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A business will typically use which type of life insurance to cover their employees?

A) Term life insurance
B) Whole life insurance
C) Universal life insurance
D) Variable life insurance

1 Answer

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Final answer:

Businesses commonly use term life insurance to provide death benefit coverage for their employees during their period of employment without accumulating any cash value, making it a cost-effective choice.

Step-by-step explanation:

A business will typically use term life insurance to cover their employees. Term life insurance is preferred by many businesses because it provides a death benefit for a specified period, which aligns with the time an employee is expected to work for the company. Unlike cash-value (whole) life insurance, term life insurance does not accumulate cash value, which makes it a more cost-effective option for providing employee benefits.

Employment-based insurance, such as this, is often part of what employers offer and can sometimes extend to family coverage.

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