Question

When buying life insurance, Margo sought the advice of a sales agent from a

reputable life insurance company. Margo was interested in buying $100,000 of life
insurance. She is 28 years old and a single mother. She wants to spend as little as
possible on this life insurance policy and is not interested in having any type of
savings, or cash accumulation, feature with her policy. She just wants $100,000 paid
out to her named beneficiary in the event of her death. Therefore, she should take
the suggestion of the life insurance agent and purchase a whole life policy rather
than a term policy.

Answer 1

It is not necessarily true that purchasing a whole life policy is the best option for Margo in this scenario. Whole life insurance policies typically have higher premiums than term life insurance policies, and they also have a savings or cash accumulation component. Since Margo is interested in spending as little as possible on her life insurance policy and is not interested in having any type of savings or cash accumulation feature, a term life insurance policy may be a better option for her.

Step-by-step explanation: