The Annual Increase in the Cash Surrender Value of a Life

question 41

Multiple Choice

The annual increase in the cash surrender value of a life insurance policy:

• A)Is taxed when the individual dies and the heirs collect the insurance proceeds.
• B)Must be included in gross income each year under the original issue discount rules.
• C)Reduces the deduction for life insurance expense.
• D)Is not included in gross income each year because of the substantial restrictions on gaining access to the policy's value.
• E)None of these.

---

Definitions:

Different Countries

Nations or states that are distinct from each other in terms of geography, government, and culture.

Public Law

The branch of law that deals with matters affecting the state or government and its relationship with individuals or other governments.

Private Law

The branch of law that deals with the relationships between individuals or organizations, as opposed to public law which deals with the state.

Prosecution

The legal party responsible for presenting the case in a criminal trial against an individual accused of breaking the law, typically representing the government.