Death benefit is not included in the insured gross estate

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Reference no: EM131930300

1. $100,000 death benefit is paid to the beneficiary, age 50, under pure life income (i.e. life annuity) option and the payment is $4000 per year. Based on IRS mortality table, the life expectance of 50 old is 35 years, then how much of each the payment is taxable income of the beneficiary?

A- $4000

B- $500

C- $ 2857

V- $1143

2. Which of the following living proceeds from life and health insurance is free from income tax? (1) Accelerated death benefits; (2) surrender value ; (3) Benefits from health insurance;(4) Benefits from LTC insurance that lower than the per diem limitation.

A- (3) AND (4) ONLY

B- (1) and (3) only

C- (1), (3), and (4)

D- (1), (2), (3), and (4)

3. Rebecca’s $100,000 ordinary life policy, issued 20 years ago, carries an annual premium of $ 1,300 and has a cash surrender value of $30,000. The sum of all dividends over the 20 year period is $10,000. If she surrendered the policy, how much the amount subject to ordinary income tax?

A- $23,000

B- $26,000

C- $16,000

D- $14,000

4. Under which of the following circumstance the death benefit is not included in the insured’s gross estate?

A- Mom purchased life insurance on dad, and named the kids as beneficiaries

B- Mom purchased life insurance on herself and named the kids as beneficiaries

C- Mom purchased life insurance on herself and didn’t name anyone as beneficiaries

D- If all of the above should be included in the insured’s gross estate, please choose D.

5. Martin purchased a joint and last survivor annuity 10 years ago and this year. If Martin contributed the full $50,000 premium to purchase this policy and the value of the survivor ( any #.. )his death was determined to be $40,000, how much will included in his estate?

A- $40,000

B- $50,000

C- 10,000

D- None of the above is correct.

Reference no: EM131930300

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