The following situations describe recent events involving individual life insurance policies. Select the answer choice that describes a situation in which a taxable event most likely occurred. Cathy Huang, the policyowner of a participating individual life insurance policy, received her first policy dividend. Seth Ullman, an individual life insurance policyowner, took out a policy loan. Vidya Palliyil surrendered her individual life insurance policy, on which she had paid total premiums of $5,300, for its cash surrender value of $5,500. The cash value of Jacob Murphy's individual life insurance policy increased, and the policy remains in force