Single premium policies issued before June 21, 1988 were grandfathered, and are generally not subject to the MEC rules.

Secondary guarantee no-lapse policies will remain in force and the death benefits will remain level, even if the cash-value accounts fall to zero as long as the policyowners have paid the specified required premiums in a timely fashion.

Settlement options offered frequently include the following:

A client died in 2023 and $4,000,000 in policy proceeds were payable directly to his grandson. Assume that the client has already fully used both his estate and GST exemption. Assuming that the $4,000,000 was taxed at 40 percent in the client’s federal estate and that the $4,000,000 bore the estate tax, what additional GST tax is payable on the policy proceeds?

A life insurance policy is owned in the insured’s qualified retirement plan. A total of $50,000 was paid in premiums and at the insured’s death it had a cash value of $100,000 and a death benefit of $250,000. Assume that the insured was annually taxed on the reportable economic benefit cost (REB) for the amount of death benefit the insured could designate a beneficiary for and that upon the insured’s death $100,000 is paid to the plan and $150,000 is paid to the insured’s named beneficiary. How much of the death benefit will be subject to income tax?

In a split-dollar arrangement, the economic benefit of a single life policy generally is measured by:

Indexed Universal Life is a hybrid of regular Universal Life and Variable Universal Life.

One of the disadvantages of level-premium whole life insurance is that the premiums may be unaffordable for persons of limited financial resources.

Term insurance has no tax-deferred, automatic savings feature as permanent coverage does.

For which of the following is the use of single premium whole life insurance LEAST appropriate?