Chapter 7: Federal Tax Considerations For life Insurance And Annuities

If an immediate annuity is purchased with the face amount at death or with the cash value at surrender, this would be considered a

A settlement option is exercised when an immediate annuity is purchased with the face amount at death or with the cash value at surrender.

When must an IRA be completely distributed when a beneficiary is not named?

If the owner dies before distributions have begun, the entire interest must be distributed in full on or before December 31 of the calendar year that contains the fifth anniversary of the owner's death, unless the owner named a beneficiary.

Which of the following is INCORRECT regarding whole life insurance?

Policy loans are not tax deductible.

In a direct rollover, how is the money transferred from one plan to the new one?

In a direct rollover, the distribution is made directly from the trustee of the first plan to the trustee or administrator/custodian of the new IRA plan.In a direct rollover, how is the money transferred from one plan to the new one?

Who can make a fully deductible contribution to a traditional IRA?

Individuals who are not covered by an employer-sponsored plan may deduct the full amount of their IRA contributions regardless of their income level.