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Free L&H Practice Test
20 questions sampled from our Life & Health bank. AI explanations shown after each answer.
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Question 1 of 20
0 correct so far
National-LH-I Life Policy Types
hard
A single premium variable life (SPVL) policy's cash value is invested in separate-account subaccounts. The earnings inside the subaccounts:
A
Grow tax-deferred under IRC §7702 and §72 so long as the policy qualifies as life insurance and no MEC distribution is taken
B
Are taxed annually to the policyholder as constructive dividends on the subaccount investment earnings credited for that particular year
C
Are taxed each year only to the issuing insurance company itself at the applicable corporate income tax rate on the realized gains
D
Are reported annually to the policyholder on Form 1099-DIV exactly as if the underlying subaccounts were held in an ordinary brokerage account
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