An individual owns a life insurance policy with an investment in the contract of $75,000 and a cash value of $125,000. Over time, the individual withdraws $85,000 from the contractHow much of the withdrawal will the individual be required to recognize for income-tax purposes.Select one:O & 50O b. $10,000Oc $50,000O d. $85,000Life insurance companies and insurance regulators may use any of the following terms to describe accelerated death benefit provisions exceptSelect one:O a accelerated death benefitOb. living needs benefitOc wavier of premiumOd living payout optionAdvantages of using life insurance funding in a buy-sell agreement include all of the following exceptSelect oneO the event that creates the need for cash also results in the cash becoming availableOb the cost is relatively lowOc premiums to keep the coverage in effect are deductible as a business expenseOd survivors of the deceased shareholder can be freed from financial dependence on a business that has just lost a key employee

“Since you have asked multiple questions, we will solve the first question for you. If you want any…

An individual owns a life insurance policy with an investment in the contract of $75,000 and a cash value of $125,000. Over time, the individual withdraws $85,000 from the contra How much of the withdrawal will the individual be required to recognize for income-tax purposes. Select one: O 50 Ob $10,000 Oc $50,000 Od. $85,000

An individual owns a life insurance policy with an investment in the contract of $75,000 and a cash value of $125,000. Over time, the individual withdraws $85,000 from the contra How much of the withdrawal will the individual be required to recognize for income-tax purposes. Select one: O 50 Ob $10,000 Oc $50,000 Od. $85,000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

An individual owns a life insurance policy with an investment in the contract of $75,000 and a cash value of $125,000. Over time, the individual withdraws $85,000 from the contract
How much of the withdrawal will the individual be required to recognize for income-tax purposes.
Select one:
O & 50
O b. $10,000
Oc $50,000
O d. $85,000
Life insurance companies and insurance regulators may use any of the following terms to describe accelerated death benefit provisions except
Select one:
O a accelerated death benefit
Ob. living needs benefit
Oc wavier of premium
Od living payout option
Advantages of using life insurance funding in a buy-sell agreement include all of the following except
Select one
O the event that creates the need for cash also results in the cash becoming available
Ob the cost is relatively low
Oc premiums to keep the coverage in effect are deductible as a business expense
Od survivors of the deceased shareholder can be freed from financial dependence on a business that has just lost a key employee

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