Primerica (Taxation of Life Insurance and annuities-Premiums and Proceeds)

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What is the penalty for IRA distributions that are below the required minimum for the year?

50%

If an annuitant dies during the accumulation period, what benefit (if any) will be included in the annuitant's estate?

Accumulated cash value

Which of the following is true regarding taxation of dividends in participating policies?

Dividends are not taxable.

If an insured surrenders his life insurance policy, which statement is true regarding the cash value of the policy?

It is only taxable if the cash value exceeds the amount paid for premiums.

Which of the following statements is TRUE concerning whole life insurance?

Lump-sum death benefits are not taxable. B

In which of the following instances would the premium be tax deductible?

Premiums paid by an employer on a $30,000 group term life insurance plan for employees

What part of the Internal Revenue Code allows an owner of a life insurance policy or annuity to exchange or replace their current contract with another contract without creating adverse tax consequences? ASection 457 Deferred Compensation Plan

Section 1035 Policy Exchange

The premiums paid by the employer in a business life insurance policy are

Tax deductible by the employer.

Which of the following describes the tax advantage of a qualified retirement plan?

The earnings in the plan accumulate tax deferred.

What method is used to determine the taxable portion of each annuity payment?

The exclusion ratio

Which of the following statements regarding deferred compensation funds is INCORRECT?

They are usually qualified plans.

Which of the following describes the taxation of an annuity when money is withdrawn during the accumulation phase?

Withdrawn amounts are taxed on a last in, first out basis.


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