Question

DeShawn is 38 years old and is married with 3 children, ages 2, 4, and 6. He makes $45,000 a year and is planning to retire when he turns 60. From the following three options, DeShawn decides to buy the $900,000 20 year term policy. Given DeShawn’s scenario, assess whether DeShawn made a wise decision.a. DeShawn would be safer buying whole life policy.b. DeShawn would have more money in the long run if he invested in the 20-year endowment.c. DeShawn’s current policy will cover his family for an adequate period of time at his current salary.d. DeShawn’s current policy has too high of a face value and does not cover his family long enough.

Answer 1

B

Explanation:

Answer 2

Answer:B

Explanation:

DeShawn would have more money in the long run if he invested in the 20-year endowment

DeShawn already makes $45,000 yearly, which makes him rich enough to purchase the 20 year endowment plans, the 20 year life plan won't be wise, because it last for 20 years, and this will end before he retires, 38 + 20 = 58 and once it ends, no payment will be made if he's still alive, so what if something happens to him in the 2 years inbetween the end of the 20 year term plan and his retirement? That's where the plan doesn't favor him and his family, but the 20 year endowment plan once it's finished, he will be paid the sum assured to him, plus bonuses, and his family will be covered if something happens to him in the 2 years inbetween the end of the 20 year endowment plan and his retirement