You are putting $100 a month into a conservative bond fund to pay for your child's college education. You worry that if you die before you get enough saved, your child will not be able to get a college education. Which of the following types of life insurance would best fit your needs at the lowest cost?

Question

Question 13 options:

Whole life

Universal life

Decreasing term

Variable life
Question 14 (2 points)
Your need for life insurance will last for 20 years. You also wish to save some money over that same time period. What kind of life insurance would fill this requirement?
Question 14 options:

Term

Decreasing term

Universal life

Whole life

Answer 1

Question 13:

Given your concern about ensuring that your child can still afford a college education in the event of your death, the best option among the choices listed would be Decreasing term life insurance.

Explanation: Decreasing term life insurance provides coverage for a specified term (in your case, potentially until your child finishes college). The payout amount decreases over the period, aligning with your decreasing need as funds are accumulated. This type of policy is typically more affordable than permanent life insurance types (like whole or universal life).

Question 14:

Since your need for life insurance will last for 20 years and you also wish to save some money over that time period, Universal life insurance would best fit your requirements.

Explanation: Universal life insurance provides a death benefit and the potential for cash value accumulation, which can be used as a savings component. It offers flexibility in premium payments and allows you to accumulate savings over the duration of the coverage, which aligns well with your 20-year timeframe.

In summary:

• Question 13: Decreasing term life
• Question 14: Universal life insurance