1. Life insurance death benefits paid to a named beneficiary are generally:

Received income-tax-free

Death benefits paid in a lump sum to a beneficiary are generally received free of federal income tax.

2. The growth of cash value inside a permanent life policy is generally:

Tax-deferred while it remains in the policy

Cash value generally grows tax-deferred; taxation may occur on amounts withdrawn above the cost basis.

3. A life policy classified as a Modified Endowment Contract (MEC) loses favorable tax treatment on:

Lifetime distributions such as loans and withdrawals

Distributions (including loans) from a MEC are taxed on a gain-first basis and may incur penalties, unlike non-MEC policies.

4. Contributions to a traditional qualified retirement plan are generally:

Tax-deductible, with distributions taxed later

Traditional qualified plan contributions are typically pre-tax (deductible), and distributions are taxed as ordinary income when received.