Which of the following is the best reason to purchase life insurance?
Asked by: Eleazar Koelpin | Last update: August 28, 2025Score: 4.2/5 (27 votes)
Which of the following is the best reason to buy life insurance?
According to a recent NerdWallet study, the most common reason Americans buy life insurance is to cover final expenses. The second most commonly selected reason is to leave an inheritance, followed by covering large debts, replacing an income and building an investment.
Which of the following is the best reason to purchase life insurance rather than annuities?
Life insurance is better for leaving an inheritance, while annuities have more investment and income guarantees.
What is the main reason for buying life insurance?
Why is life insurance important? Buying life insurance protects your spouse and children from the potentially devastating financial losses that could result if something happened to you. It provides financial security, helps to pay off debts, helps to pay living expenses, and helps to pay any medical or final expenses.
Which of the following are reasons one may purchase life insurance?
- Pay off an individual's last debts such as medical bills and funeral expenses.
- Meet estate taxes and other expenses in settling an estate.
- Provide life income for the spouse.
- Pay off a mortgage.
- Pay for the children's education.
- Provide funds for retirement.
I was wrong about Whole Life Insurance...
What is the main purpose of life insurance?
In exchange for a premium, the life insurance company agrees to pay a sum of money to one or more named beneficiaries upon the death of the policyholder. The purpose of life insurance is to help provide financial security to your loved ones upon your death. However, some life policies also offer living benefits.
Which of the following statements describes one of the reasons individuals purchase life insurance?
Final answer: Individuals purchase life insurance because it provides income that an insured cannot outlive, giving financial security to their family. Option A is correct.
What is the main purpose of life insurance Quizlet?
The primary purpose of life insurance is to protect family members of the insured from financial loss in the event of his or her untimely death.
When should you buy life insurance?
As we age, we're at increased risk of developing health conditions, which can result in higher mortality rates and higher life insurance rates. You'll typically pay less for life insurance at age 25 than at age 40. Waiting until age 60 may mean an even bigger rate increase and limited policy options.
Why should you purchase insurance?
Insurance is a financial safety net, helping you and your loved ones recover after something bad happens — such as a fire, theft, lawsuit or car accident. When you purchase insurance, you'll receive an insurance policy, which is a legal contract between you and your insurance provider.
Which of the following is the best reason to purchase life insurance rather than an annuity Quizlet?
Which of the following is the best reason to purchase life insurance rather than annuities? To create an estate - With insurance, the death benefit creates an immediate estate should the insured die.
What is the biggest advantage of term life insurance?
Term Life Insurance Pros: It's customizable, specific to your timeline, and usually costs less than whole life insurance. Term Life insurance Cons: If you outlive the term length, your coverage will end and you won't receive any benefits.
How much does a $50,000 annuity pay per month?
For a $50,000 immediate annuity (where you start getting payments immediately), you're looking at around $300 to $320 per month if you're about 65 years old.
Which of the following is the best reason to purchase a life insurance rather than annuities?
Explanation: The best reason to purchase life insurance rather than an annuity is to provide financial protection and support for one's family or dependents in case of the policyholder's death. Life insurance provides a lump sum payment, known as the death benefit, to the beneficiary upon the death of the policyholder.
Who is life insurance best suited for?
Life insurance is an important source of protection for parents and consumers who have financial dependents. You can choose between term insurance, which covers you for a certain number of years, and permanent policies that protect you throughout your lifetime.
Which of the following is a benefit of whole life insurance?
Whole life insurance is designed to last your entire life. It will never expire as long as you continue to pay premiums, which will never change. In addition to a guaranteed death benefit for your beneficiaries, it can help allow you to build cash value, which accrues interest over time.
Why do people buy life insurance?
Life insurance is there to help your loved ones with financial needs if you aren't there anymore. Consider your mortgage and other debts, how much income would need to be replaced, money to cover a funeral, and college for the kids.
What is the best time to buy insurance?
2. The best time to buy car insurance quotes is 20 to 27 days before you need the policy to start. Your renewal notice from your insurer will show the new price for next year (and the price you paid last year). It's typically sent around 28 days before your current policy ends.
Which of the following is an advantage of term life insurance?
Final answer: The primary advantage of term life insurance is that it protects individuals during their highest financial needs, offering affordable coverage for risk management.
What is the primary purpose of the life insurance?
The primary purpose of life insurance is to provide a financial benefit to dependents upon premature death of an insured person. The policy pays a specified amount called a “death benefit” to the named beneficiary, when the insured dies.
Which person should most consider purchasing life insurance?
- Life insurance can provide financial security for loved ones, covering expenses like daily living, education and debts.
- Parents, small business owners, retirees and those with dependents could benefit significantly from life insurance policies.
What is the main purposes of insurance?
Purpose of insurance
Its aim is to reduce financial uncertainty and make accidental loss manageable. It does this substituting payment of a small, known fee—an insurance premium—to a professional insurer in exchange for the assumption of the risk a large loss, and a promise to pay in the event of such a loss.
How much do I have to pay for Medicare when I turn 65?
If you don't get premium-free Part A, you pay up to $518 each month. If you don't buy Part A when you're first eligible for Medicare (usually when you turn 65), you might pay a penalty. Most people pay the standard Part B monthly premium amount ($185 in 2025).
What is considered to be the primary reason for buying life insurance Quizlet?
the primary reason for purchasing life insurance is to provide death benefits.
What is it called when insurance pays you?
Insurance proceeds are benefit proceeds paid out by any insurance policy as a result of a claim. Insurance proceeds are paid out once a claim has been verified, and they financially indemnify the insured for a loss that is covered under the policy.