used to fund the policy.

The taxable amount should be in box 2.

[s3ters]

Thanks. I guess I didn't state my question correctly. The policy premiums were being paid out of the dividends and value of the policy via some automatic premium loan provision I had on the policy from 1994. I exchanged a certificate my mom bought when I was a baby, and for the first 6 of 10 years, the premiums were paid out of the funds from that  certificate. I have never paid any premiums and thought that once the value of the certificate was gone, it would just be surrendered. The last communication I received from them was in 2012. It was a billing statement stating premium paid on 4/1/12 of $107.70, plus $8.60 interest paid. The last line stated New Loan: $116.30. Why would they continue a policy for so many years? 

[macuser_22]

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@s3ters wrote:

Thanks. I guess I didn't state my question correctly. The policy premiums were being paid out of the dividends and value of the policy via some automatic premium loan provision I had on the policy from 1994. I exchanged a certificate my mom bought when I was a baby, and for the first 6 of 10 years, the premiums were paid out of the funds from that  certificate. I have never paid any premiums and thought that once the value of the certificate was gone, it would just be surrendered. The last communication I received from them was in 2012. It was a billing statement stating premium paid on 4/1/12 of $107.70, plus $8.60 interest paid. The last line stated New Loan: $116.30. Why would they continue a policy for so many years? 

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That is a question you need to ask of the insurer of the 1099-R.    Nobody here can know why they issued the 1099-R.

We can only guess and our guesses will probably be wrong.

[s3ters]

Ok, thank you for your time!!