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.

---

Definitions:

Culturally Diverse

Refers to the presence of multiple cultural groups within a community or society.

Self-Awareness

The conscious knowledge of one's own character, feelings, motives, and desires.

Analgesia Administration

The process of providing medication or treatment to relieve pain, which may be achieved through various routes and modalities.

Health Disparities

Differences in health status or access to healthcare across different populations, often influenced by social, economic, or environmental factors.