Question 4020 of 287 · Texas Life, Accident and Health Agent Exam

Investment growth in the cash value of a life insurance policy is generally

Exactly one answer is correct.

Ataxed each year as ordinary income to the owner
Btax deferred while the policy remains in force
Ctaxed to the insurer and passed to the owner
Dtax free even if the policy is surrendered for a gain

Show solution

Correct answer to question 4020

B: tax deferred while the policy remains in force

Explanation

Cash value accumulates without current taxation. If the policy is surrendered, any gain over the premiums paid is taxable.