federal tax considerations for life insurance and annuities

what is the name for an over funded life insurance policy

a modified endowment contract (MEC)

according to the taxation rules of life insurance policies, how are cash value increases taxed

cash value growth is tax deferred

why are dividends in life insurance policies not taxable

dividends are not considered income for tax purposes; they are a return of unused premium

in a direct rollover, how is the money transferred from one retirement plan to a new one

from trustee to trustee

is the death benefit of a life insurance policy taxed to the beneficiary if its received as a lump

no, lump-sum benefits are received tax free

upon surrender of a life insurance policy, what portion of the cash value will be taxed

only the portion in excess of the premium paid

what is the main purpose of the 7-pay test

to determine if a life insurance policy is a modified endowment contract

when would life insurance policy proceeds be included in the insureds taxable estate

when there is an incident of ownership at the time of death

what is the general taxation rule for death benefits payable to the beneficiary of a life insurance policy

death benefits are generally not subject to income taxes

what portion of a non qualified annuity payment would be taxed

interest earned on principal

if the beneficiary of the life insurance policy receives death benefit payments that consist of principal and interest, which portion, if any will be taxed

interest only