Liam was the beneficiary of a life insurance policy on his wife. Liam had paid $20,000 in premiums on the policy. Be collected $50,000 on the policy when his wife died from a terminal illness. Because it took several months to process the claim, the insurance company paid Liam $52,000, the face amount of the policy plus $2,000 interest. Liam is not required to recognize any income from the above transactions.

a. Trueb. False