Bob and Jill are interested in purchasing a life insurance policy. They want to know that should one of them die prematurely, the other will be supported for the rest of their life and upon their death the children will receive a large inheritance. Of the methods to calculate insurance, which one would be best?

Question

Quizplus · Accepted Answer

The best method to calculate insurance needs would be the capital conservation approach. Capital conservation only derives income from the interest gained on the principal. This approach will generate income indefinitely for the survivor because interest is continually generated. It will also create a legacy where if funds are no longer needed they can be given away to a charity or loved ones.

Bob and Jill Are Interested in Purchasing a Life Insurance