Q would like to purchase $100,000 of permanent protection on his wife and $50,000 of Term coverage on himself under the same policy. What kind of policy should Q purchase?

 Options:

Joint Policy Joint survivor policy Whole life policy with other insured rider Whole life policy with a Guaranteed Insurability option

The Correct Answer Is:

c. Whole life policy with other insured rider

Explanation of the Correct Answer: c. Whole life policy with other insured rider

Q’s need is to secure $100,000 of permanent protection for his wife and $50,000 of term coverage for himself under a single policy. Among the options presented, the most suitable choice is a “Whole life policy with other insured rider.”

This selection aligns perfectly with Q’s requirements by providing a whole life policy, ensuring permanent protection for his wife, and incorporating an “other insured rider” to add term coverage for himself.

The “other insured rider” allows for separate coverage within the same policy, ensuring both individuals are covered with distinct coverage types and amounts.

Explanation of Why Other Answers Are Incorrect:

a. Joint Policy:

A joint policy typically covers two individuals under one policy. However, it commonly offers the same type and amount of coverage for both parties.

In Q’s case, where he desires $100,000 of permanent protection for his wife and $50,000 of term coverage for himself, a joint policy fails to cater to these differing coverage needs.

Joint policies often lack flexibility in adjusting coverage amounts or types for each individual separately, making it unsuitable for Q’s specific requirement of distinct coverage.

b. Joint Survivor Policy:

Similar to a joint policy, a joint survivor policy focuses on covering two individuals but pays out the benefit upon the death of the second insured.

Q’s need involves different coverage types and amounts for himself and his wife during their lifetimes, not necessarily upon the death of the second insured.

This policy type doesn’t allow for customization of coverage amounts and types for both Q and his wife while they are alive, thus not meeting Q’s immediate requirement.

d. Whole Life Policy with a Guaranteed Insurability Option:

A whole life policy assures permanent protection, but the Guaranteed Insurability Option doesn’t inherently address Q’s need for varied coverage amounts and types for himself and his wife under the same policy.

While it allows for increasing coverage without a medical exam, it doesn’t accommodate the distinct requirements Q has for permanent protection for his wife and term coverage for himself within a single policy.

By contrast, the “Whole life policy with other insured rider” option offers the necessary flexibility and customization for Q’s situation. It allows for the inclusion of two different coverage types and amounts under one policy, ensuring both Q and his wife receive the specific coverage they require during their lifetimes.

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