After taking an introductory course in insurance, your parents ask you what type of life insurance policy they should purchase to get permanent death protection with a fixed premium amount, a guaranteed rate of return on their cash value, and a level death benefit. Which type of life insurance will you recommend?

Question

Quizplus · Accepted Answer

Whole life insurance provides permanent death protection with a fixed premium amount and a level death benefit. It also offers a guaranteed rate of return on the cash value component, making it an excellent choice for those seeking both protection and investment opportunities. Universal life insurance, on the other hand, has a more flexible premium structure and variable life insurance is tied to underlying investments, making their returns less predictable. Term life insurance does not offer any cash value or investment component, so it would not meet the requirements stated in the question.

After Taking an Introductory Course in Insurance, Your Parents Ask