Question

12 zen is 30 - years old and is a full - time employee at a food manufacturing factory. he is married to huan and together they have a daughter chloe. zen is currently healthy but his family has a history of heart disease. zen is the sole breadwinner and his income is essential for his family to maintain their current standard of living. zen has been contributing to his rrsp and has $15,000 in his tfsa. after analyzing his situation, zen’s agent recommends a critical illness insurance policy.
purchasing a critical illness insurance policy will help zen prevent:
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a. loss of income.
b. longevity risk.
c. unsystematic risk.
d. loss of savings.
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Explanation:

Zen is the sole breadwinner, and a critical illness could prevent him from working, leading to loss of income. Longevity risk relates to outliving savings, unsystematic risk is business - specific, and loss of savings isn't directly prevented by critical illness insurance here. So the correct option is about loss of income.

Answer:

a. loss of income