{"id":169293,"date":"2024-11-19T06:52:38","date_gmt":"2024-11-19T06:52:38","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=169293"},"modified":"2024-11-19T06:52:40","modified_gmt":"2024-11-19T06:52:40","slug":"p-is-looking-to-purchase-a-life-insurance-policy-that-will-pay-a-stated-monthly-income-to-his-beneficiaries-for-20-years-after-he-dies-and-a-lump-sum-of-20000-at-the-end-of-that-20-year-period","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2024\/11\/19\/p-is-looking-to-purchase-a-life-insurance-policy-that-will-pay-a-stated-monthly-income-to-his-beneficiaries-for-20-years-after-he-dies-and-a-lump-sum-of-20000-at-the-end-of-that-20-year-period\/","title":{"rendered":"P is looking to purchase a life insurance policy that will pay a stated monthly income to his beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end of that 20-year period."},"content":{"rendered":"\n

P is looking to purchase a life insurance policy that will pay a stated monthly income to his beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end of that 20-year period. What type of policy should P Purchase? a) Whole Life Insurance b) Term Life Insurance c) Universal Life Insurance d) Annuity<\/p>\n\n\n\n

The Correct Answer and Explanation is:<\/mark><\/strong><\/p>\n\n\n\n

Correct Answer: d) Annuity<\/strong><\/h3>\n\n\n\n

Explanation:<\/h3>\n\n\n\n

The type of policy P needs is an annuity<\/strong> because it aligns with his objective of providing a regular monthly income to his beneficiaries for 20 years after his death and a lump sum payment of $20,000 at the end of the 20-year period.<\/p>\n\n\n\n

An annuity is a financial product that can be tailored to pay a stream of income for a specific time, such as 20 years in this scenario. Additionally, it can include a feature for a lump-sum payment at the end of the term. Here’s how each option compares:<\/p>\n\n\n\n

1. Whole Life Insurance<\/strong><\/h4>\n\n\n\n
    \n
  • Whole life insurance provides coverage for the insured’s entire life, combining a death benefit with a savings component that builds cash value over time. However, it typically does not offer structured payouts like monthly income or a terminal lump sum. The primary purpose is lifelong coverage, not periodic income streams.<\/li>\n<\/ul>\n\n\n\n

    2. Term Life Insurance<\/strong><\/h4>\n\n\n\n
      \n
    • Term life insurance provides coverage for a specified period and pays a single lump sum upon the insured’s death if it occurs during the term. It does not offer options for regular monthly income or a lump sum at the end of a defined period.<\/li>\n<\/ul>\n\n\n\n

      3. Universal Life Insurance<\/strong><\/h4>\n\n\n\n
        \n
      • Universal life insurance offers flexible premiums and death benefits with a cash value component. While it allows some customization, it is not inherently designed for structured payouts like regular monthly income or lump sums at the end of a fixed term.<\/li>\n<\/ul>\n\n\n\n

        4. Annuity (Correct Option)<\/strong><\/h4>\n\n\n\n
          \n
        • An annuity provides a series of payments over a defined period. A life with period certain annuity<\/strong> ensures payments to beneficiaries for 20 years, coupled with a lump-sum benefit at the end of the term. This feature aligns precisely with P\u2019s requirements, making it the appropriate choice.<\/li>\n<\/ul>\n\n\n\n

          Thus, an annuity meets P\u2019s goals of providing financial stability to his beneficiaries through income and a lump-sum payout.<\/p>\n","protected":false},"excerpt":{"rendered":"

          P is looking to purchase a life insurance policy that will pay a stated monthly income to his beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end of that 20-year period. What type of policy should P Purchase? a) Whole Life Insurance b) Term Life Insurance c) Universal […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-169293","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/169293","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=169293"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/169293\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=169293"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=169293"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=169293"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}