Gary Cashed in an Insurance Policy on His Life

question 109

True/False

Gary cashed in an insurance policy on his life.He needed the funds to pay for his terminally ill wife's medical expenses.He had paid $15,000 in premiums and he collected $30,000 from the insurance company.Gary is required to include the gain of $15,000 ($30,000 - $15,000)in gross income.

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Definitions:

Production

The process of creating goods and services through the combination of labor, capital, and resources.

Workfare Programs

Government initiatives that require individuals to work in return for receiving certain benefits, such as welfare.

Employable

Describes individuals who possess the necessary skills, qualifications, and health to perform a job and be hired.

Welfare Recipients

Individuals or families that receive assistance from government programs designed to support those in financial need.