Suppose Kim has determined that a $100,000 universal life insurance policy would best suit her needs. Tina Trustworthy, a local life insurance agent, quoted her a monthly rate of $300. She remembers learning from her personal finance course that premiums for similar policies, so she plans to . Before doing anything else, she decides to consult her Uncle Jim, an attorney, about the features of his life insurance policy. He tells Kim that he has a 10-year $200,000 term life policy. Tina Trustworthy is the second life insurance agent Kim consulted. The first agent she saw was David Dishonestman. Kim began to suspect that rath than trying to serve her best interests, David Dishonestman was primarily interested in earning as high a commission as possible. Which of the following behaviors would have raised Kim's suspicions? Check all that apply. O David Dishonestman described a policy with a high rate of interest, but it had to be purchased the day of Kim's visit to lock in the rate. O David Dishonestman implied that the current high rate of return on the policy he favored was only likely to increase in the future.
Suppose Kim has determined that a $100,000 universal life insurance policy would best suit her needs. Tina Trustworthy, a local life insurance agent, quoted her a monthly rate of $300. She remembers learning from her personal finance course that premiums for similar policies, so she plans to . Before doing anything else, she decides to consult her Uncle Jim, an attorney, about the features of his life insurance policy. He tells Kim that he has a 10-year $200,000 term life policy. Tina Trustworthy is the second life insurance agent Kim consulted. The first agent she saw was David Dishonestman. Kim began to suspect that rath than trying to serve her best interests, David Dishonestman was primarily interested in earning as high a commission as possible. Which of the following behaviors would have raised Kim's suspicions? Check all that apply. O David Dishonestman described a policy with a high rate of interest, but it had to be purchased the day of Kim's visit to lock in the rate. O David Dishonestman implied that the current high rate of return on the policy he favored was only likely to increase in the future.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:9. Comparing policies
Shopping for Life Insurance
Suppose Kim has determined that a $100,000 universal life insurance policy would best suit her needs. Tina Trustworthy, a local life insurance agent,
quoted her a monthly rate of $300. She remembers learning from her personal finance course that premiums
for
similar policies, so she plans to
Before doing anything else, she decides to consult
her Uncle Jim, an attorney, about the features of his life insurance policy. He tells Kim that he has a 10-year $200,000 term life policy.
Tina Trustworthy is the second life insurance agent Kim consulted. The first agent she saw was David Dishonestman. Kim began to suspect that rather
than trying to serve her best interests, David Dishonestman was primarily interested in earning as high a commission as possible.
Which of the following behaviors would have raised Kim's suspicions? Check all that apply.
O David Dishonestman described a policy with a high rate of interest, but it had to be purchased the day of Kim's visit to lock in the rate.
O David Dishonestman implied that the current high rate of return on the policy he favored was only likely to increase in the future.
O David Dishonestman strongly suggested that Kim buy a cash-value plan and didn't even tell her that term policies existed.
O David Dishonestman described all of the advantages and disadvantages of term and cash-value plans.
Which of the following are appropriate next steps for Kim? Check all that apply.
O Find out whether Tina Trustworthy has a professional designation, such as Certified Financial Planner (CFP).
O Assume that because the agent she spoke to is licensed, he or she will serve her best interests.
O Compare quotes for $100,000 universal policies online.
O Find out the monthly premium Jim pays on his policy to compare it with the premium quoted by the agent.
O Go with a 10-year $200,000 term policy instead, since as an attorney, Jim probably chose the best policy.
O Research the ratings of different insurance companies, as awarded by private agencies such as Standard and Poor's.
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