Willie purchased a whole-life insurance policy on his brother, Benny. Under the policy, the insurance company will pay the named beneficiary $55,000 upon the death of the insured, Benny. Willie names Tess the beneficiary, and upon Bennys death, Tess receives the proceeds of the policy, $55,000. Identify the transfer tax implications of this arrangement. Required:

1. At the time of purchase of the policy.
2. Upon Bennys death.