ECONOMICS
INSURANCE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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offers a greater amount of insurance coverage for a specific period of time at a lower cost
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builds more cash value over time for the policy holder
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provides lifetime insurance coverage for a fixed cost per year
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combines lifetime insurance coverage with an opportunity for building savings at a reasonable cost
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Detailed explanation-1: -Term life insurance rates are lower (depending on your age and overall health) than whole life insurance premiums since it is simple and does not develop cash value. The cheaper rates for term life insurance plans are due to the fact that the coverage is only valid for a limited time.
Detailed explanation-2: -If you only need life insurance for a relatively short period of time (such as only when you have minor children to raise), term may be better as the premiums are more affordable. If you need permanent coverage that lasts your entire life, whole life is likely preferred.
Detailed explanation-3: -Term life insurance offers temporary financial protection-usually five to 30 years-for a low, fixed cost. This type of life insurance is best for meeting short-term financial needs, like paying off debts, replacing your income, covering childcare costs and funding your child’s education.
Detailed explanation-4: -Term life insurance tends to be much cheaper than whole life coverage because term policies do not have a cash value component and may expire without paying any benefits. Whole life insurance is a form of permanent life insurance that covers the person for their entire life rather than a fixed period of time.
Detailed explanation-5: -One of the main differences between whole and term life insurance is the cost. The costs of either plan vary depending on age group, gender, and medical history. Even so, whole life insurance tends to have higher premiums than term life insurance.