Life insurance death benefits that are paid out to a beneficiary in a lump sum are typically not included as income to the recipient of such proceeds if the death benefit payment was made under a(n) __________.
Explanation
Answer: D - Life insurance death benefits that are paid out to a beneficiary in a lump sum are typically not included as income to the recipient of such proceeds if the death benefit payment was made under an endowment contract, worker's compensation insurance contract, and/or an employer's group life insurance plan. The proceeds will also not be taxable if paid out under an accident and/or health insurance contract. If, however, the beneficiary receives the death benefits in installments and interest is gained on the funds, the amount of proceeds received by the beneficiary that is in excess of the original death benefit amount will be subject to taxation.
