Which of the following BEST keeps a life insurance death benefit out of the insured's federal gross estate?
Explanation
Under IRC §2042 the death proceeds are included in the insured's gross estate whenever the insured holds any incidents of ownership. Transferring ownership to an ILIT (and avoiding the §2035 three-year look-back) is the standard estate-planning technique to remove the policy from the gross estate. Naming a spouse defers but does not avoid estate inclusion; how premiums are paid does not change §2042 inclusion.
Law Reference: IRC §2042This topic, taught in full in the California Life & Health Insurance Producer Exam guide. California Life & Health Insurance Producer Exam — Complete Study Guide (2026) — PDF + EPUB, $19.99 · 14-day refund →
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