If the insured outlived the life insurance policy, the proceeds shall be taxable to the beneficiary less the total amount of premiums paid to the insurer
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- life insurance proceeds paid to a beneficiary because of the insured's death is taxable. true or falseThe following are excluded from gross income, except: a. Proceeds of life insurance policy received by the beneficiary upon death of insured b. Compensation for injuries, sickness, or death c. Amount received by the insured in excess of the premiums paid d. None of the aboveStatement 1: If an insured outlived his policy and received from the insurance company an amount equivalent to the total premiums paid, such amount is taxable. Statement 2: If the insured dies and the beneficiary receives payment from the insurance company, the amount received in excess of the total premiums paid shall be taxable. A. Both statements are true B. Both statements are false C. Only statement 1 is true D. Only statement 2 is true
- What does the insurer agree to pay for in addition to covering losses in an insurance policy? Services such as investigating claims and defending the insured The entire policy limit Premium costs for the policy period Only losses below the deductibleWhich of the following statements is not correct? Proceeds of life insurance policies paid to beneficiaries upon the death of the insured are excluded from gross income regardless of whether the proceeds are received as a single sum or in installments. In case of transfer for a valuable consideration by assignment or otherwise of a life insurance, endowment or annuity contract or any interest therein, only the actual value of such consideration and the amount of the premium and the sums subsequently paid by the transferee are exempt from income tax. O Marriage fees, baptismal offerings, sums paid for saying masses for the dead and other contributions received by a clergyman. evangelist or religious worker for services rendered are taxable income. O Monetization of leave credits of employees who were unable to go on leave due to exigencies of the service constitutes taxable income.Identify which is taxable? A. Proceeds of life insurance received by heirs B. Excess amount received over premiums paid by insured upon surrender of policy C. Compensation for personal injuries of an employee D. Indemnification for moral damages
- Define each of the given and describe the different EXCLUSIONS FROM GROSS INCOME: Proceeds of life insurance policy Amount received by the insured as a return of premium Gift, bequest, or descent Compensation for injuries or sickness Income exempt under treaty Retirement benefits, pensions, gratuities, etc.True or False 1. The proceeds of life insurance received by the heirs of the insured uponhis death is excluded in gross income.2. The amount received in excess of the premium paid in an insurance contractconstitutes an item of gross income.3. Donated income is included in the gross income of the donee.4. Compensation for injuries and sickness constitutes profit; hence, aninclusion gross income.5. It is sufficient that the employee rendered more than 10 years of servicefor his retirement benefit to be exempt.When a life insurance policy lapses, it: a. benefits the insured b. benefits neither the insurer nor the insured. c. benefits the insurer d. benefits both the insurer and the insured
- Amounts receivable by the estate of the deceased, his executor or administrator as an insurance under policy taken by the decedent upon his own life is: Excluded from the gross estate; Part of the gross estate whether the beneficiary is revocable or irrevocable Part of the gross estate if the beneficiary is revocable Part of the gross estate if the beneficiary is irrevocableLife insurance premiums shall be reported as a deductible expense for financial reporting purposes if the company paying it is the beneficiary. Required: True or FalseIf a term life insurance policy isconvertible, it can be: Question38 options: a) revised as neededby the insurer. b) transferred tothe life of another person in thefuture. c) changed to health ordisability protection. d)exchanged for cash in the future.e) changed to a comparablewhole life policy in the future.