#1
Which type of insurance policy allows the policyholder to accumulate cash value over time?
Term life insurance
Whole life insurance
Accidental death insurance
Health insurance
#2
What is the tax treatment of premiums paid for a health insurance policy?
Deductible
Non-deductible
Partially deductible
Tax credit
#3
In the context of insurance, what does 'cash surrender value' refer to?
The amount paid by the insurance company in case of policy cancellation
The amount the policyholder receives upon the death of the insured
The total premiums paid minus any fees or expenses
The accumulated savings within a permanent life insurance policy
#4
Which of the following insurance benefits is typically taxable as income?
Death benefits
Disability income benefits
Health insurance reimbursements
Long-term care insurance benefits
#5
What is the tax treatment of dividends received from a participating life insurance policy?
Taxable as ordinary income
Tax-free
Taxed at a reduced rate
Taxable only if exceeding a certain threshold
#6
Which of the following insurance policies allows for tax-deductible contributions?
Variable universal life insurance
Term life insurance
Annuities
Health insurance
#7
What tax treatment applies to the death benefit received from a life insurance policy?
Fully taxable as ordinary income
Partially taxable, depending on the policy's cash value
Tax-free in most cases
Taxable if the insured's estate exceeds a certain threshold
#8
What is the tax treatment of the death benefit from a key person insurance policy?
Fully taxable as ordinary income
Tax-free if used for funeral expenses
Tax-free if the company is the beneficiary
Subject to capital gains tax
#9
Under what circumstances can the interest earned on a life insurance policy be tax-free?
If the policyholder is under a certain age
If the policyholder has held the policy for a minimum duration
If the policyholder has multiple insurance policies
If the policyholder is a high-income earner
#10
Which type of insurance policy typically provides tax-free withdrawals for qualified education expenses?
Term life insurance
Whole life insurance
Annuities
529 plans
#11
What is the tax treatment of employer-provided life insurance coverage exceeding $50,000?
Fully taxable as income
Partially taxable
Tax-free
Depends on the insurance company
#12
What tax advantage does a 1035 exchange provide in relation to life insurance policies?
Tax deduction for premiums paid
Tax-free exchange of one policy for another
Tax-free withdrawals
Tax credits for policyholders
#13
Which of the following statements about the tax treatment of premiums for long-term care insurance is true?
Premiums are always deductible regardless of age or health condition.
Premiums are never deductible as a medical expense.
Premiums are deductible up to certain limits based on age.
Premiums are deductible only for individuals with high income.
#14
Which of the following is a characteristic of a Modified Endowment Contract (MEC)?
Tax-free withdrawals at any time
Tax-deferred growth
Subject to a 10% penalty on withdrawals before age 59½
Tax-deductible premiums
#15
Which of the following insurance policies typically offers tax-deferred growth and tax-free withdrawals for qualified medical expenses?
Term life insurance
Whole life insurance
Health Savings Account (HSA)
Long-term care insurance