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.

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.

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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.

Answer :

Final answer:

Explanation:

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Other Questions

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.