Which product primarily provides a guaranteed lifetime income option: life insurance or annuity?
QUESTION
What is the accumulation phase of an annuity contract?
QUESTION
What is the key tax difference between life insurance death benefits and annuity payments?
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ANSWER
Life insurance death benefit is generally income tax-free; annuity payments are partly taxable. Life insurance death benefits exclude income tax under IRC rules, while annuity payments use an exclusion ratio to tax only the earnings portion.