Economic Evaluation Group, Inc.
A Concierge Employee Benefits Consulting & Brokerage Firm
When beneficiaries receive the death proceeds of a life insurance policy, such proceeds are generally exempt from federal income tax, with a few exceptions. One important exception occurs when the policy has been transferred for a valuable consideration during the insured's life.
No transfer for value occurs when a policy owner makes a gift by transferring a policy without receiving valuable consideration. The death proceeds still qualify for a full income tax exemption.
When a policy has been sold or otherwise transferred for a valuable consideration, the income tax exemption is limited to the purchase price plus any subsequent premiums paid by the transferee. The portion of the death proceeds includible in the beneficiary's gross income is equal to the gain in the policy-the death proceeds payable minus the purchase price and subsequent premiums paid by the transferee.
Certain categories of transferees can purchase a life insurance policy without triggering a transfer for value. These so-called "exempt transferees" are:
If a non-exempt transferee purchases an existing life insurance policy, the death proceeds are partially subject to federal income tax. Some common non-exempt transferees include:
* Purchase by the insured's spouse from the insured is an exempt transfer (IRS §1041). The spouse's purchase from any other party (e.g., the insured's employer or business partner) is not an exempt transfer.
** Purchase by the insured's revocable living trust, when the insured is treated as the owner of the trust for tax purposes, is treated as a transfer to the insured, who is an exempt transferee.
Economic Evaluation Group, Inc.
© 2018 Economic Evaluation Group, Inc.
From important information can be found at: www.ceteraadvisornetworks.com/clients/important-disclosures
Business Continuity Plan information: https://www.ceteraadvisornetworks.com/businesscontinuity
Securities offered through Registered Representatives of Cetera Advisor Networks LLC, a securities broker/dealer (member FINRA/SIPC ). Economic Evaluations Group, Inc. is a separate entity from Cetera Advisor Networks LLC Registered Representative of Cetera Advisor Networks LLC are registered for the sale of securities products in NJ and NY. CA license # 0D08970
Circular 230 Notice: Pursuant to IRS Circular 230, Cetera Advisor Networks LLC is providing you with the following notification: The information contained in this website is not intended to (and cannot) be used by anyone to avoid IRS penalties. This website supports the promotion and marketing of life insurance, annuities,
Economic Evaluation Group, Inc. Specializes in Group Health Insurance (Group Medical Insurance). EE Group is located in Melville, Long Island, New York and service all over the United States and Canada.
Economic Evaluation Group is currently Licensed in Arizona (AZ), Arkansas (AK) California (CA), Connecticut (CT), District of Columbia, (DC), Florida (FL), Georgia (GA), Illinois (IL), Kentucky (KY), Maryland (MD), Massachusetts (MA), Maine (ME), Michigan (MI), Minnesota (MN), Missouri (MO), New Hampshire (NH), Nebraska (NE), New Jersey (NJ) , New York (NY) , North Carolina (NC), Oklahoma (OK), Pennsylvania (PA), Texas (TX), Vermont (VT), Virginia (VA). NOTE: If your state is not listed we can easily add the state license.