David Has Been Diagnosed with Cancer and Is Expected to Live

question 1346

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) $400,000.
• C) $320,000.
• D) $80,000.

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Definitions:

Aerobic Exercise

Physical activity that improves oxygen consumption by the body through sustained, rhythmic movement of large muscles groups.

Mood-boosting Neurotransmitters

Chemical messengers in the brain, such as serotonin, dopamine, and norepinephrine, that affect feelings of happiness and well-being.

Serotonin

A neurotransmitter that plays a key role in regulating mood, sleep, appetite, and digestion, among other functions.

Acetylcholine

A neurotransmitter involved in many functions including muscle movement and memory.