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Unformatted text preview: Daniel McAree FCE 238 Exam #3 Study Guide Know the types of Life Insurance Term life insurance – insurance for a certain period of time. “pure protection” against early death; pays benefits only if the insured dies within the time period (term) that the policy covers Permanent life insurance (cash-value insurance) – insurance plus a savings or investment component. The insurance remains in effect for the entire life of the insured person. How much life insurance do you need? D-I-M-E Compute through D-I-M-E. D…ependents and Debt I…ncome (and business reasons) M…ortgage on a house E…vents and Education What type of person would purchase each kind? Term life insurance is less expensive, while permanent life insurance is expensive and covers your whole life. Therefore, term life insurance is best for those in need of life insurance relatively quickly who do not have the funds to pay for insurance to cover their entire life. Permanent life insurance is designed for those who have the funds to pay for insurance plus the savings or investment component to have them...
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This note was uploaded on 09/19/2011 for the course HDFS 238 taught by Professor Boyce during the Fall '10 term at Michigan State University.
- Fall '10