Difference between whole life policy-variable life policy

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Ava Wong, a 38 year-old widowed mother of three children (ages 12, 10, and 4), works as a product analyst for a major consumer products company. Although she's covered by a group life insurance policy at work, she feels, based on some rough calculations, that she needs additional protection. Owen Thompson, an insurance agent from Insurance Strategies, has been trying to persuade Ava to buy a $150,000, 25-year, limited payment whole life policy. However, Ava favors a variable life policy. To further complicate matters, Ava's father feels that term life insurance is more suitable to the needs of her young family. a. Explain to Ava the difference between (i) a whole life policy, (ii) a variable life policy, and (iii) a term life policy. b. What are the major advantages and disadvantages of each type of policy? c. In what way is a whole life policy superior to either a variable life or term life policy? In what way is a variable life policy superior? How about term life insurance? d. Given the limited information in the case, which type of policy would you recommend for Ava? Defend and Explain your recommendations.

Reference no: EM131324447

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