Question

5 dolores, a 38 - year - old accountant, wishes to purchase a life insurance policy. dolores plans to retire at age 65 and does not want to pay the policy premiums after retirement. she doesnt mind paying high premiums now as she wants the policys coverage to continue for life. which of the following insurance policies is a suitable recommendation for dolores?
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a. a t - 100 insurance policy
b. a 30 - year term insurance policy
c. a minimally funded universal life policy
d. a limited payment whole life policy
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Explanation:

To determine the suitable life insurance policy for Dolores:

• Option a (AT - 100 insurance policy): These often have level premiums, but Dolores can pay high premiums now. Not the best fit.
• Option b (30 - year term insurance policy): Term policies expire after the term (30 years here). Dolores wants coverage for life, so term is not suitable as it won't cover beyond 30 years (she plans to retire at 65, 38 + 30 = 68, but she wants life - long coverage).
• Option c (minimally funded universal life policy): Universal life policies have flexibility, but minimally funded may not align with her willingness to pay high premiums now for long - term coverage.
• Option d (limited payment whole life policy): Whole life policies provide lifetime coverage. A limited payment whole life policy allows the policyholder to pay premiums for a limited period (not necessarily the entire life) and then the policy is paid up, providing coverage for life. Since Dolores doesn't mind high premiums now and wants lifetime coverage, this is suitable.

Answer:

d. A limited payment whole life policy