All of the statementsregarding the taxation of insurance policies are correct,except:

When a new policy is bought for another person,the gift tax value is the gross premium paid by the donor.

When a single policy is gifted jointly to two children,the transfer qualifies for two annual exclusions.

When premiums are paid on behalf of a policy owner,the premium payments are gifts subject to gift taxes.

When a grandparent transfers a policy directly to a grandchild,the transfer can use annual exclusionsto reduce any taxable gifts and GST taxes.