Transfer-For-Value Rule

Categories: Accounting

You have a life insurance policy. However, you've fallen on some hard times. Your earthworm farm didn't turn out like you expected, and now you're searching for cash. In order to raise money, you sell your life insurance policy to the guy who owns the live bait store. He gives you $20,000; now he's in line to receive your $50,000 death benefit when you die.

A couple weeks later, you get stuck in a mud hole trying to plant a new crop of worms (you never did understand the business very well). You drown. Now the bait store guy gets the $50,000 benefit.

Here's where the transfer-for-value rule comes into play. Normally, death benefits from insurance don't get taxed. Not even a politician wants to be seen taking cash from widows and orphans. However, that no-tax rule wasn't meant to benefit predatory bait store owners. As a result, the transfer-for-value rule exists. It states that if a life insurance policy gets sold (transferred for anything of value), it loses its no-tax status. The funds received by the bait store guy are now subject to ordinary income tax.

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Finance: What is mortality rate?2 Views

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and finance Allah shmoop What is mortality rate Oh and

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no we're not talking about the frequency with which Rick

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and Morty episodes are aired We're talking about Mort Alice

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E Rate which is about death and dying You know

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much more of a downer Well the mortality rate is

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a rate that measures the number of deaths either in

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general or from something specific per some bounded population per

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unit of time but most often mortality rates or the

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number of deaths per thousand people per year Keeping the

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per thousand people and per year makes it easier to

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measure mortality rates against each other without having to do

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extra math to make all the units equal When working

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with bigger populations it may be scaled up to one

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hundred thousand people per year For example the maternal mortality

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rates of different nations show how many moms die before

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during or after childbirth per hundred thousand live birth from

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any cause related to pregnancy Well in the US the

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maternal mortality rate more than doubled from twelve pregnancy related

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deaths per one hundred thousand live births in nineteen ninety

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and two thousand to twenty eight pregnancy related deaths per

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hundred thousand live burst in two thousand fifteen Poland Iceland

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Greece and Finland all boasted only three deaths per hundred

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thousand in two thousand fifteen way better than Angola Chat

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in Kenya which had over four hundred deaths per one

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hundred thousand Yeah no joke Maybe give Mom a quick

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call just to say you know thanks Alright so switching

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gears literally What about motor vehicle deaths in the U

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S Yeah there are a couple of ways we can

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look at this one One is deaths per the number

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of miles driven and the other is death for the

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population Well as society and technology have advanced the number

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of miles Americans have been racking up has grown faster

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than a population rate will The general trend for both

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of these things has been the direction we'd hoped for

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Down down down in nineteen twenty one car related deaths

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per one hundred million vehicle miles traveled or V MTS

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was just over twenty four By nineteen fifty we got

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that number down to just over seven and in the

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two thousand two tens it's just over one one death

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for one hundred million miles Now let's look at the

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death rate in terms of the population rather than miles

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driven right The more traditional death rate here in nineteen

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twenty one card related deaths per one hundred thousand people

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is just over twelve By nineteen fifty That number unfortunately

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went up to above twenty one Fortunately it's been in

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the ten to eleven range in the two thousand ten's

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Big Relief As long as a while you're not one

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of those eleven Well we can see that the death

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rate in terms of miles has gone down sharply There's

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the graph The more miles we've driven in the US

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the more sharply car related deaths have dropped in terms

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of population The stories little rockier car related deaths were

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pretty up and down for a while until well around

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the nineteen seventies when it started on a mostly downward

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trend So our population starts driving Mohr more miles per

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person and more people aren't dying So that's good If

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car related deaths in nineteen twenty one were twelve per

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hundred thousand people and today there's somewhere around ten or

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eleven per hundred thousand Well why haven't there been more

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laws enacted to prevent death Well even slower speed limits

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maybe perhaps laws outlawing driving all together Then we'd have

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zero deaths per one hundred thousand miles Well because society

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has decided that one car related death for ten thousand

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people are one car related death for one hundred million

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miles driven is a price worth paying It's a price

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worth it at least to everyone But that one dude

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who got nailed by the texting team Well mortality rates

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live perpetually high in the minds of insurance companies whose

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lawyers air always invoked When a fatality occurs right Angry

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parents and spouses must find a way to sue the

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irresponsible or maybe just unlucky driver so that well they

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feel better about Morty or Rick not being around anymore

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Besides insurance companies well who else uses mortality rates in

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their jobs The military Yes young people mostly men many

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who think Oh it won't be me who dies get

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sent directly into gunfire after ten thousand of them run

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into bullets eight thousand of them return and the mortality

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rate yes that would be calculated as twenty percent their

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insurance companies militaries and groups advocating for social change like

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your new mommy's dying All use mortality rates the truth

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is each of us will one day be a mortality

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stat or a Morty The question is on which data

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table will you be if you're lucky Maybe one of

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the boring ones where you died because you're super old

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Or maybe you'LL cryogenically freeze your head in case they 00:04:19.98 --> [endTime] ever figure out howto bring you back Maybe

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