Sarah, age 35, single, earns $90,000 annually. She has a mortgage of $400,000, student loans of $50,000, and no dependents. Her parents are financially independent. She wants to ensure her debts are paid off if she passes away prematurely. What type of life insurance would most suitably meet her current needs?

Question: Sarah, age 35, single, earns $90,000 annually. She has a mortgage of $400,000, student loans of $50,000, and no dependents. Her parents are financially independent. She wants to ensure her debts are paid off if she passes away prematurely. What type of life insurance would most suitably meet her current needs?

Answer options: ✅ A. A 20-year term life insurance policy for $450,000.

• B. A whole life insurance policy for $450,000.
• C. A universal life insurance policy for $1,000,000.
• D. A 10-year term life insurance policy for $200,000.

Correct answer: A. A 20-year term life insurance policy for $450,000.

Explanation: Sarah's primary need is to cover specific, time-bound debts (mortgage and student loans). Term insurance is ideal for temporary needs due to its lower cost compared to permanent options, and a 20-year term aligns with a typical mortgage amortization period, providing sufficient coverage for her $450,000 debt.