FINC 321 Discussion **Professor Anthony**

Michael:

It's difficult to evaluate the need for life insurance at such a young age without knowing anything about Mary's financial situation or reasons. Does Mary have a mortgage or student loans that will need to get paid in the event of her death? If so then a term life insurance policy may be a better option at the present time to alleviate any burden her husband might incur if she dies. The problem with whole life insurance is that to receive the maximum benefit you have to die. If Mary were to invest in assets or sell her capital then she may be able to build up enough wealth to mitigate the need for life insurance and have an asset that is constantly generating income for her and her family regardless of whether she is dead or not.

Tyrone:

David and Mary should both consider their options. As stated above, David already has group life insurance. Since Mary does not they should get her a whole life insurance policy, that she is able to afford. Whole life insurance policies whole life insurance policies cost less to start the younger you are, so she needs to find out what the rates are currently, and what she can comfortably afford. $1670 annually is about one in $137.17 a month. If she can afford that for a $350,000 whole life policy, she should do it. The longer she waits the more she will pay for the policy in the later years. I recommend that David get a whole life insurance policy also, while he is still young, and it is still relatively inexpensive for him. They should also take one out on their child, as a savings plan to help it in the future.