Question

Marsha, age 35 is a single mother of one daughter, skyler, age 9. marsha is a secretary with annual income of $35,000 and a negative net worth. Marsha has two objectives (1) to protect skyler in the event of her untimely death and (2) to save for her own retirement. Which of the following life insurance policies should she buy?

A. A 20-year term insurance policy
B. An ordinary whole life insurance policy
C. A variable universale policy
D. A universal policy

Answer 1

The correct answer is A 20-year term insurance policy

Step-by-step explanation:

Marsha, the single mother of one daughter, should consider buying a 20-year term insurance policy to protect her daughter's future and save for her own retirement. Term insurance policies provide coverage for a specific period of time and offer a death benefit if the insured person passes away during the term. In Marsha's case, a 20-year term policy would provide coverage until her daughter reaches adulthood, ensuring financial security for Skyler in the event of Marsha's untimely death.

Term insurance is generally more affordable than other types of life insurance policies, such as whole life or universal life. This affordability makes it a viable option for Marsha, who may have a limited budget as a single mother earning $35,000 annually. Whole life and universal life policies can be more expensive because they provide coverage for the insured person's entire life and typically include a savings or investment component.

By choosing a 20-year term insurance policy, Marsha can protect Skyler while also saving for her own retirement. It's important for Marsha to consult with a financial advisor or insurance professional to assess her specific needs, consider any existing debts or financial obligations, and determine the appropriate coverage amount for her policy.