The valuation rules for determining fair market value and basis of typical life insurance policies are somewhat in transition due to Rev. Rul. 2009-13 and the emergence of the life settlement market. However, for newly issued policies and paid-up policies the rules for determining fair market value are 1. Use the interpolated terminal reserve plus the unused part of the last premium for fair market value of a newly-issued policy and the first premium paid for the value of a paid-up policy. 2. Use the interpolated terminal reserve plus the unused part of the last premium for fair market value of a paid-up policy and the first premium paid for the value of a newly-issued policy. 3. Use the first premium paid for fair market value of a newly-issued policy and replacement cost for the value of a paid up policy. 4. Use the replacement cost for the fair market value of a newly-issued policy and the interpolated terminal reserve plus the unused part of the last premium for fair market value of a paid-up policy 5. Use the first premium paid for fair market value of a paid up policy and replacement cost for the value of a newly-issued