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In Reply to: Re: Re: Re: Re: Re: Cash Surrender posted by KEN YOUNG on June 19, 2003 at 19:39:35: : : : : Ken, stick to collecting a debit, bashing people, and banning posters from your closed board, BUT LEAVE INSURANCE ADVICE TO THE PROFESSIONALS. A life paid up at age 65 is a whole life (life) policy with the premium period shorten. You would have a whole life policy but would only pay premiums until you age 65. BASIC.
There are two parts to a whole life policy, or 20-pl. The length of the coverage (whole life). And the premium paying period (whole life, 30-pl, 20-pl, life paid up at age 65. Before a par. policy is surrendered, only the interest on the dividend is taxable. Not the divident itself as it represents an return of an over-charge ( 1968 Supreme Court Ruling). However, dividends (a return of and over-charge), reduces your cost basis. The taxable gain on a whole life, 20-pay life (whole), etc. is figure as follows: Gain = cash surrender value - ( premiums-dividends). Premiums less dividens equals your cost basis. Kenny, # 02/25/1937, you are illiterate!!! AND YOU WRITE CE COURSES????? WHAT A JOKE!!! : : : Only whole life policies have non-forfeiture values. Also, a whole life doesn't show how much the dividends are. : : : Call the company! : : : xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx : LILLIE: : FIRST ISSUE. THERE IS ONLY ONE TYPE OF "WHOLE LIFE" POLICY. THAT POLICY IS, "A LIFE PAID UP AT AGE 100". : ALL OF THE OTHER TRADITIONAL CASH VALUE POLICIES REGARDLESS IF THEY ARE PAR (NON-DIVIDEND PAYING)OR NON-PAR ARE WHAT IS KNOWN AS "LIMITED PAYMENT POLICES SUCH AS A "LIFE PAID UP AT AGE 65". : WHEN A OWNER OF ANY TYPE OF PARTICIPATING CASH VALUE POLICY RECEIVES A TAX OBLIGATION NOTICE AT THE END OF THE YEAR FROM AN INSURANCE COMPANY TO REPORT TO THE IRS FOR TAX PURPOSE LIABILITY, IT ONLY STATES WHAT THE EARNED "INTEREST" WAS ON THE DIVIDEND ACCOUNT, NOT THE DIVIDEND ITSELF". : ALTHOUGH STOCK DIVIDENDS ARE REPORTABLE TO THE IRS AS INCOME, THE DIVIDENDS THEMSELVES ARE NOT BUT THE INTEREST ON THE DIVIDEND ACCUMULATION IN THE ACCOUNT IS REPORTABLE TO THE IRS. : AS TO CASH SURRENDER VALUE AND TAX CONSEQUESES AT THE TIME OF CASH SURRENDER, YOU WOULD NOT ADD THE DIVIDEND ACCUMULATION ITSELF TO DETERMINE A TAX LIABILITY, BUT YOU MUST SHOW WHAT THE INTEREST WAS. : NOW CONSIDER THIS ALSO. SINCE THE COMPANY WAS SENDING YOU A STATEMENT AS TO THE INTEREST EARNED ON THE DIVIDEND ACCUMULATION AND YOU WERE ADDING THAT ADDIONAL INTEREST ITEM TO YOUR CURRENT YEAR'S TOTAL INCOME AND PAYING TAXES THAT PARTICULAR YEAR ON THE DIVIDEND, WHAT JAX IS YAMMERING ABOUT IN REALITY IS, WHEN YOU CASH SURRENDER A POLICY YOU MUST ONCE AGAIN PAY TAXES AGAIN ON THAT INTEREST. NOT SO AND ONE DOES NOT PAY TAXES ON INSURANCE DIVIDENDS EITHER WHEN CALCULATING TAXES ON CASH SURRENDERS OF POLICIES. : ASK ANY CPA AND THE CPA WILL TELL YOU THAT JAX WOULD BE BETTER SERVED PLAYING WITH SOMETHING ELSE HE MAY OWN IN LIEU OF PLAYING AN INSURANCE ADVISOR ON THE INTERNET. : I KEEP A FILE ON JAX'S INSURANCE ADVICE HE HAS POSTED ON THE INTERNET FOR FUTURE REFERENCE. HE HAS DEMONSTRATED IN HIS POSTINGS THAT HE IS A GROSS IGNORAMUS. A GROSS INGNORAMUS IS 144 TIMES MORE IGNORANT AND 144 TIMES LESS INFORMED THAN A PLAIN IGNORAMUS. : XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
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