Question

In: Accounting

Regarding Allison's life insurance policy, life insurance proceeds are exculded from tax.

Regarding Allison's life insurance policy, life insurance proceeds are exculded from tax. Therefore,
?the $1,200,000 face value of the policy is excluded as it is received. However, the earnings on the
?policy during the time it is held by the insurace company are not exculdable. The total interest earned
?is [ A    ]. As each payment on the policy is recieved, you will exclude[ B ] and include[ C ].


Solutions

Expert Solution

A) The Total Interest That is bonus in case of Insurance policy is

Face value - Total Amount received during the period( installment * time period)

B) As each payment on the policy is received, excludes all the deductions and excemptions .

C) It includes all the cost incurred regatding installment received i.e. service taxes.

ekkarill92 answered 2 years ago
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