Colorado Life Producer License Practice Test

What insurance policy is recommended in the event of one or more parents dying prematurely to provide for the needs of children?

1. Term insurance

2. Whole life insurance

3. Survivor protection

4. Universal life insurance

The correct answer is: Survivor protection

In the context of ensuring financial security for children in the unfortunate event of one or more parents dying prematurely, the recommended policy is specifically survivor protection. This type of coverage focuses on providing financial support for dependents, particularly children, who would be left in a vulnerable position without a primary income source. Survivor protection plans are designed to meet the needs of surviving family members by offering death benefits that can be used for essential expenses like education, housing, and daily living costs. This targeted approach is critical for ensuring children have the necessary resources to maintain their quality of life. While other types of insurance, such as term, whole life, and universal life, can provide death benefits, they do not fully encapsulate the specific aim of providing direct support for children's needs in the aftermath of a parent's death. Thus, survivor protection is tailored specifically to the scenario of protecting young dependents, making it the most suitable choice in this context.