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 true

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 true

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter27: The Federal Gift And Estate Taxes

Section: Chapter Questions

Problem 16DQ

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TRUE OR FALSE 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
The 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 above
Identify 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
33) When a policy matures on the death of the insured , it is called as:
life insurance proceeds paid to a beneficiary because of the insured's death is taxable. true or false
(a) As a general rule, does the death of either the creditor or the debtor extinguish obligations that are transmissible to the heirs? (b) Are monetary obligations under a contract of surety intransmissible by their nature, by stipulation, or by provision of law? (c) Will the death of the principal debtor convert, decrease or nullify the substantive right of the solidary creditor? (10%)
When 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
10. ________principle means that the insured is not entitled to make a profit on his loss: a. subrogation b causa proxima c. indemnity d. uberrima fides 11. The purpose of _______ are to hold the negligent person responsible for the loss and prevent the insured from collecting twice for the same loss. a. subrogation b causa proxima c. indemnity d. uberrima fides 12. _________principle in insurance mention the cause of loss must be direct and an insured one in order to claim for compensation. a. subrogation b causa proxima c. indemnity d. uberrima fides. 13. _________ principle in insurance mention the assured must have insurable interest in the life or property insured? a. subrogation b causa proxima c. indemnity d. insurable interest
Life insurance premiums paid by the company on its officers and employees are considered permanent differences only when the company is the beneficiary. a. TRUE b. FALSE
True or False? 1. An insurance contract is derecognized when it is extinguished and when it is modified where the modification meets any of the conditions for derecognition. 2. The occurence of the event must be certain at the inception of the insurance contract.
Under 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.
Policyholder dividends from a whole life insurance policy are generally tax exempt. In which of the following situations would the policyholder dividend be tax exempt? A) The dividend is from a MEC and is received in cash. B) The policyholder dividends exceed premiums paid. C) The policyholder receives dividends that are less than the investment in the contract. D) The policyholder receives dividends greater than the investment in the contract.