Which of the following represents a disadvantage of a whole life insurance policy?
A) It is difficult to evaluate the true cost of a whole life insurance policy at the time of purchase.
B) A whole life insurance policy provides only temporary coverage for a set period.
C) A whole life insurance policy may require a policyholder to pay higher premiums when the policy is renewed.
D) A whole life insurance policy often provides lower yields than other investment vehicles.
E) A whole life insurance policy does not provide any tax advantages on accumulated earnings.

Question

Quizplus · Accepted Answer

Whole life insurance policies often have lower yields than other investment vehicles because a portion of the premiums goes towards paying for insurance costs and fees. The returns generated by the investment component of the policy may not be as high as those from other investment options, such as mutual funds or stocks.

Which of the Following Represents a Disadvantage of a Whole