Retirement and Other Insurance Concepts
Under modern tax law (IRC § 7702), why are endowments that endow prior to age 95 no longer classified or taxed as standard life insurance?
Answer and explanation
Answer: D. Contracts that endow before age 95 fail the IRC § 7702 definition of life insurance and are taxed as MECs.Source: Internal Revenue Code § 7702 / NAIC — PDF page 4, Tax Status of Endowments
More retirement and other insurance concepts questions
- A fully insured worker dies. Which survivor is eligible for the Social Security lump-sum death payment?
- A planner totals a family's final expenses, mortgage balance, and income needs, then subtracts savings and Social Security benefits. Which method is being used?
- A wife applies for and owns a policy on her husband's life, naming their child as beneficiary. What is this arrangement called?
- After a life settlement closes, who owns the policy and who is responsible for the premiums?
- Are individual life insurance premium payments tax-deductible for personal income tax purposes?
- Because variable annuity contracts involve investment risk in underlying securities subaccounts, what licenses must an agent hold to sell variable annuities in Texas?
590 Texas questions like this one.
Every answer explained, the ones you miss come back on a spaced schedule, and a plan built from your exam date.