Term life insurance is the recommended choice for an individual borrowing [tex]$10,000 for a 5-year loan, offering cost-effective coverage without cash value accumulation.
Term life insurance would be the best type of policy suited to a situation where an individual borrows $[/tex]10,000 for a 5-year loan with monthly payments. Term life insurance does not accumulate cash value but provides coverage against premature death, making it a more cost-effective option compared to whole life insurance.
With whole life insurance, the premiums are higher, and the policy accumulates cash value, which may not align with the individual's immediate need for coverage to repay the loan. Term life insurance, on the other hand, offers lower premiums, ensuring the financial protection needed during the loan term.
For this scenario, opting for a term life insurance policy would be more appropriate as it provides the necessary coverage without the additional costs associated with cash value accumulation.
https://brainly.com/question/1400638