Jake comes to for estate planning advice. He asks you if life insurance proceeds are tax$-$free. You explain the following:

$1.$ The proceeds are subject to estate taxes in the estate of the insured if the insured is the owner.

$2.$ The proceeds may be subject to income taxes if the policy was sold to a third party.

$3.$ The proceeds are not subject to income tax, even if sold to a third party if the contract is a modified endowment contract.

$4.$ The death benefit paid to the beneficiary is income tax free to the beneficiary.

Did you give correct advice on #$1?$

Did you give correct advice on #$2?$

Did you give correct advice on #$3?$

Did you give correct advice on #$4?$