Which is the best reason to buy life insurance quizlet? (2024)

Which is the best reason to buy life insurance quizlet?

The only reason a person would buy life insurance is to eliminate or substantially reduce the financial consequences of that person's death by providing income to his or her dependents.

Which of the following is the best reason to buy life insurance?

Buying life insurance protects your spouse and children from the potentially devastating financial losses that could result if something happened to you. It provides financial security, helps to pay off debts, helps to pay living expenses, and helps to pay any medical or final expenses.

Which of the following is the best reason to purchase life insurance rather?

1. Income replacement for dependents: If you have young children or other dependents who rely on your income, life insurance can ensure their financial security in case of your premature death. An annuity, on the other hand, does not provide the same level of protection.

What is the primary reason for purchasing life insurance?

The primary purpose of life insurance is to provide a financial benefit to dependants upon premature death of an insured person. The policy pays a specified amount called a “death benefit” to the named beneficiary, when the insured dies.

What is the best reason to purchase life insurance instead of annuities?

Annuities take payments upfront and turn them into future income, including the option of guaranteed income for life. Both annuities and life insurance have several options to grow your savings. Life insurance is better for leaving an inheritance, while annuities have more investment and income guarantees.

What is the best reason to purchase life insurance rather than annuities?

In general, life insurance policies protect your family's lifestyle and future by helping to replace your income if you pass away. Fixed annuities, on the other hand, are designed to protect your lifestyle and future by providing a pension-like stream of income that you can use to help fund your retirement.

What is the purpose of life insurance quizlet?

Term life insurance proceeds can be used to replace lost potential income during working years. This can provide a safety net for your beneficiaries and can also help ensure the family's financial goals will still be met—goals like paying off a mortgage, keeping a business running, and paying for college.

Who is most likely to buy life insurance?

Millennials (47%) and Gen X (46%) aren't far behind, with just under half of each generation reporting a life insurance coverage need. Gen X is the most likely to have some life insurance but not enough, with 14% of policyholders saying they need more life insurance than they currently have.

Which of the following is the best reason to purchase life insurance rather than annuities quizlet?

Which of the following is the best reason to purchase life insurance rather than annuities? To create an estate - With insurance, the death benefit creates an immediate estate should the insured die.

Why is term life insurance often the best value for customers?

Term life is often the most affordable life insurance because it's temporary and has no cash value. Whole life premiums are much higher because the coverage typically lasts your lifetime, and the policy grows cash value.

What kind of policy of life insurance is best and why?

If budgeting is your biggest concern, term life insurance may be the best choice. If you have many dependents, whole life insurance may be a better route. However, if financial planning and cash value are most important to you, universal life insurance may be a strong option.

What are 3 things you need to consider when buying life insurance?

Calculate how much life insurance coverage you need. Decide on your financial goals for your life insurance. Determine what type of life insurance best meets your financial needs. Find out if you need to add any "riders" to the policy.

What is the reason that a person buys health or life insurance quizlet?

The only reason a person would buy life insurance is to eliminate or substantially reduce the financial consequences of that person's death by providing income to his or her dependents.

When should I buy life insurance?

The best time to buy life insurance is usually as soon as possible. That's because the younger and healthier you are when you purchase a policy, the lower your premium will generally be. If you're single with no children, life insurance may not be a priority.

What is better than life insurance?

In addition to life insurance, self-funding and annuities can help ensure your loved ones are prepared after your passing.

What is a major advantage of insurance policies?

Insurance is a financial safety net, helping you and your loved ones recover after something bad happens — such as a fire, theft, lawsuit or car accident. When you purchase insurance, you'll receive an insurance policy, which is a legal contract between you and your insurance provider.

What is the biggest disadvantage of an annuity?

However, there are potential cons for you to keep in mind. The biggest of these is simply the cost of an annuity. While some of the safer options, like fixed and indexed annuities, have lower fees, variable annuities can cost you quite a bit due to their improved return possibilities.

Is it a good idea to get life insurance?

Life insurance can be a valuable investment, as a policy can help financially support your loved ones after your death. It can also help cover large debts, like a mortgage or student loans, rather than leaving your family responsible after you die.

What is life insurance in simple words?

Life Insurance can be defined as a contract between an insurance policy holder and an insurance company, where the insurer promises to pay a sum of money in exchange for a premium, upon the death of an insured person or after a set period.

Why life insurance is better than mutual fund?

Investors with a low-risk appetite can go ahead with life insurance, while investors with a high-risk appetite can go for mutual funds. However, in most cases, having a life insurance plan is good as it does not risk losing investment.

What is the purpose of life insurance _____?

Life insurance is insurance that protects against financial losses resulting from death. _____ 2. The purpose of life insurance is to protect the person on whose life an insurance policy is issued.

When shopping for life insurance the best strategy is to what?

When shopping for life insurance, the best strategy is to consider your loved ones' individual needs and future finances. Why? Your life insurance policy's death benefit can provide financial protection for them, pay off debts (mortgage, credit cards, and loans), or even fund an inheritance.

Why is term life insurance better than whole life insurance quizlet?

Term policies do not build cash values. One advantage of term life insurance is the initial premium is lower than for an equivalent amount of whole life insurance. Term life provides the greatest amount of death benefit per dollar of initial cash outlay.

What life insurance never goes up?

The cost never goes up

A whole life insurance policy has fixed premiums, meaning your payments to maintain your policy will never go up. As long as you continue to make premium payments, you're covered for life.

What kind of people buy life insurance?