Question

35 esther has been a pediatrician at a children’s hospital for the past several years. she lives with her spouse and they do not have any children. her spouse is a professor and they have saved sufficient for retirement to maintain their current lifestyle for life. esther wishes to borrow $200,000 to the children’s hospital. upon her death, however, she does not want to be spending too much on premiums. which of the following is a suitable life insurance option for esther that is least expensive?
a. indexed death benefit, adjustable premium rates

b. level death benefit, level cost of insurance

c. level death benefit plus cumulative premiums, yearly renewable term insurance

d. indexed death benefit plus account value, level cost of insurance

Explanation:

To determine the least expensive life insurance for Esther, we analyze each option:

• Option a (Indexed death benefit, adjustable premium rates): Adjustable premiums can increase over time, so not least expensive.
• Option b (Level death benefit, level cost of insurance): Level cost means premiums stay stable, but "yearly renewable term" (implied in some options) is cheaper initially. Wait, the correct least - cost option for a fixed - term or life - long coverage with lower premiums (since she wants to spend less on premiums) is yearly renewable term insurance (though labeled as "Level death benefit, yearly renewable term insurance" in the options? Wait, re - reading: the option with "yearly renewable term insurance" has level death benefit? No, yearly renewable term insurance (YRT) has increasing premiums but initially low cost. But the option that is least expensive (since she wants to spend less on premiums, and YRT has low initial premiums, though premiums increase yearly). But among the options, the one with "yearly renewable term insurance" (option with level death benefit and yearly renewable term) is the least expensive because YRT has lower premiums in the early years (and she might be looking for lower premium outlay now, as she doesn't want to spend too much on premiums). Wait, the key is: Yearly renewable term insurance has the lowest initial premium (though premiums increase each year), making it the least expensive option for someone wanting to minimize premium spending (especially if they don't need the insurance for a long - term fixed cost, but just to maintain coverage at lower cost now). So the correct option is the one with "yearly renewable term insurance" (assuming the option is labeled as having level death benefit and yearly renewable term, or the option that is yearly renewable term).

Answer:

The option with "yearly renewable term insurance" (e.g., if the option is labeled as having level death benefit and yearly renewable term, that is the answer. Based on the problem's context, the least expensive option for Esther (who wants to spend less on premiums) is yearly renewable term insurance, so the answer is the option corresponding to yearly renewable term insurance (e.g., if the options are as per the text, the correct option is the one with "yearly renewable term insurance" in its description).