Running Head: BUSINESS MANAGEMENT
Risk management and Insurance
1. Whys is term life insurance cheaper than whole or universal life Insurance?
Term life insurance has one particular purpose that it brings forth to its consumers; it gives
insurance cover for the family alone, no investment incentives attached to it, this makes it much
cheaper when compared to whole or universal life insurance covers. The cost therefore for term
insurance is cheap as compared to whole life insurance making it a sure bet for family protection
even for low income earners.
2. What is the basic difference between whole and term life insurance?
As earlier mentioned, whole life is quite expensive given the investment feature attached to it,
unlike term insurance which is basically coverage for family members in case of untimely and
premature deaths of the sole bread winner.
3. In the needs approach to determining how much life insurance to buy, name the needs.
The needs are essential in determining the rate of premium pay, in most cases the needs that are
considered before purchase of life insurance include; the funeral expenses, mortgage expenses,
loan expenses and children expenses.
4. If I make incorrect statements on my life insurance applications that are not determined
until 2.5 years later, what happens? Why?
Statements do not play a significant role in defining the termination of a contract, not unles...