Dianna is visiting with Karen, her Financial Planner, and is excited to report that she...

Karen's recommendation should match the insurance product to the liability. Dianna's need is temporary: a 20-year mortgage balance that would create financial hardship if she died before the debt was retired. Term life insurance is designed for temporary capital needs and normally provides the largest amount of death benefit for the lowest initial premium because it contains no cash-value savings component. Whole life can be appropriate for permanent estate liquidity, final taxes, charitable objectives, or lifetime dependency needs, but those facts are not present. Option A may be true as a general underwriting concern, but it does not explain why term is better for this mortgage need. Option B is false because term insurance does not build cash value. Option C describes permanent needs, not a 20-year mortgage. The AFP planning conclusion is that term coverage should be considered where the risk period and capital need are limited. Study Guide focus: needs-based insurance analysis, term versus permanent insurance, mortgage protection, and product suitability.

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