Allison is trying to complete her income-tax return. A number of questions have come up about life in- surance. Explain the tax treatment of each of the following.

a. Allison is the beneficiary named in her grandfa- ther's life insurance policy. Her grandfather died this year and Allison received a lump-sum payment of $50,000. She wonders if she has to report the $50,000 as taxable income.

b. Allison purchased a $100,000 cash value life insur- ance policy on her own life six years ago. This year, the cash value increased by $380. Allison wonders if the cash-value increase must be reported as tax- able income. The policy remains in force.

c. Allison's annual life insurance premium is $350. Allison itemizes her income-tax deductions. She wonders if her life insurance premium is a tax- deductible expense.

d. Allison's ordinary life insurance policy is a partici- pating policy. This year she received $120 in poli- cyowner dividends. She wonders if she is required to report the $120 as taxable income.