Question

1. harry is a single father of 13 - year - old tracy who has special needs. the following expenses:

• mortgage balance of $190,000
• tracy’s financial needs ($200,000)
• harry’s funeral expenses of $25,000
• taxes to be paid upon his death (estimated at $110,000)

which of the following needs of harry should be addressed with permanent life insurance?
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a. tracy’s financial needs, taxes to be paid upon harry’s death, and funeral expenses
b. mortgage balance, funeral expenses, and taxes to be paid upon his death
c. taxes to be paid upon his death and mortgage balance
d. mortgage balance, tracy’s financial needs, and taxes to be paid upon his death
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Explanation:

Permanent life insurance is used for long - term financial needs that are more likely to be ongoing or have a long - term impact, like financial support for dependents (Tracy's financial needs), long - term debt (mortgage balance), and taxes due at death (which is a long - term financial obligation related to estate). Funeral expenses are more short - term and typically covered by term insurance or other short - term means. So the needs that should be addressed with permanent life insurance are mortgage balance, Tracy's financial needs, and taxes to be paid upon his death.

Answer:

d. Mortgage balance, Tracy's financial needs, and taxes to be paid upon his death