Practice question
Life insurance death proceeds are held by the insurer under an agreement to pay interest. The beneficiary claims the proceeds exclusion necessarily excludes the separate interest too. Which is correct?
- All interest is automatically death proceeds
- Only the beneficiary’s age matters
- Every insurer payment is always taxable
- The policy’s paper size controls
- Section 32(B)(1) distinguishes the excluded death proceeds from the interest, which is included in gross income
Legal references
- https://lawphil.net/judjuris/juri2021/jul2021/gr_226287_2021.html — CIR v. Shinko Electric Industries, G.R. No. 226287, July 6, 2021, main opinion
- https://lawphil.net/statutes/repacts/ra1997/ra_8424_1997.html — NIRC, section 32(B)(1) and (3)
- https://lawphil.net/statutes/repacts/ra2025/ra_12214_2025.html — RA 12214, section 8 amending NIRC section 32
Answer this question in flashcards to review your response and continue practicing.