Christina is a divorced independent marketing consultant age 32, in excellent health,with two young children. She took out a $100,000 whole life insurance policy sevenyears ago, before the children were born. At that time she was employed in anadministrative capacity in a real estate office and had a limited income. Sheappreciated the value of permanent life insurance but was concerned about herability to afford whole life premiums over the long-term. Consequently, she chose adividend option that applied the annual policy dividend to reduce the premium dueeach year. Christina is now doing much better financially and can easily afford theannual premium. With two children dependent on her she is concerned, however,that the death benefit of her policy should increase with inflation over the long-term.What dividend option could Christina select to meet her current needs?A) The premium reduction dividend optionB) The cash dividend optionC) The accumulation dividend optionD) The paid-up addition dividend option

Since she is financially independent and can afford all the premimum as per the current need she…

Answered: Christina is a divorced independent…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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