Ashley Owns a Whole-Life Insurance Policy Worth $25,000 That Directs

question 78

Essay

Ashley owns a whole-life insurance policy worth $25,000 that directs the insurance company to pay the beneficiary $500,000 on her death. Ashley pays the annual policy premiums and has the power to designate the beneficiary of the policy. What value of the policy, if any, would be included in Ashley's estate upon her death?

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Definitions:

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, showing the company's financial position.

Income Statement

A statement that outlines the financial activities, including incoming revenue, outgoing expenses, and total net profit, of an organization within a specific time.

Return On Equity

A financial ratio that measures the profitability of a company in generating profit from its shareholders' equity.

Dividends

Disbursements from a company to its shareholders, typically originating from the firm's earnings.