Albert Had a Terminal Illness Which Required Almost Constant Nursing

question 9

Multiple Choice

Albert had a terminal illness which required almost constant nursing care for the remaining two years of his estimated life, according to his doctor. Albert had a life insurance policy with a face amount of $100,000. Albert had paid $25,000 of premiums on the policy. The insurance company has offered to pay him $80,000 to cancel the policy, although its cash surrender value was only $55,000. Albert accepted the $80,000. Albert used $15,000 to pay his medical expenses. Albert made a miraculous recovery and lived another 20 years. As a result of cashing in the policy:

• A) Albert must recognize $55,000 of gross income, but he has $15,000 of deductible medical expenses.
• B) Albert must recognize $65,000 ($80,000 - $15,000) of gross income.
• C) Albert must recognize $40,000 ($80,000 - $25,000 - $15,000) of gross income.
• D) Albert is not required to recognize any gross income because of his terminal illness.
• E) None of these.

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Definitions:

Empower Children

A process of supporting and encouraging children to gain control over their lives, make decisions, and grow in confidence.

Active Explorers

Individuals, often children, who actively engage with their environment, seeking to learn and discover through direct experience.

Play Environment

A play environment refers to a space designed and equipped to support children's play, offering opportunities for learning, socialization, and physical activity.

Medically Fragile

Referring to individuals, often children, who have serious medical conditions that require extensive care and are at risk of complications.