Question: I took my wife along on a business trip so she could visit family near the city I went to. Do I just claim half of the total expenses for the trip?

Answer: No -- you would be cheating yourself out of a part of the allowable deduction if you did that. You are permitted to claim the full amount of the expenses you would have incurred if she hadn't gone with you.

For example, if you went by air and your wife qualified for a special half-fare discount, you can deduct the cost of your full-fare ticket rather than half of your total cost.

If you drove, you may claim the entire 18.5 cents a mile (or actual costs, if you use that method) plus tolls and parking, since the cost would have been the same if you had gone alone.

You cannot deduct the "market value" of accommodations if you both stayed with relatives -- only out-of-pocket costs are eligible. But if you stayed at a hotel or motel, do not claim just half of the bill. Instead, you may include the normal charge for a single room of similar quality -- what it would have cost if you had been by yourself.

Deduct the cost of your meals, but not your wife's. And of course you can only claim business-related expenses; you can't deduct, for instance, transportation for either you or your wife to visit family or for sightseeing.

Q: Either in your column or someplace else I read that if I die the cash value of my insurance policy is lost. I don't understnad this; how can the insurance company avoid paying the full policy proceeds to my beneficiary?

A: At your death the company will pay to your beneficiary the full face amount of the policy (plus any accumulated dividends left on deposit, and minus any outstanding loan balance).

But the company will pay just the face amount -- not the face amount plus cash value. So some insurance experts -- particularly those who favor term insurance (which doesn't accumulate cash value) over ordinary life insurance -- like to say that the cash value is "lost."

In a sense I suppose it is, because you could have withdrawn the cash value before you died, so the company only pays out of its own funds the difference between the cash value (your own money, in a way) and the face amount.

But the accumulation of cash value is what makes it possible for the company to insure you for the same annual premium cost throughout your life. As you know, the premium for the same amount of term insurance goes up regularly as you get older.

The reason the company can charge the same premium over the years is that the amount the company has "at risk" -- that difference between face and cash value -- is going down regularly, so you are in effect paying a constant premium for a decreasing amount of insurance.

For other reasons (which I won't go into here) I recommend term insurance rather than oridinary life for most people in most circumstances. But the so-called "loss" of cash value is not one of those reasons; it is instead a principle contributor to the constant-premium aspect of ordinary life insurance.