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:

Expected Value

A calculated average outcome of a random variable, taking into account all possible values and their probabilities.

Sample Information

Data or observations collected from a subset of a larger population, used to estimate or infer characteristics about the whole population.

EMV

Expected Monetary Value; a financial concept that calculates the average outcome when the future includes scenarios that may or may not happen.

Decision Tree

A graphical representation used to visualize the path of decisions and their possible consequences, including outcomes, resources, cost, and utility.