Julia suffered a severe stroke and has been admitted to a private hospital where she is expected to remain for the rest of her life. She is certified by a licensed health care practitioner as being a "chronically ill individual." Her hospital expenses amount to $350 per day. She will receive $340 per day from a $500,000 life insurance policy as an accelerated death benefit. In 2018, she was in
the hospital for 10 days and received $3,400. How much of this amount is taxable?
A) $0
B) $500
C) $100
D) $3,400
A) $0
Because she is a chronically ill individual, Julia may exclude the full amount she receives as it is less than the amount of actual expenses and the daily limitation of $360 established by law.
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"To A" creates a fee simple interest
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