Question: Case Facts: Amy and John have recently decided to buy life insurance because
(1) as first-time homeowners, they are concerned about Amy's ability to make mortgage payments, based only on her income, if John dies;
(2) they plan to have children soon and ultimately to put them through college; and
(3) they would like to provide an inheritance for their children. They are also concerned about the potential effects of future inflation.
After considering their options, Amy and John decide to buy participating life insurance policies that cover both their lives. The insurance application requires them to select a dividend option and gives them the opportunity to select three optional riders.
Case Analysis: 1. Describe the factors Amy and John should consider when selecting a dividend option.
2. Describe the factors Amy and John should consider when evaluating each of the following optional riders
- Accidental death benefits
- Guaranteed purchase option
- Waiver-of-premium rider