David Has Been Diagnosed with Cancer and Is Expected to Live

question 51

Multiple Choice

David has been diagnosed with cancer and is expected to live less than 18 months.David is covered by a life insurance policy with a $400,000 face amount.David cashes in the policy early under a special option and receives 80% of the face amount or $320,000.In the year of collection,David will report

• A)no income.
• B)$80,000.
• C)$320,000.
• D)$400,000.

---

Definitions:

Quasi Contract

An obligation imposed by law to prevent unjust enrichment, where there is no real contract between the parties.

College Catalog

An official publication by a college or university that provides essential information about academic programs, policies, and regulations.

Steinberg v. Chicago Medical School

A legal case involving the issue of whether a private medical school acted improperly in the admission process, considering contractual obligations.

Material Misrepresentation

A false statement of fact made by one party to another, which, if had been known to be false, may have influenced the decision to enter into a contract or agreement.