Answered

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Which of the following is true regarding taxation of accelerated benefits paid under a life insurance policy?

A. They are tax deductible.
B. They are considered taxable income.
C. They are received tax-free.
D. They are taxable to the insured's estate.

Sagot :

GinnyAnsweridn

Final answer:

Accelerated benefits under a life insurance policy are received tax-free to the insured.


Explanation:

Accelerated benefits paid under a life insurance policy are received tax free (Option C). These benefits are typically not taxable to the policyholder because they are considered an advance on the death benefit due to the insured's terminal illness or other qualifying medical conditions.


Learn more about Taxation of accelerated benefits under a life insurance policy here:

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