Inforce Certification - Module 20: Tax Forms

The Inforce Certification provides a comprehensive understanding of the key aspects of life insurance policies once they are in force. This certification covers a range of topics related to policy services, technology, billing, changes, loans, and more. Participants will gain knowledge of how to manage policies post-issue, including understanding policy updates, billing processes, and critical policy changes. The course also includes guidance on the use of technology, such as online portals and software products, and addresses specific policy-related actions like reinstatements, conversions, and surrenders. It will also explore the financial implications of policy loans, collateral assignments, and premium financing. This certification is essential for those involved in life insurance policy administration and advisory services.

Module Overview:

Module 20: Tax Forms

This module covers Section 7702 of the Internal Revenue Code, which defines requirements for life insurance policies to qualify for favorable tax treatment, including tax-deferred cash value growth and tax-free death benefits. It explains how ownership changes affect this section and defines Interpolated Terminal Reserves (ITR). Additionally, it covers the purpose of IRS Form 712 and when it is required.

Learning Objectives

• Understand the purpose and implications of Section 7702 of the Internal Revenue Code.

• Identify the criteria a life insurance policy must meet to receive favorable tax treatment.

• Describe how Section 7702 affects ownership changes.

• Define Interpolated Terminal Reserves (ITR) and its use.

• Understand the purpose of IRS Form 712 and when it is required.

COURSE CONTRIBUTORS