Updated October 19, 2026. Quick answer: Form 1099-SB is the statement a life insurance company sends a seller when a policy is transferred in a reportable policy sale. Box 1 shows the issuer’s estimate of your investment in the contract and box 2 shows the amount you would have received upon surrender. This page covers what the form says and does not work out any tax result.
What Form 1099-SB reports
The form is titled Seller’s Investment in Life Insurance Contract, and Copy B is for the seller. The seller’s instructions say who sends it and when: “The issuer of an insurance policy must furnish this form to you upon receiving notice of a transfer of your life insurance contract in a reportable policy sale under section 6050Y or the transfer of your life insurance contract to a foreign person reportable under section 6050Y.”
The issuer is the insurance company, and the seller is the person who held the policy. The form is a companion to the statement the buyer sends, which is covered in Form 1099-LS boxes 1 and 2. Where that form is about what you were paid, this one is about the policy’s own numbers.
The two boxes
Both boxes are described in a single sentence each. “Shows the issuer’s estimate of your investment in the contract (as defined in section 72(e)(6)).” That is box 1. For box 2: “Shows the amount that you would have received upon surrender of the life insurance contract transferred.”
Two points are worth holding on to. Box 1 is the issuer’s estimate, so treat it as the issuer’s figure rather than a final one. Box 2 describes a hypothetical, the amount you would have received if the contract had been surrendered, and it is not a payment you received. To compare selling a policy with surrendering it, see life settlement versus surrender.
Every item on the form
The table sets out the items on the seller’s copy, each in the form’s own words.
| Item on the form | What the form says |
|---|---|
| Policy number | “Shows the policy number the life insurance company assigned to the life insurance contract transferred.” |
| Box 1 | “Shows the issuer’s estimate of your investment in the contract (as defined in section 72(e)(6)).” |
| Box 2 | “Shows the amount that you would have received upon surrender of the life insurance contract transferred.” |
| Issuer’s contact information | “The contact information provided will give you direct access to a person who can answer questions about this form.” |
The policy number lets you match the statement to your contract. The contact box matters if something looks wrong, and the form adds that “If blank, the contact information is the same as the ISSUER.” For how basis figures are used when a policy is surrendered, see cost basis on a life insurance surrender.
Your taxpayer identification number on the form
The seller’s copy may show only part of your number. “For your protection, this form may show only the last four digits of your TIN”. The instructions continue: “However, the issuer has reported your complete TIN to the IRS.”
How the two forms fit together
A sale can produce two statements about the same policy. The buyer’s Form 1099-LS reports the payment, and the issuer’s Form 1099-SB reports the policy’s numbers. The statement the buyer sends to the insurance company states the link: “You must file a Form 1099-SB with respect to the reportable policy sale under section 6050Y.” The definition of a reportable policy sale is in Form 1099-LS boxes 1 and 2. Read both forms side by side and compare the policy number on each. For the broader question of what to do with a policy you no longer need, see the life insurance decisions guide.
Edition and box numbers
This page reads Form 1099-SB (Rev. April 2025), the current file irs.gov served on 2026-10-19. The cross-reference to Form 1099-LS comes from Form 1099-LS (Rev. April 2025). Check the year and edition printed on the form you received before relying on any box description here, because box numbers can change between editions. Only one edition is used for this page.
Common mistakes
- Reading box 1 as a final figure. The form calls it “the issuer’s estimate of your investment in the contract”.
- Treating box 2 as money you received. The form describes “the amount that you would have received upon surrender”.
- Expecting the form to arrive for every policy event. The instructions tie it to “a transfer of your life insurance contract in a reportable policy sale under section 6050Y”.
Related: life settlement versus surrender, cost basis on a life insurance surrender, and the life insurance decisions guide.
Sources
- Form 1099-SB, Seller’s Investment in Life Insurance Contract (Rev. April 2025), with Instructions for Seller: https://www.irs.gov/pub/irs-pdf/f1099sb.pdf
- Form 1099-LS, Reportable Life Insurance Sale (Rev. April 2025), with Instructions for Payment Recipient: https://www.irs.gov/pub/irs-pdf/f1099ls.pdf
- IRS: About Form 1099-LS: https://www.irs.gov/forms-pubs/about-form-1099-ls
- IRS: About Form 1099-SB: https://www.irs.gov/forms-pubs/about-form-1099-sb
Read from the IRS documents linked above on October 19, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.