If the insured outlived the life insurance policy, the proceeds shall be taxable to the beneficiary less the total amount of premiums paid to the insurer
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- life insurance proceeds paid to a beneficiary because of the insured's death is taxable. true or falseThe following are excluded from gross income, except: a. Proceeds of life insurance policy received by the beneficiary upon death of insured b. Compensation for injuries, sickness, or death c. Amount received by the insured in excess of the premiums paid d. None of the aboveIdentify which is taxable? A. Proceeds of life insurance received by heirs B. Excess amount received over premiums paid by insured upon surrender of policy C. Compensation for personal injuries of an employee D. Indemnification for moral damages
- Define each of the given and describe the different EXCLUSIONS FROM GROSS INCOME: Proceeds of life insurance policy Amount received by the insured as a return of premium Gift, bequest, or descent Compensation for injuries or sickness Income exempt under treaty Retirement benefits, pensions, gratuities, etc.Statement 1: If an insured outlived his policy and received from the insurance company an amount equivalent to the total premiums paid, such amount is taxable. Statement 2: If the insured dies and the beneficiary receives payment from the insurance company, the amount received in excess of the total premiums paid shall be taxable. A. Both statements are true B. Both statements are false C. Only statement 1 is true D. Only statement 2 is trueWhen a life insurance policy lapses, it: a. benefits the insured b. benefits neither the insurer nor the insured. c. benefits the insurer d. benefits both the insurer and the insured
- A. Which of the following is TRUE regarding a whole life insurance policy that pays a dividend? When the dividend is paid, it is taxed to the policyholder as an ordinary dividend The dividend is automatically credited against future premiums The dividend is paid directly to the beneficiary on the policy When the dividend is paid, it can be used to purchase additional coverage B. Each employee covered under a group life policy MUST be given: An individual certificate of insurance A certificate of insurance for each family member covered An insurance identification card for each family member covered A copy of the group master contract C. Universal life products are flexible premium policies that are: Interest sensitive Guaranteed issue Non-renewable Term only D. Which of the following statements is CORRECT about life insurance proceeds paid to a named beneficiary? They are exempt from claims by the insurance creditors They are subject to excise taxes…Life insurance premiums shall be reported as a deductible expense for financial reporting purposes if the company paying it is the beneficiary. Required: True or FalseWhich of the following life insurance proceeds is not included in the gross estate of the deceased? A. Insurance proceeds with SSS.B. Insurance proceeds where the beneficiary is a third person revocably appointed.C. Insurance proceeds under a group insurance taken out by the employee for himself as beneficiary.D. Insurance proceeds covering the life of the insured decedent where the estate of the deceased, hisexecutor or administrator is the beneficiary whether or not the insured retained the power of revocation.
- The proceeds received under a life insurance endowment contract is not considered part of gross income if the price for the endowment policy was not fully paid where payment is made as a result of the death of the insured if it is so stated in the life insurance endowment policy where the beneficiary was not the one who took out the endowment contractUnder a deferred annuity owned by a nongrantor trust, how does the annuity's death benefit operate?(Search Chapter 6) a. The death of the trust grantor triggers payout of the contract's death benefit and termination of the contract. b. The death of the primary annuitant triggers payout of the contract's death benefit and termination of the contract. c. The death of the trust beneficiary triggers payout of the contract's death benefit and termination of the contract. d. Annuities owned by a trust can continue in perpetuity; since trusts do not die, there is no death benefit payable from an annuity owned by a trust.Which of the following is true about the self-employed health insurance deduction? The deduction can be claimed when a subsidized employer health insurance plan is also available. The deduction can be claimed if the taxpayer has an overall business loss from self-employment. Long-term care premiums may not be deducted within specified dollar limitations based on age. The self-employed health insurance deduction is a for AGI deduction. Dental insurance is not included as deductible self-employed health insurance.