1. Under the Internal Revenue Code, life insurance proceeds paid because of the insured's death are generally:

Excluded from the beneficiary's gross income

26 U.S.C. 101(a)(1) excludes from gross income amounts received under a life insurance contract by reason of the insured's death.

2. A taxable distribution from a deferred annuity taken before the owner reaches age 59 1/2 is generally subject to an additional federal tax of:

10 percent

26 U.S.C. 72(q) imposes a 10-percent additional tax on the taxable portion of premature annuity distributions, with exceptions such as reaching age 59 1/2.

3. Disability benefits from an individual policy for which the insured paid the premiums with after-tax dollars are, for federal income tax:

Excluded from gross income

26 U.S.C. 104(a)(3) excludes amounts received through accident or health insurance for personal injury or sickness, other than amounts attributable to employer contributions not taxed to the employee.

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

Received income-tax-free

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