Question

Most family heads need substantial amounts of life insurance. however, with limited income, money spent on life insurance reduces the amount of discretionary income available for other high-priority needs. what an insured person gives up when he or she purchases life insurance instead of using the premium dollars for other purposes is called the

Answer 1

What an insured person gives up when he or she purchases life insurance instead of using the premium dollars for other purposes is called the opportunity cost of buying life insurance. Opportunity cost is defined as the cost incurred by choosing one option over an alternative one that may be equally desired.