Which of the Following Represents a Disadvantage of a Whole

question 80

Multiple Choice

Which of the following represents a disadvantage of a whole life insurance policy?

• A) It is difficult to evaluate the true cost of a whole life insurance policy at the time of purchase.
• B) A whole life insurance policy provides only temporary coverage for a set period.
• C) A whole life insurance policy may require a policyholder to pay higher premiums when the policy is renewed.
• D) A whole life insurance policy often provides lower yields than other investment vehicles.
• E) A whole life insurance policy does not provide any tax advantages on accumulated earnings.

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Definitions:

Machine-Hours

An indicator of the amount of work produced or activity level, determined by how many hours equipment is running.

Plantwide Predetermined Overhead Rate

A single overhead rate calculated by dividing total estimated manufacturing overhead costs by an estimated allocation base for the entire factory, often used in simpler costing systems.

Job-Order Costing System

An accounting system that assigns costs to specific jobs or batches of goods, typically used in manufacturing or service industries where each job is unique.

Direct Labor-Hours

A measurement of the time workers spend directly manufacturing a product, often used to allocate manufacturing overhead.