Marthda and Louis Mitchell are a dual-career couple who just had their first child. Louis, age 30, already has a group life insurance policy, but Martha's employer does not offer a life insurance benefit. A finanical planner is recommending that the 27-year-old Martha buy a $250,000 whole life policy with an annual preminum of $1,670 (the policy has an assumed rate of earnings of 5 percent a year). Help Martha evaluate this advice and decide on an appropriate course of action
Marthda and Louis Mitchell are a dual-career couple who just had their first child. Louis, age 30, already has a group life insurance policy, but Martha's employer does not offer a life insurance benefit. A finanical planner is recommending that the 27-year-old Martha buy a $250,000 whole life policy with an annual preminum of $1,670 (the policy has an assumed rate of earnings of 5 percent a year). Help Martha evaluate this advice and decide on an appropriate course of action
Whole life insurance considers payment of premium amount regularly as written in the policy contract that also includes the component of investment and insurance in it. The investment part can be withdrawn by the insurer in cash as a borrowed amount as it is an accumulated value but the insurance part is only given to the insurer upon death.
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