Matt and Hillary Are Husband and Wife and Live in Pennsylvania.Using

Matt and Hillary are husband and wife and live in Pennsylvania.Using joint funds,in 1990 they purchase an insurance policy on Matt's life and designate their daughter,Sandra,as the beneficiary.The policy has a maturity value of $2,000,000.Matt dies first and the insurance proceeds are paid to Sandra.As to the proceeds:

A) Matt's taxable estate includes $0, and no other tax consequences ensue.
B) Matt's taxable estate includes $2,000,000.
C) Matt's taxable estate includes $0, and Hillary makes a gift of $2,000,000 to Sandra.
D) Matt's taxable estate includes $1,000,000, and Hillary makes a gift to Sandra of $1,000,000.
E) None of the above