Frank owns an insurance policy on the life of Cynthia, with Leon as the designated beneficiary. Upon Cynthia's death, Frank is treated as making a gift of the insurance proceeds to Leon.

Question

Quizplus · Accepted Answer

This is true because when Frank receives the insurance proceeds, he is considered to have made a gift to Leon, who is the designated beneficiary, and may be subject to gift tax or estate tax implications.

Frank Owns an Insurance Policy on the Life of Cynthia