Question

Advantage(s) of permanent life insurance may include which of the following:

a. Death benefit proceeds generally available to designated beneficiary free of income tax.
b. Cash value accumulates on tax-deferred basis.
c. Cash value maintained for a variable policy in a separate account is not subject to the claims of general creditors.
d. All of the above.

Answer 1

The advantages of permanent life insurance include death benefit proceeds that are tax-free for the beneficiary, tax-deferred cash value accumulation, and protection from creditors for cash value in variable policies.

Step-by-step explanation:

The advantages of permanent life insurance may include the following:

• Death benefit proceeds are generally available to the designated beneficiary free of income tax.
• The cash value accumulates on a tax-deferred basis, allowing it to potentially grow more efficiently over time.
• For variable policies, the cash value maintained in a separate account is often not subject to the claims of general creditors, providing a degree of financial security.

Therefore, the correct answer is: d. All of the above.