Which of the Following Is a Significant Disadvantage of a Cash-Value

question 64

Multiple Choice

Which of the following is a significant disadvantage of a cash-value policy?

• A) Provides the ability to leave a sum of money to a charity or family members on a tax-free basis.
• B) Preserves insurability.
• C) Provides estate liquidity.
• D) Costs more than term policies.

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Definitions:

Long-Range Investment

Involves assets or securities purchased with the intention of holding them for an extended period, typically exceeding one year, aiming for long-term appreciation and income generation.

Payback Period

The time required for the return on an investment to repay the sum of the original investment.

Cash Inflows

The total amount of money being transferred into a business, usually from its operations, investments, or financing.

Capital Outlay

Expenditures for acquiring or upgrading physical assets such as equipment or property.