Paul owns an insurance policy on the life of his father, Rick. Upon Rick's death, the policy proceeds of $2,000,000 are paid to the designated beneficiary, Candace. What are the tax consequences resulting from Rick's death based on the following assumptions?

(I) Candace is Paul's daughter.

(II) Candace is Paul's wife.

(III) What are the tax consequences if Paul dies first (i.e., predeceases both Candace and Rick)?