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Premiums are not tax deductible, as they are paid with after tax dollars and considered a personal expense. Unless:
- 1) They are paid by employer for group term life and employer is not beneficiary.
- 2) A Company pays the premiums as a bonus/incentive.
- 3) Paid by a @on-Profit Organization.
- 4) Paid as part of an Alimony settlement.
- 5) Purchased to cover a debt/creditor.
Cash Value Accumulation:
Life policy interest is not taxable and cash value given at death is not taxed, but early surrenders are taxed. However, if company selects an “accumulated at interest” dividend option, the insured is taxed only on the interest gained on the dividend payment.
Can take a loan (borrow) tax-free!
Fewer than 2% pay Federal Estate Taxes, due to the value of an estate needing to be over $2 million currently. Must be paid within 9 months of death.
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