Federal Taxation Of Health Insurance

Front 1

tax-ability of disability income insurance

Back 1

premiums individuals pay for are not tax deductible but benefits policy pays are tax free

Front 2

employer paying premiums on DI policy

Back 2

employer can deduct premiums and are not taxable to the employee BUT benefits paid to employee are considered taxable income

Front 3

premiums a person pays on individually owned medical expenses insurance are considered a personal expense and not deductible expenses. Any benefits paid out are not taxable to insured

Back 3

True

Front 4

medical expenses not covered by insurance benefits may be deductible. unreimbursed expenses up to 10% of persons AGI. 65 years or older use 7.5% AGI

Back 4

50 000 dollars for a 40 year old with 8 000 unreimbursed medical expenses 10% AGI
50 000X 10%= 5 000 8 000-5000= 3 000
the 40 year old can deduct 3 000 dollars

Front 5

LTC policies get favorable tax terms (2) ways

Back 5

1 benefits paid under the policy are not taxable
2 premiums are deductable if they exceed 10% AGI

Front 6

expenses actually incurred on an LTC policy or daily limit ($320) whichever is greater are not taxed. must be chronically ill. T or F

Back 6

true

Front 7

AD and D policy

Back 7

death benefit to insureds beneficiary is not taxed. capital sum payable for insured in dismemberment is not taxed. If death benefit not received in a lump sum payment, than interest earnings will be taxed.