Federal Tax Considerations for Life Insurance and Annuities

Which concept is associated with "exclusion ratio"? AHow exclusion riders affect an insurance premium BPolicy provisions CAnnuity payments DDividend distribution

Annuity payments

What is the penalty for IRA distributions that are below the required minimum for the year? A10% B25% C50% D60%

50%

An IRA uses immediate annuities to pay out benefits; the IRA owner is nearly 75 years old when he decides to collect distributions. What kind of penalty would the IRA owner pay? A50% tax on the amount not distributed as required BNo penalties, since the owner is older than 59 ½ C10% for early withdrawal D15% for early withdrawal

50% tax on the amount not distributed as required

Which of the following is NOT true regarding policy loans? AAn insurer can charge interest on outstanding policy loans. BA policy loan may be repaid after the policy is surrendered. CMoney borrowed from the cash value is taxable. DPolicy loans can be repaid at death.

Money borrowed from the cash value is taxable.

Death benefits payable to a beneficiary under a life insurance policy are generally AExempt from income taxation if under $10,000. BExempt from income taxation if over $10,000. CNot subject to income taxation by the Federal Government. DSubject to income taxation by the Federal Government.

Not subject to income taxation by the Federal Government.

All of the following benefits are available under Social Security EXCEPT AWelfare benefits. BOld-age and retirement benefits. CDisability benefits. DDeath benefits.

Welfare benefits.

Which of the following describes the taxation of an annuity when money is withdrawn during the accumulation phase? AWithdrawn amounts are taxed on a first in, last out basis. BTaxes are deferred on withdrawn amounts, but a flat penalty is charged. CTaxes are deferred on withdrawn amounts. DWithdrawn amounts are taxed on a last in, first out basis.

Withdrawn amounts are taxed on a last in, first out basis.