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

Received income-tax-free

Lump-sum death proceeds are generally received free of federal income tax by the beneficiary.

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

Tax-deferred while it remains in the policy

Cash value grows tax-deferred; a gain is taxable only if the policy is surrendered for more than its cost basis.

3. Premiums an individual pays for personal life insurance are generally:

Not tax-deductible

Personal life insurance premiums are paid with after-tax dollars and are not deductible.

4. Policy dividends on a participating life policy are taxable only when:

Total dividends exceed the total premiums paid (cost basis)

Dividends are a nontaxable return of premium until they exceed the policyowner's cost basis.