Jock agreed to play football for Pro Corporation. Pro, fearful that Jock might not survive, acquired a $1 million insurance policy on Jocks life. If Jock dies during the term of the policy and the proceeds of the policy are paid to Pro, what different consequences will Pro incurred under the following alternatives?

(a) With Jocks consent Pro took out and paid $20,000 for a two-year term policy on Jocks life.

(b) Jock owned a paid-up two-year term $1 million policy on his life which he sold to Pro for $20,000, Pro being named beneficiary of the policy.