Discussion 5.2 Life Insurance and Disability

 Term life insurance provides pure death protection and is relatively inexpensive to purchase.  The prime factors that determine the premium paid relate to health conditions.  Perform the following research and answer the corresponding questions.  (A 1½-page response is required.)

1. Go to the Web site www.intelliquote.com and secure a term quote for $250,000 of level 10-year term insurance.  First, request the quote as a  non-smoker. Then go back and re-enter the information as a smoker of one pack of cigarettes per day. What was the premium amount quoted in each case? Why would there be such a  difference in the premiums quoted?  
    
2. Discuss the advantage of purchasing level term insurance rather than an annual renewable term. When would the purchase of whole life insurance be a better buying decision than term insurance?  
    
3. An important question to be asked is, “How much life insurance do I need?” To answer this question, go to the following Web page.  What are the rules of thumb in determining the amount of coverage needed?  Using the calculator provided, how much insurance coverage should you have?  (9      points)

http://www.intelliquote.com/resources/life/how-much-life-insurance-do-i-need.asp