The tax treatment of cash value from a life insurance policy depends on various factors. Generally, the cash value of a life insurance policy grows tax-deferred, meaning that policyholders do not have to pay taxes on the growth of the cash value as long as it remains inside the policy. However, there are certain circumstances where the cash value may be subject to taxation. For example, if the policyholder surrenders the policy and receives a cash surrender value that exceeds the total premiums paid, the excess amount may be subject to taxation. Additionally, if the policyholder takes out a loan against the cash value and the loan is not repaid, it could lead to taxable events. Furthermore, if the policy is classified as a Modified Endowment Contract (MEC), withdrawals and loans may be subject to taxation. It's important to consult with a tax professional or financial advisor to understand the specific tax implications of a particular life insurance policy and any potential tax consequences of accessing the cash value. In summary, while the cash value of a life insurance policy generally grows tax-deferred, there are circumstances where it may be subject to taxation, and it's crucial to consider the individual policy and seek professional advice.