Attempis

Choosing policies based on circumstances

Which insurance policy is best?

Paolo and Sharon are a married couple in their mid$-$thirties who are planning to start a family. Sharon works as a real estate agent and earns

$$250,000$ a year, and Paolo works as a dental assistant earning $$40,000$ a year. They would like to have two children and are looking to take out a life

insurance policy that will provide lifelong coverage in the event of Sharon's death. Given her established career, they do not expect much volatility in

their future financial situation and prefer a plan that offers consistent premiums over a lifetime rather than one that offers more flexibility without the

guarantee of future affordability.

Because it offers fixed future premiums, the best option for Sharon is a

life insurance policy.

Suppose, instead, Sharon is uncertain as to whether she will want to continue working once she has children, and Paolo is considering going back to

school to become a pharmacy technician.

They still want a plan that serves as a savings vehicle, but given the uncertainty of their future finances, they might be better off choosing a

life insurance.