Question

Life insurance policies have nontax factors that limit their desirability as an investment vehicle. Some of these factors include:

A. waiting for the insured individual's death
B. low expense to return ratios
C. high commission costs
D. waiting for the insured individual's death and low expense to return ratios
E. waiting for the insured individual's death and high commission costs

Answer 1

Nontax factors that limit the desirability of life insurance policies as an investment vehicle include waiting for the insured individual's death, high commission costs, and low expense to return ratios.

Step-by-step explanation:

Nontax factors that limit the desirability of life insurance policies as an investment vehicle include:

1. Waiting for the insured individual's death: Life insurance policies provide a death benefit, which means the payout is only received upon the death of the insured individual. Therefore, investors may have to wait a long time before receiving a return on their investment.
2. High commission costs: Life insurance policies often come with high commission costs, which reduce the overall returns for the investor.
3. Low expense to return ratios: Some life insurance policies may have low expense to return ratios, meaning that the costs associated with the policy outweigh the potential returns.