One Disadvantage of Term Life Insurance Is That

question 6

Multiple Choice

One disadvantage of term life insurance is that

• A) when renewed it usually is at a higher premium.
• B) the risk of lost income from the death of the insured is shifted to the insurance company.
• C) it is pure insurance protection for a given time period.
• D) it is generally not available to young people.

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Definitions:

Debt to Equity

A financial metric showing the comparative amount of debt and shareholders' equity utilized to fund a company's assets.

Price/Earnings

A valuation ratio of a company's current share price compared to its per-share earnings, used to assess if a stock is over or undervalued.

Ratio Analysis

A technique of analyzing the strength of a company by forming (financial) ratios out of sets of numbers from the financial statements. Ratios are compared with the competition, recent history, and the firm’s plan to assess the quality of its performance.

Stable Company

Refers to a firm with consistent performance, low volatility in its stock price, and predictable financial returns, making it a less risky investment.