Mutual Life is offering a $100 000 term life insurance policy for an annual premium of $1200. Manulife is offering a $75 000 whole life policy with a premium of $1800. If, in thirty years, the term life insurance terminates and the whole life insurance has cash value of $30 000, which is of the following is true?
A) The term policy cost $36,000 for $100 000 coverage for 30 years and the whole life cost $54 000 for less coverage, so the term insurance was better.
B) The whole life policy is better value now. The term insurance would have been better value for a few years.
C) The cost per $1000 of insurance for the term policy is $12 and for the whole life policy is $24.The term policy is better.
D) The cost per $1000 of insurance for the term policy is $83.33 and the whole life policy is $41.67, so the whole life policy is better.
Correct Answer:
Verified
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