Life insurance policies are almost identical to having a saving's account as the company invests the money you pay as a premium each month. By surrendering your policy, you will receive the current face value which includes both the premium payments along with any investment gains. Since the amount paid each month is considered after-tax money, the IRS will not double-tax that contribution. Any investment gains have yet to be taxed so you will be required to report that amount as taxable income. In order to come up with that amount, subtract the total premium payments from your current cash value. In your case, I would add up the amount of months you have been paying which is currently at either 27 for March 11th, 2017 through April 11th, 2017 or 28 depending on if you have paid for the month of April 11th, 2017 until May 11th, 2017. Then, multiply the number of months paid by the amount paid each month which is $11.64. If premiums have been paid for 27 months, the amount contributed would be at $314.28 while it would be $325.92 if it has been 28 months.
By subtracting the correct amount contributed towards the policy from the current face value of $46,808.00, your investment gain would be either $46,493.72 or $46,482.08 which in fact would be taxable. In this case, it is best to withhold taxes on your investment gain.