Adam's life insurance policy is for a very huge amount and that is the reason why her cash value was high when she surrendered it. Since she paid $25000 , she should be eligible for a higher surrender value of $35000. However , when she takes the money after the maturity period,that amount will be deducted from her policy amount.
Adam's $100,000 life insurance policy had a cash value of $35,000 at the time she surrendered it. She had paid aggregate net premiums of $25,000. How much of the lump-sum surrender value must she recognize for tax purposes?
a. $0
b. $10,000
c. $25,000
d. $35,000
