Is the payout of a mature VA endowment policy taxable?

[wmadison84]

Purchased National Service Life Insurance policy entering US Navy in1943 and paid up policy about 15 years later. Dividends purchased additional insurance. Upon reaching a certain age this policy became a government insured endowment policy and matured with a payout of the full value. My question is the payout taxable?

[DianeW777]

Yes, if the payout is more than your cost in the policy.

• According to IRS Publication 554, " Endowment proceeds paid in a lump sum to you at maturity are taxable only if the proceeds are more than the cost of the policy. To determine your cost, subtract from the total premiums (or other consideration) paid for the contract any amount that you previously received under the contract and excluded from your income. Include in your income the part of the lump-sum payment that is more than your cost.  (Page 17 & 18)