Looking for the answer to the question below related to  Management ?

Which of these needs is satisfied by Adjustable Life Insurance?

 Options:

a) insured’s need for level premiums b) insured’s need for flexible premiums c) insured’s need for flexible non forfeiture options d) insured’s need for level death benefits

The Correct Answer Is:

• b) insured’s need for flexible premiums

Adjustable Life Insurance is a type of life insurance policy that provides a certain degree of flexibility to policyholders. In the context of the options provided, the correct answer is (b) insured’s need for flexible premiums.

Let’s delve into why this is the correct answer and then examine why the other options are not correct in detail.

(b) Insured’s need for flexible premiums:

➦ Adjustable Life Insurance allows policyholders to have control over the amount they pay as premiums. This flexibility is beneficial because it caters to the changing financial circumstances of the insured.

➦ For instance, if the insured’s financial situation improves, they can increase their premium payments to accumulate cash value more quickly or to ensure a higher death benefit for their beneficiaries.

➦ Conversely, if they face financial constraints, they can reduce their premium payments or even use the policy’s cash value to cover the premiums for a certain period.

➦ This adaptability makes Adjustable Life Insurance a suitable choice for individuals who want life insurance coverage but need the freedom to adjust their premium payments according to their financial capacity.

Now, let’s discuss why the other options are not correct:

(a) Insured’s need for level premiums:

➦ Adjustable Life Insurance does not primarily satisfy the insured’s need for level premiums.

➦ Level premiums are typically associated with whole life insurance policies, where the premium remains constant throughout the life of the policy.

➦ In Adjustable Life Insurance, premiums can be adjusted by the policyholder, which means they can increase or decrease over time, making this option incorrect.

(c) Insured’s need for flexible non-forfeiture options:

➦ Non-forfeiture options are provisions in life insurance policies that allow policyholders to receive a reduced paid-up policy or extended-term insurance if they stop paying premiums.

➦ While Adjustable Life Insurance does offer some non-forfeiture options, such as using the policy’s cash value to cover premiums temporarily, this is not its primary focus.

➦ The primary feature of Adjustable Life Insurance is the flexibility in premium payments, not the non-forfeiture options. Therefore, this option is not the correct one.

(d) Insured’s need for level death benefits:

➦ Adjustable Life Insurance is designed to provide flexibility not only in premium payments but also in death benefits.

➦ Policyholders can choose to adjust the death benefit amount based on their needs.

➦ They can increase the death benefit to provide more financial protection for their beneficiaries or decrease it if they require less coverage.

➦ Therefore, Adjustable Life Insurance does not primarily satisfy the insured’s need for level death benefits, as the policyholder can adjust the death benefit amount. This option is not the correct answer.

In summary, Adjustable Life Insurance is best suited to address the insured’s need for flexible premiums, as it allows policyholders to adapt their premium payments to their changing financial circumstances.

It is essential to understand the specific features and benefits of different life insurance policies to choose the one that aligns with your financial goals and requirements.

References:

• You should check your windshield wiper fluid level ___________.