Question

21 azmi is a 31-year-old busy single mother of a 3-year-old boy. she works as a lawyer and is planning to buy a house in five years. she wants to purchase a life insurance policy on her life so that her sons life is secure if she dies prematurely. based on her needs, her insurance agent recommends a participating whole life insurance policy. azmi would like to know why the agents recommendation is better than buying a term insurance policy. the agent would say that: qw96wusvwwnocncvqwppz0hyvibout09 a. unlike term insurance, a whole life policy never requires renewal and will remain in force even if azmis health declines. b. while azmi is relatively young, premiums of a whole life policy are generally lower than premiums for the same amount of term life coverage. c. a participating whole life policy provides guaranteed policy dividends, an option not available with term insurance policy. d. unlike term insurance, coverage offered by a whole life policy can be customized to a specific duration. qw96wusvwwnocncvqwppz0hyvibout09

Explanation:

• Option a: Whole life insurance is a permanent policy, so it doesn't require renewal and stays in force regardless of health changes (term insurance is temporary and may require renewal with possible health - related premium increases or denial).
• Option b: Whole life premiums are generally higher than term life premiums for the same coverage, especially when the insured is young.
• Option c: While participating whole life can have dividends, they are not guaranteed (they depend on the insurance company's performance).
• Option d: Term insurance is the one that is customized to a specific duration (whole life is for the entire life of the insured).

Answer:

a. Unlike term insurance, a whole life policy never requires renewal and will remain in force even if Azmi's health declines.