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Selena is age 75 and has a great deal of difficulty living independently as she suffers from severe rheumatoid arthritis. She is covered by a
Selena is age 75 and has a great deal of difficulty living independently as she suffers from severe rheumatoid arthritis. She is covered by a $750,000 life insurance policy, and her children are named as her beneficiaries. Because of her health, Selena decides to live in a nursing home, but she does not have enough income to pay her nursing home bills which are expected to total $48,000 per year. The insurance company offers disabled individuals the option of either a reduced settlement on their policies or an annuity. Given Selena's age and health she has the option of receiving $3,500 per month or a lump sum payment of $700,000. To date, Selena has paid $120,000 in premiums on the policy. a. How much income must Selena report if she chooses the lump sum settlement? b. How much income must Selena report if she elects the annuity? c. How much income would Selena have to report if her nursing home bills amounted to only $38,000 per year? sume the year is 2019 and that the exclusion for periodic payments made to a chronically ill person is limited to the greater of $370 per day or the actual cost of such care.) Print Done Selena is age 75 and has a great deal of difficulty living independently as she suffers from severe rheumatoid arthritis. She is covered by a $750,000 life insurance policy, and her children are named as her beneficiaries. Because of her health, Selena decides to live in a nursing home, but she does not have enough income to pay her nursing home bills which are expected to total $48,000 per year. The insurance company offers disabled individuals the option of either a reduced settlement on their policies or an annuity. Given Selena's age and health she has the option of receiving $3,500 per month or a lump sum payment of $700,000. To date, Selena has paid $120,000 in premiums on the policy. a. How much income must Selena report if she chooses the lump sum settlement? b. How much income must Selena report if she elects the annuity? c. How much income would Selena have to report if her nursing home bills amounted to only $38,000 per year? sume the year is 2019 and that the exclusion for periodic payments made to a chronically ill person is limited to the greater of $370 per day or the actual cost of such care.) Print Done
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