When the owner of a universal life insurance policy takes a withdrawal from the cash value, there

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Question:

When the owner of a universal life insurance policy takes a withdrawal from the cash value, there is no tax until the cost basis has been fully recovered:

A.TRUE

B.FALSE

David's employer has established an informally funded deferred-compensation plan and has purchased a 20-payment whole life policy on Davis'd life. To assure the annual premium is excludible from David's taxable income, Paul’s status should be that of:

		A.) The irrevocably designated beneficiary of the policy.
		B.) A creditor of the firm whose claim is secured by the life insurance policy.
		C.) An unsecured creditor of the firm.
		D.) Equitable owner of the policy.

Which of the following statements concerning the human life value of David, the principal breadwinner of his family, is correct?

		It does not consider the family’s share of income.
		It does not consider the self-maintenance costs of Curtis.
		It uses an inflation-adjusted rate to determine present value.
		It disregards Curtis’s average annual earnings over his productive lifetime.