distributed out of a S.A.F.E. account shall be included in gross income of the distributee for the taxable year in which the distribution is received. Notwithstanding any other provision of this title (including chapters 11 and 12), the basis of any person in such an account is zero. (2) Exceptions for distributions after age 59 1/2 or death Paragraph (1) shall not apply to any distribution out of a S.A.F.E. account— (A) made on or after the date on which the account beneficiary attains age 59 1/2 , or (B) made to the account beneficiary (or to the estate of the beneficiary) on or after the death of the account beneficiary. (3) Exceptions for distributions to purchase certain insurance Paragraph (1) shall not apply to any distribution out of a S.A.F.E. account to the account beneficiary to the extent such distributions do not exceed the sum of the expenses paid or incurred during the taxable year for— (A) any qualified long-term care insurance contract (but only to the extent of eligible long-term care premiums (as defined in section 213(d)(10)), (B) disability insurance, or (C) term life insurance. (4) Exceptions for certain other distributions Rules similar to the rules of paragraphs (3), (4), (5), and (6) of section 408(d) shall apply for purposes of this section. (e) Tax treatment of accounts (1) Exemption from tax A S.A.F.E. account is exempt from taxation under this subtitle unless such account has ceased to be a S.A.F.E. account by reason of paragraph (2). Notwithstanding the preceding sentence, any such account is subject to the taxes imposed by section 511 (relating to imposition of tax on unrelated business income of charitable, etc. organizations). (2) Account terminations Rules similar to the rules of paragraphs (2) and (4) of section 408(e) shall apply to S.A.F.E. accounts, and any amount treated as distributed under such rules shall be treated as not used to pay expenses described in subsection (d)(3). (f) Additional tax on amounts included in gross income If any distribution from a S.A.F.E.