West Virginia State Life Insurance Practice Exam

Which of the following is NOT a reason for purchasing life insurance on a minor?

1. To provide a death benefit in case of the parents' death

2. To ensure funds for the minor's future education

3. To cover funeral expenses

4. To provide death benefits to the child if both parents die

The correct answer is: To provide death benefits to the child if both parents die

Purchasing life insurance on a minor is typically motivated by various reasons, but the choice that is NOT a common reason is providing death benefits to the child if both parents die. Life insurance for minors is often seen as a means of financial protection for families, focusing on immediate expenses or future needs. For instance, obtaining a policy to provide a death benefit in case of the parents' death ensures that the family has financial resources to manage ongoing living expenses without the primary earners. Ensuring funds for the minor's future education is also a valid reason, as it helps to secure educational expenses that the child might need if the parents were to pass away. Covering funeral expenses is another practical reason, as it alleviates the financial burden associated with the untimely death of a child. However, the notion of providing death benefits directly to a child upon the death of both parents is less relevant. In such a scenario, the focus is often more on how to support the child's ongoing needs and guardianship rather than overweighting benefits to the minor themselves. The child does not have financial responsibilities in the same sense an adult does; hence, policies are usually targeted toward supporting those left behind rather than the child directly receiving the death benefit.