Which of the following statements is CORRECT regarding the tax treatment of a lump-sum payment paid to a life insurance policy’s primary beneficiary? The proceeds which exceed the amount paid in premiums are taxable The proceeds are taxable only if the beneficiary’s tax bracket has changed from the payout All proceeds are considered taxable income in the year they are received All proceeds are income tax free in the year they are received

Which of the following statements is CORRECT regarding the tax treatment of a lump-sum payment paid to a life insurance policy’s primary beneficiary? 
The proceeds which exceed the amount paid in premiums are taxable
The proceeds are taxable only if the beneficiary’s tax bracket has changed from the payout
All proceeds are considered taxable income in the year they are received
All proceeds are income tax free in the year they are received

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