26. If each of the following persons had the same amount of take home pay, who would need the greatest amount of life insurance?
a.) An elderly retired man, with a wife who is also retired.
b.) A young married man without children.
c.) A young single woman with two young children. To understand this answer, you need to comprehend the nature of insurance. Insurance is coverage based on the possibility that should a disaster happen, the people who have to deal with the aftermath have some financial wherewithal to do so. Insurance is a worse-case-scenario product that determines the possibility that something will happen, be it a death or a natural disaster, assigns a cost to the possibility and offers coverage to offset financial problems that might occur as a result.
It is widely assumed that once you reach retirement, any term life insurance policies will have expired although whole life policies may still be in effect, the cash value paying for the premium after years of payment by the individual.
If you are young married man without children, you may have a policy, purchased as a term policy this is an extremely inexpensive way to get coverage and protection against income loss for your spouse based on future plans to have a family.
A single woman however might be covered but it might be her parents or some other entity concerned about the financial implications should she meet her demise earlier than expected.
d.) A young single woman without children.
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