Chapter 12 Discussion Activity

Question

1. Are You Insured? Are you covered by life insurance? If so, how much? Given what you have read, do you feel that you ate over or under insured?

 

1. Term Versus Cash Value Insurance. Why do you think people persist in buying cash value life insurance when, in most cases, they would be better off buying term insurance and investing the money saved into a retirement account?

Answer 1

Are You Insured? Are you covered by life insurance? If so, how much? Given what you have read, do you feel that you ate over or under insured?

ANSWER: Answers will vary for this question as it pertains to you personally.

Term Versus Cash Value Insurance. Why do you think people persist in buying cash value life insurance when, in most cases, they would be better off buying term insurance and investing the money saved into a retirement account?

ANSWER: Most individuals prefer the notion that their life insurance is building a 'cash value' that can be borrowed or used, if needed. Money held in a retirement account cannot be accessed until a person reaches the age of 59 1/2, without penalty. Individuals may not have experience investing in a retirement account, therefore the mention of a life insurance that builds cash value sounds like a much easier alternative to investing, reviewing a prospectus, or selecting stocks, bonds, or other types of investments.