1. Policy dividends paid on a New Mexico participating life policy are generally treated as:

A return of premium that is generally not taxable income

Dividends from participating policies are generally treated as a nontaxable return of premium rather than ordinary income.

2. A health savings account paired with a New Mexico high-deductible health plan allows the accountholder to:

Set aside pre-tax dollars for qualified medical expenses

An HSA lets eligible individuals contribute pre-tax dollars to pay qualified medical expenses when paired with a qualifying high-deductible plan.

3. A tax-free exchange of one annuity for another under federal Section 1035 allows a New Mexico owner to:

Avoid current taxation on the gain when exchanging like contracts

A Section 1035 exchange lets an owner exchange like contracts without recognizing current taxable gain.

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

Received income-tax-free by the beneficiary

Lump-sum life insurance death benefits are generally received income-tax-free by the beneficiary.