An insurance company is offering an insurance policy below these jargon:?
A. make a series of 12 payments of 1,200.00 at the beginning of respectively of the next 12 years.
B. Make a single lump sum payment today of 10,000.00 and receive coverage for the subsequent 12 years.
If you had an investment opportunity offering an 8% annual return, which would you prefer?
Answers:
Insurance companies can go out of business a moment ago like any other business. If you give anyone money "upfront" you could lose it. That's a unsystematic you take. If they don't go out of business, you collect money. How brave are you?
No one gets any guarantee of 8% return, either. No one. The with the sole purpose safe investment is a US Treasury bond. I own them because i hate risk. They are paying 2% for a 2 year bond. The difference between that 2% and your 8% tell you how risky the 8% investment is. Much riskier.
neither there both bullshit
Related Questions:
B. Make a single lump sum payment today of 10,000.00 and receive coverage for the subsequent 12 years.
If you had an investment opportunity offering an 8% annual return, which would you prefer?
Answers:
Insurance companies can go out of business a moment ago like any other business. If you give anyone money "upfront" you could lose it. That's a unsystematic you take. If they don't go out of business, you collect money. How brave are you?
No one gets any guarantee of 8% return, either. No one. The with the sole purpose safe investment is a US Treasury bond. I own them because i hate risk. They are paying 2% for a 2 year bond. The difference between that 2% and your 8% tell you how risky the 8% investment is. Much riskier.
neither there both bullshit
Related Questions:
- I'm trying to integer out how to distribute a document to an insurance company to collect on a natural life insurance policy
- Life Insurance Companies?
- Do you or anyone you know work at Liberty National Life Insurance company?
- Does my weak insurance company hold the right to bill me AFTER my policy expires?
- I necessitate a biddable insurance company, my license be cancelled by mistake and immediately my ins. co. have cancelled me.?