Gary Cashed in an Insurance Policy on His Life

question 19

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 $12,000 in premiums and he collected $30,000 from the insurance company.Gary is not required to include the gain of $18,000 ($30,000 - $12,000) in gross income.

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Definitions:

Insurance Companies

Organizations that provide risk management by compensating for financial losses in exchange for premium payments.

Private Information

Information that is not publicly available and may give an individual or business a competitive advantage.

Hidden Problems

Issues or complications within a system or product that are not immediately obvious or visible.

Buyers

Individuals or organizations that purchase goods or services for personal use, resale, or production.