Bea is a married 65-year-old woman applying for a life insurance policy. She meets with Stanley, her insurance agent, to review her insurance needs. Stanley inquires if Bea has started receiving Old Age Security (OAS) and Canada Pension Plan (CPP) benefits.
Why is it important for Stanley to know this?
A . These funds are taxable and may increase her need for life insurance.
B . Her life insurance needs may decrease if she is retired.
C . Her spouse may be eligible for survivor benefits upon her death.
D . To calculate her retirement income.
Answer: B
Explanation:
Knowing whether Bea is receiving OAS and CPP benefits helps Stanley assess her life insurance needs, which may decrease upon retirement as there may be less need to replace income. As Bea is no longer dependent on employment income, her insurance needs could reduce if she relies on stable retirement income sources like OAS and CPP. Therefore, Option B reflects why this information is relevant in the context of life insurance planning.
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