All of the Following Statements About the Tax Treatment of Life

question 21

Multiple Choice

All of the following statements about the tax treatment of life insurance purchased by an individual are true EXCEPT

• A) The annual increase in the cash value is currently taxable.
• B) Premium payments are not tax deductible.
• C) Death benefits received in a lump sum are not taxable income.
• D) Policyowner dividends are not considered taxable income.

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