Tax TreatmentQuestion 710 of 716
Premiums paid for personal life insurance are:
a.Deductible once coverage exceeds $50,000
b.Deductible as a medical expense
c.Fully tax-deductible each year
d.Generally NOT tax-deductible
Explanation
Personal life insurance premiums are paid with after-tax dollars and are not deductible, which is part of why the death benefit is received tax-free. There is no coverage-amount or medical-expense exception for personal policies.
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Related questions on this topic
- The main tax disadvantage of a Modified Endowment Contract (MEC) is that:
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- When death proceeds are left with the insurer and paid to the beneficiary in installments, the portion that is taxable is the:
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PrepPass team · Verified against California Life & Health Insurance License Exam · How we review
Reviewed by John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — verify)