Identify which of the following statements is false.
A)The interpolated terminal reserve is similar to a life insurance policy's cash surrender value.
B)A gift occurs when the owner of an insurance policy irrevocably assigns all ownership rights in the policy to another.
C)The payment of premiums on an insurance policy that is owned by another does not constitute a gift.
D)The value of the gift of a life insurance policy is the amount it would cost to purchase a comparable policy on the date of the gift.

Question

Quizplus · Accepted Answer

The payment of premiums on an insurance policy owned by another can constitute a gift, depending on the circumstances. If the person paying the premiums does not have any legal obligation to do so, and the payment benefits the policy owner, it can be considered a gift for tax purposes.

Identify Which of the Following Statements Is False