Which statement regarding estate taxes and life insurance is true?

The statement regarding estate taxes and life insurance that is true indicates that life insurance proceeds can be included in the insured's estate. This inclusion depends on several factors, such as ownership, beneficiary designations, and the payout structure of the policy.

When a life insurance policy is owned by the insured and the death benefit is paid to their estate, the proceeds will typically be subject to estate taxes. This is because the value of the policy is considered part of the insured individual's total estate at the time of their death. It’s important for individuals to understand how the structuring of their life insurance policies can impact estate tax liabilities, as proper planning can potentially reduce the estate tax burden.

In this context, the other statements do not hold true. Life insurance proceeds can indeed be tax-free to beneficiaries if structured appropriately, but this is not an absolute rule, especially when aspects of estate taxation come into play. Insurances like term, whole, or universal can all be subject to estate taxes under certain conditions, opposing the notion that only term life insurance can incur such taxes. Additionally, estate taxes are applicable to individual policies as well, not just corporate ones, hence making the application of taxes broader than suggested in the last choice. Understanding these nuances is crucial for effective