Question

Sean wants to buy a personal insurance policy that will pay monthly benefits to his son after Sean dies. He pays $500

monthly over the next 10 years to the insurer.
What type of insurance should he buy?

A annuity
B premium
C dividends
D liability

Answer 1

A. annuity

Explanation:

I know it is a little late for this answer, but I thought I would add it for anyone else who is struggling :) I know it is annuity because I literally just took the test and got it right.

Answer 2

B.

Explanation:

Premium insurance is an insurance amount paid to the insurer periodically. In this type of insurance, the insurer is required to provide coverage. This insurance policy covers healthcare, life, auto, home, etc. In this insurance, one is required to pay a certain amount of money on monthly, quarterly, or annually basis.

In the given scenario, Sean should buy premium insurance as it covers life and healthcare insurance as well. He can pay $500 on monthly basis to the insurance company. And after Sean's death, his son can claim the amount.

So, the correct answer is option B.