Most Family Heads Need Substantial Amounts of Life Insurance

question 54

Multiple Choice

Most family heads need substantial amounts of life insurance.However,with limited income,money spent on life insurance reduces the amount of discretionary income available for other high-priority needs.What an insured person gives up when he or she purchases life insurance instead of using the premium dollars for other purposes is called the

• A)estimated cost of life insurance.
• B)net cost of life insurance.
• C)real (inflation-adjusted)cost of life insurance.
• D)opportunity cost of buying life insurance.

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Definitions:

Value Analysis

A systematic approach to assess the function of goods or services with the goal of reducing cost while maintaining or improving quality and performance.

Purchase Item

Refers to any good or service that is acquired by an individual or organization through buying.

Function

The specific purpose or role that an entity or a process serves within a larger system or organization.

Cost

The amount of money required to purchase something or the expense associated with creating or maintaining a service or product.