When Betty Was Diagnosed as Having a Terminal Illness, She

question 35

True/False

When Betty was diagnosed as having a terminal illness, she sold her life insurance policy to Insurance Purchase, Inc., a company that is licensed to invest in these types of contracts. Betty sold the policy for $32,000 and Insurance Purchase, Inc., became the beneficiary. She had paid total premiums of $19,000. Betty died 8 months after the sale. Insurance Purchase, Inc., collected $50,000 on the policy. The company had paid additional premiums of $4,000 on the policy. Betty is not required to recognize a $13,000 gain from the sale of her life insurance policy and Insurance Purchase, Inc., is required to recognize a $14,000 gain from the insurance policy.

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Definitions:

Smoking

The act of inhaling and exhaling the smoke of burning tobacco, which is known to be harmful to health and a major cause of several diseases, including cancer.

Public Places

Areas that are open and accessible to the general public, such as parks, libraries, and streets.

Morbidity Rates

The frequency or proportion of individuals in a population who experience a specific illness, condition, or disease during a given time period.

Smoking Kills

A warning indicating that the act of inhaling smoke from substances, such as tobacco, has been medically proven to result in fatal diseases, including cancer and heart disease.