Life Insurance Answers

Eva is 29 years old and has 2 children, ages 3 and 5. She makes $48,500 a year. Eva decides to buy a $400,000 10-year term policy and then renew the policy for another ten years afterwards. To renew the policy the insurance company charges an extra 40% to her premium rate. Given the options below, assess whether Eva made a wise decision. a. Eva would have been better off selecting the 20-year term policy. b. Even with the extra charge for renewal, Eva’s plan is the least expensive. c. Given that Eva plans to renew, she should have selected the whole life policy. d. Eva ends up paying the same amount for each policy. Please select the best answer from the choices provided

Because Bernard has some health issues, he must pay 15% more for life insurance. About how much more annually will a $115,000 10-year term insurance at age 35 cost Bernard than someone of the same age without health issues? a. $161 b. $185 c. $1,073 d. $24 Please select the best answer from the choices provided

Angelo, age 40, is comparing the premium for a $125,000 whole life insurance policy he may take now and the premium for the same policy taken out at age 45. The Annual Life Insurance Premium (per $1000 of face value) for a 40-year-old male is 22.60 and for a 45-year-old male is 27.75. What would be the difference in total premium costs over 20 years for this policy at the two age levels? a. $69,375 b. $11,725 c. $12,875 d. $644 Please select the best answer from the choices provided

Your children are 3 and 5 years old now, and you want an inexpensive policy that covers your family at least until the youngest is 22. Based on the given information, what is the best policy to buy? a.Whole life policy b.10-year term policy c.15-year term policy d.20-year term policy

Between permanent life insurance and term life insurance, which typically has the lower premium and why?a.Term life insurance has the lower premium because term life insurance pays the face value to your beneficiary if you die within a certain set period of time, whereas whole life insurance covers you your entire life. b.Term life insurance has the lower premium because you cannot renew the insurance after your term has ended.c.Permanent life insurance has the lower premium because you are making more premium payments (your whole life versus a set period of time), so the amount per premium payment is less. d.Permanent life insurance has the lower premium because the amount you contribute is then invested and makes interest for the life insurance company.

DeShawn is 38 years old and is married with 3 children, ages 2, 4, and 6. He makes $45,000 a year and is planning to retire when he turns 60. From the following three options, DeShawn decides to buy the $900,000 20 year term policy. Given DeShawn’s scenario, assess whether DeShawn made a wise decision. a. DeShawn would be safer buying whole life policy. b. DeShawn would have more money in the long run if he invested in the 20-year endowment. c. DeShawn’s current policy will cover his family for an adequate period of time at his current salary. d. DeShawn’s current policy has too high of a face value and does not cover his family long enough. Please select the best answer from the choices provided

If Jesse wants to buy a $75,000 10-year term life insurance policy, and the annual premium rate (per $1000 of face value) for his age group is $2.34, how much is Jesse’s annual premium?a.$175.50 b.$3,205.12 c.$234.00 d.$1,755.00

Sherita, age 37, wants to pay no more than $750 a year in life insurance. If the annual life insurance premium rate (per $1000 of face value) is $3.96, what is the largest 15-year term policy she can buy without spending more than $750 annually?a.$189,000 b.$109,890 c.$203,252 d.$276,750

Maria, age 28, wants to pay no more than $300 a year in life insurance. What is the face value of the largest 20-year term policy she can buy without spending more than $300 annually? a. $234,000 b. $158,000 c. $11,000 d. $567,000 Please select the best answer from the choices provided

When shopping for life insurance, the best strategy is to: a.Follow your agent’s recommendations. They are the experts and it is the agent's job to make sure you get the products that are right for you. b.Buy your coverage through your employer, if possible.c.Figure out how much you need, then comparison shop using the Web and other resources. d.Wait until you are older so that you can buy a cheaper, shorter term policy.