Self-Study
Tax Treatment of Life Insurance Proceeds
Explore the tax treatment of life insurance proceeds, including death benefits and living proceeds.
$58.00 – $78.00
Webcasts are available for viewing Monday – Saturday, 8am – 8pm ET.
Without FlexCast, you must start with enough time to finish. (1 Hr/Credit)
Secure Transaction CPE Credits
2 Credits: Taxes
Course Level
Basic
Format
Self-Study
Course Description
One of the important considerations in many financial transactions is the tax treatment the transaction is given. Often, the impact of taxation is a consideration in the purchase of life insurance every bit as much as it applies to stock purchases, bond purchases and the establishment of qualified retirement plans.
In this course we will look at the tax treatment given proceeds from life insurance policies and will consider the taxation of death benefits, cash value withdrawals, loans and surrenders. In addition, we will examine the differences in tax treatment caused by a life insurance policy’s:
- Failure to meet the statutory definition of life insurance;
- Being deemed a modified endowment contract;
- Transfer of ownership to another person for a valuable consideration;
- Sale in a viatical or life settlementtransaction;
- Ownership by an employer; and
- Use in a qualified retirement plan.
Learning Objectives
Upon successful completion of this course, participants will be able to:
- Calculate the gain to be recognized as a result of various life insurance policy transactions, including –
- withdrawals,
- loans,
- surrenders, and
- payment of death benefits;
- Identify the changes to the customary tax treatment of life insurance policy living proceeds resulting from the policy being deemed a modified endowment contract (MEC);
- Calculate the reportable gain upon receipt of life insurance policy death benefits when the life insurance policy –
-
- has been transferred for a valuable consideration, or
- was included in a qualified plan;
- Recognize the types of life insurance exchanges that are tax-free under IRC §1035;
- Define the terms “terminally-ill” and “chronically-ill” as used in the Health Insurance Portability and Accountability Act; and
- Identify the income tax treatment of accelerated death benefits, viatical settlements and life settlements.
Course Specifics
SS8152539
January 9, 2025
There are no prerequisites.
None
70
Compliance Information
IRS Provider Number: 0MYXB
IRS Course Number: 0MYXB-T-02446-24-S
IRS Federal Tax Law Credits: 2
CTEC Course Number: 2071-CE-0908
CTEC Federal Tax Law Credits: 2
CFP Notice: Not all courses that qualify for CFP® credit are registered by Western CPE. If a course does not have a CFP registration number in the compliance section, the continuing education will need to be individually reported with the CFP Board. For more information on the reporting process, required documentation, processing fee, etc., contact the CFP Board. CFP Professionals must take each course in it’s entirety, the CFP Board DOES NOT accept partial credits for courses.
CTEC Notice: California Tax Education Council DOES NOT allow partial credit, course must be taken in entirety. Western CPE has been approved by the California Tax Education Council to offer continuing education courses that count as credit towards the annual “continuing education” requirement imposed by the State of California for CTEC Registered Tax Preparers. A listing of additional requirements to register as a tax preparer may be obtained by contacting CTEC at P.O. Box 2890, Sacramento, CA, 95812-2890, by phone toll-free at (877) 850-2832, or on the Internet at www.ctec.org.
Meet The Experts
Paul J. Winn CLU ChFC is a writer with more than 30 years experience in the life insurance and securities industry as an agent/registered representative, an agency head, a marketing vice president for a life insurance company and the president of a corporate registered investment adviser. He was a long serving member of the advisory board to the New York State insurance department. He is a published book author and creator of more than 200 taxation, insurance and securities training courses.
QAS Self-Study
