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Accessing cash value from corporate-owned life insurance
CE Credit Questions
You must obtain a passing grade of 60% to be eligible for CE credits.
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1. There are three ways you can access the cash value from a life insurance policy?
True
False
2. When accessing cash value by a corporate policyowner, a common issue is how to distribute the cash proceeds to the shareholder and the related tax consequences?
True
False
3. Policy loans are popular among policyowners as the withdrawal is always non-taxable?
True
False
4. One of the advantages of accessing cash value through cash withdrawal / partial surrender is that the future growth of the policy cash value and death benefit is unaffected by the withdrawal?
True
False
5. Collateral loans generally have favourable tax treatment in comparison to policy loans and/or cash withdrawal / partial surrender?
True
False
6. Obtaining and renewing of a collateral loan is guaranteed by the third-party lending institution?
True
False
7. Interest rates on collateral loans are typically higher than policy loan interest rates?
True
False
8. Policy loans and collateral loans both require financial underwriting and as such are not guaranteed?
True
False
9. Policy loan advances increase the policy’s adjusted cost basis on a dollar-for-dollar basis?
True
False
10. For corporate policyowners, the capital dividend account (“CDA”) credit calculation is unaffected by a policy loan resulting in the potential for “excess CDA”?
True
False
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