#1
2. In the context of insurance policies, what is a 'maturity benefit'?
Benefit paid if the insured survives the policy term
ExplanationMaturity benefit is the amount paid to the policyholder if they outlive the policy term.
#2
9. In the context of insurance, what does 'underwriting' refer to?
The assessment of risk and determination of premiums
ExplanationUnderwriting in insurance involves evaluating risk and setting premiums based on that assessment.
#3
14. How are dividends received from a life insurance policy taxed?
Exempt from taxation
ExplanationDividends received from a life insurance policy are typically not subject to taxation.
#4
17. What is 'term life insurance' characterized by?
Coverage for a specific period
ExplanationTerm life insurance provides coverage for a specified period, typically without cash value buildup.
#5
1. What is the tax treatment of premium payments in a life insurance policy?
Premium payments are not tax-deductible
ExplanationPremium payments for life insurance are not deductible from taxable income.
#6
4. What is the purpose of a 'rider' in an insurance policy?
To modify or add coverage to the base policy
ExplanationA rider in an insurance policy is an amendment that modifies or adds coverage to the original policy.
#7
6. What is the 'cash surrender value' in a life insurance policy?
The accumulated savings within the policy that can be withdrawn
ExplanationCash surrender value refers to the accumulated savings within a life insurance policy that can be withdrawn by the policyholder.
#8
8. What is the 'elimination period' in a disability insurance policy?
The waiting period before coverage begins
ExplanationThe elimination period in a disability insurance policy is the duration the insured must wait before coverage begins.
#9
11. What is the tax treatment of premiums paid for a long-term care insurance policy?
Fully tax-deductible
ExplanationPremiums paid for long-term care insurance policies are fully deductible from taxable income.
#10
3. How are death benefits from life insurance policies treated for tax purposes?
Fully tax-exempt
ExplanationDeath benefits from life insurance policies are completely exempt from taxation.
#11
5. Under what circumstances are health insurance premiums tax-deductible?
Tax-deductible if medical expenses exceed a certain percentage of income
ExplanationHealth insurance premiums become tax-deductible when medical expenses surpass a specific percentage of income.
#12
7. How are proceeds from a key person insurance policy taxed for a business?
Taxed as regular business income
ExplanationProceeds from a key person insurance policy are taxed as ordinary business income.
#13
10. What is a '1035 Exchange' in the realm of life insurance?
A tax-free exchange of one life insurance policy for another
ExplanationA 1035 Exchange allows for the tax-free exchange of one life insurance policy for another, under certain conditions.
#14
12. In insurance, what does 'subrogation' mean?
The right of the insurer to pursue a third party for damages
ExplanationSubrogation in insurance refers to the insurer's right to seek reimbursement from a third party for damages paid to the insured.