Number: RL32000
Title: Taxation of Life Insurance Products: Background and Issues
Authors: Andrew D. Pike, Consultant, Government and Finance Division 
Abstract: This report examines the tax treatment of life insurance under the Internal Revenue Code. The second section introduces different types of life insurance, and the financial and economic framework upon which these products are constructed. The third section examines the tax provisions of the Internal Revenue Code that apply to the owners of life insurance. Section IV considers the justifications for the favorable tax treatment from a tax policy perspective. Finally, Sections V and VI examine two types of life insurance arrangements and their tax implicationscorporate-owned life insurance and split dollar life insurancethat have received attention in recent years.
Pages: 33
Date: Updated July 18, 2003