Question

A young father needing to provide his family with financial security would be better off purchasing: a whole life insurance policy. a term life insurance policy. as much life insurance as they can afford. no life insurance; instead he should focus on saving.

Answer 1

Answer :- Option 'b' is the correct Answer

A young father needing to provide his family with financial security would be better off purchasing a term life insurance policy.

Term life insurance is the most basic form of life insurance. It provides temporary protection for a specified, limited time that can be defined in years or by the age of the insured. If the insured dies during the term of coverage, then the policy's death benefit is paid. If the insured is alive at the end of that term, then the coverage ends, and the policy terminates without value.

Term life is pure insurance, with no cash value (or "savings element") associated with it. Because the policyowner pays only for the cost of pure protection, term insurance premiums are smaller than premiums for permanent insurance for the same insured at the same issue age. However, the older a term insurance policy insured gets, the higher his or her term insurance premiums become.

Because it only offers protection for a limited time, term life is best used for temporary needs or as a stop-gap measure until the policyowner can afford permanent life insurance

While insurers add their own features, term life is available in three basic forms:

1. level term insurance
2. decreasing term insurance
3. increasing term insurance

Permanent insurance:- It lasts for the iinsured's entire lifetime or until age 120. If premiums paid the insurance stays in force and is guaranteed to pay its death benefit.