Are you looking for the correct answer to the question “Ralph owns a $50,000 nonparticipating whole life policy. Its cash value has accumulated to $15,000, and he has paid a total of $9,500 in premiums. If he surrenders the policy for its cash value, how will it be taxed?”? If that’s the case, you don’t have to worry anymore. Azanswer team is here with the right answer to your question. Please check below to know the answer.
Ralph owns a $50,000 nonparticipating whole life policy. Its cash value has accumulated to $15,000, and he has paid a total of $9,500 in premiums. If he surrenders the policy for its cash value, how will it be taxed?
A) Ralph will receive $9,500 tax-free; the $5,500 balance is taxable as income.
B) Ralph will receive the $15,000 as taxable income.
C) Ralph will receive the $15,000 tax-free.
D) Ralph will receive $5,500 tax-free; the $9,500 balance is taxable as income.
Answer: Ralph will receive $9,500 tax-free; the $5,500 balance is taxable as income.
The above question Ralph owns a $50,000 nonparticipating whole life policy. Its cash value has accumulated to $15,000, and he has paid a total of $9,500 in premiums. If he surrenders the policy for its cash value, how will it be taxed?, Was part of Insurance MCQs & Answers. I hope you got the correct answer to your question. Have a great time ahead.
