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.

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Definitions:

Psychosocial Development

A theory proposed by Erik Erikson that describes how individuals evolve through and navigate various social and emotional stages throughout their lives.

Sense Of Industry

A stage in psychological development where an individual develops a sense of competence and achievement, usually occurring during childhood.

Praise And Support

Acts of expressing approval or admiration combined with assistance and encouragement.

Psychosocial Crises

Conflicts between personal impulses and the social world, which Erik Erikson proposed occur throughout one's life in eight distinct stages.