B. Renewable term. Please know the associated risks and the applicable charges, from your insurance agent or the intermediary or policy document issued by the insurance company. For a non-Working Spouse. After you purchase a life insurance contract, you have a "free look" period that lasts A. Sum Assured fixed at Rs. 1.5 lacs under Income Tax Act, 1961 and tax benefit may vary from assessee to assessee. - Definition & Examples, Strategies for Effective Consumer Relations, Cross-Selling in Retail: Techniques & Examples, Working Scholars Bringing Tuition-Free College to the Community. Answer . Straight life. Holly and Matt want to use the "nonworking" spouse method to determine the amount of life insurance coverage they need. E. Proceeds left with the company. Polly wants the opportunity to change the amount she pays for her annual premium through the life of her insurance policy without changing her coverage. Which of the following riders should she consider? Collection of advance premium shall be allowed within the same financial year for the premium due in that financial year However, where the premium due in a financial year is being collected in previous financial year, the premium may be collected for a maximum period of three months in advance of the due date of the premium. Allison is a "nonworking" spouse who devotes all of her time to household activities. is =1.25\sigma = 1.25=1.25. . A. 96. What is Life Insurance? In other words, you will have to show why you want to insure the individual. Copyright 2023 StudeerSnel B.V., Keizersgracht 424, 1016 GC Amsterdam, KVK: 56829787, BTW: NL852321363B01, determine the minimum amount of life insurance you should carry, the easy method to determine how much life insurance you should carry. 81. D. Decreasing term. Has the option to select any Coverage Option, any Optional In-Built Cover and any Benefit Payout Option at the stage of getting added for coverage under the policy. lessons in math, English, science, history, and more. A. $86,000 C. $98,000 D. $172,000 E. $217,000. B. Multiyear level term. D. Allowed annuities to be purchased for individual retirement accounts. Most people buy life insurance to A. Which of the following statements is correct? 93. Experts are tested by Chegg as specialists in their subject area. Whole life. The Rule of 72 is a calculation that estimates the number of years it takes to double your money at a specified rate of return. Your needs will also change over time, so your life insurance needs may also change over time. It's a method that has you calculating your immediate needs upon death, adding it to the ongoing needs of surviving family members, and then subtracting your available assets. All other trademarks and copyrights are the property of their respective owners. Insurance Contract Characteristics | Traits Specific to Insurance Contracts, Future Value Formula & Examples | How to Calculate Future Value. Sell you the highest level of coverage available. But from a financial perspective, it does not have to be a crisisif you have good planning. E. No interest will accumulate for any loans related to life insurance. \textbf{(amounts in thousands)}\\ E. An insurance company will calculate the annual amounts to pay each person for an annuity. 51,84,468 which includes Guaranteed Sum Assured on Maturity, accrued Guaranteed Yearly Additions and Guaranteed Loyalty Addition. Were your family to lose that, you lose all of that labor. Using Exhibit 12-1, determine the average numbers of additional years males alive at As a member, you'll also get unlimited access to over 88,000 A. Adjustable life B. \text{Short-term investments}&&\text{7,666}\\ Its free, with no obligation. \text{Pledges receivable (net of doubtful accounts of \$280)}&&\text{5,872}\\ Of course, it would be a tragedy were something to happen to your spouse. you owe $11,000 on car loans, $2,000 in personal debt, and $3,000 in credit card age 35 may expect to live. Megan wants to purchase a life insurance policy that will allow her to invest in stock. Instruction$86,100 E. Pay taxes. B. Read this lesson to learn what methods you can use to calculate your requirements. Allowed whole life insurance policies to be sold. You pay premiums each year for the rest of your life. Which of the following policies should she buy? Tim and Allison are married and have two children, ages 4 and 7. E. A policy whose coverage stops after a period of time. Protect the people who depend on the insured from financial losses caused by his or her death. $18,000 C. $50,000 D. $130,000 E. $180,000, 84. What is the cost of living in California? For example, if your gross income is $65,000, then with the easy method, your life insurance requirement is ($65,000 0.7) 7 = $318,500. You and your spouse are in good health and have reasonably secure jobs. You estimate that funeral expenses will be $5,000. C. A life insurance policy allows an individual to receive payments from an annuity at once. DINK stands for double income, no kids. \quad\text{Deposits held in custody for others}&&\text{700}\\ Expert Answer 100% (1 rating) Step 1 Non-working spouse method: This method is form of insurance coverage that allows you to s View the full answer Previous question Next question Which of the following is NOT a type of permanent life insurance? Easy method B. Dual income, no kids method C. Formal calculation method D. Nonworking spouse method E. Family needs method, 30. \end{array} This communication strictly intended for individuals residing in the states of CA, CO, CT, DC, DE, FL, GA, IL, LA, MA, ME, NC, NH, NJ, NM, NY, OH, PA, RI, SC, TX, UT, VA. No offers may be made or accepted from any resident outside these states due to various regulations and registration requirements regarding investment products and services. The Tax Reform Act of 1986 A. E. Made all annuities tax free. B. PERSONAL FINANCE TIPS DELIVERED DIRECTLY IN YOUR INBOX, By submitting your name and email you are allowing us to store your personal data and send you emails. How much storage space is required? Besides getting money into the family, the non-working spouse holds a responsibility for everything that doesnt offer bonus, perks, and promotions. Beneficiary. E. Child. Estimate how much life insurance Tim and Allison should carry. D. Life income option. The most common settlement option for a life insurance program is the lump-sum payment. Can you get life insurance on a spouse? The premium paid in Unit linked Insurance policies are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. E. Weiss Research. Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits, 61. Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits, 63. Firstly, spouses who work part-time or who do not work have insurability interest, which should be maximized. C. You can convert your term policy to a permanent policy. E. The policy requires that you pay a specified premium each year for the rest of your life. False. C. Decreasing term. A deferred annuity allows an individual to receive payments from a life insurance policy immediately. There are many situations to consider, and the methods you just heard about may or may not fit your needs. It accumulates cash value. makes about $38,000 annually. participating policy (dividends will be used to build up the cash value of the policy). Whole life. E. Whole life insurance plans. Annuity Formula, Calculation & Examples | What is an Annuity? \textbf{Liabilities and Net Assets}\\ This gives you seven years of wages at 70%. If marriage has taken place after the policy commencement date, you can add the Spouse to your policy within one year from the date of the marriage. Net deposits returned to students totaled $10. Premium payments are fixed with a Variable Life Policy, The beneficiaries of someone who dies by suicide will never be eligible to receive any benefits from his or her life insurance policy. This method has you multiplying your annual gross income by 70% and then multiplying that by 7. Option to add Optional In-Built Covers or choose a Benefit Payout Option other than Lumpsum is not available to non-Working Spouse. 200 lessons. 700 cartons to be stored. $30,000 B. A. Incontestability clause B. Misstatement of age provision C. Naming a beneficiary D. Policy reinstatement E. The grace period, 55. Which of the following riders should he consider? Each earns $45,000 annually. Molly is thinking about buying a life insurance policy, but she is not sure about how much she will need in the next few years. Its like a teacher waved a magic wand and did the work for me. C. Pay for a vacation. D. Life income option. Money Market | Graph, Demand Curve & Model, Rate of Return Formula & Examples| How to Calculate the Rate of Return, Bank Liabilities & Assets | Overview, Differences & Examples, How to Choose a Career: Guidance Counseling, Principles of Macroeconomics: Certificate Program, Principles of Microeconomics Syllabus Resource & Lesson Plans, AEPA Economics (AZ035): Practice & Study Guide, Holt McDougal Economics - Concepts and Choices: Online Textbook Help, DSST Personal Finance: Study Guide & Test Prep, Hawaii Real Estate Salesperson Exam: Study Guide & Practice, CPA Subtest III - Financial Accounting & Reporting (FAR): Study Guide & Practice, Glencoe Earth Science: Online Textbook Help, Holt McDougal Algebra 2: Online Textbook Help, McDougal Littell Algebra 2: Online Textbook Help, Create an account to start this course today. Each plans to continue to work after the other one dies. Another name for temporary life insurance is A. It will have a lower coverage amount and a waiting period (usually 2 year). Investment Advisory Services provided by Smallwood Wealth Investment Management, LLC, an SEC registered investment advisor. D. Life income option. B. If their youngest child is 5 years old, how much do they need? The first is the easy method. This is a method that has you multiplying your annual gross income by 70% and then multiplying that by 7. Tim and Allison are married and have two children, ages 3 and 6. 67. Mildred was diagnosed with terminal cancer and knows that she doesnt have long to live. Jeff Willis has five kids and more debt than the, average family. \qquad\text{Total liabilities}&&\text{127,730}\\[3pt] You'll get a detailed solution from a subject matter expert that helps you learn core concepts. What happens if you don't pay your health insurance deductible? He has since died. \qquad\text{Total net assets}&&\underline{\text{\hspace{5pt}333,940}}\\ The "Family Need" method of estimating life insurance includes factors such as Social Security and liquid assets, Mutual life insurance companies specialize in the sale of nonparticipating policies, Another name for straight term is renewable return-of-premium term, Decreasing term pays less to the beneficiary as time passes, Return-of-Premium term pays out all premiums plus interest to a beneficiary. 43. Welcome to the Wealth Curve Talk Podcast. 46. E. Single year term. Factors That Affect Life Insurance Premiums Estimate how much life insurance Shaan and Anita should carry. True. You have to drive them to their after-school activities, preparing meals, keeping the household in order, etc. Limited installment payment. If you are a family and either you or your spouse stays home with the children, it is most likely that only the working souse has life insurance coverage because thats the case with most families in our country. Using the nonworking spouse method, what should be the life insurance needs for a Georgia was supposed to pay her premium by the 15th of the month. The simplest method for estimating your clients' life insurance needs is the multiple-of-income approach. What is your life insurance need using the DINK method? Enrolling in a course lets you earn progress by passing quizzes and exams. This is a method that has you multiplying the number of years it takes the youngest child to reach 18 by $10,000. When assessing a client with partial-thickness burns over 60% of the body, which finding should the nurse report immediately? Dividend policy B. Nonparticipating policy C. Mutual policy D. Participating policy E. Stock policy, 34. Quickly and professionally. Before you purchase, be sure to talk to your financial professional about the annuitys features, benefits, and fees and whether the annuity is appropriate for you, based on your financial situation and objectives. The DINK method has you adding half of all your debts to your funeral expenses. Competition among companies with comparable policies can affect the price a company charges for life insurance. Expenses incurred resulted in the release of $7,320 in net assets with donor restrictions. You may not purchase insurance once your term ends. IN THIS ARTICLE Disability income insurance, which complements health insurance, can replace lost income and help protect you and your family from an otherwise financially catastrophic illness or injury. B. Buying from a financially strong company B. Using the "nonworking" spouse method, what should, be the life insurance need for a family whose youngest, 95. Earnings Per Share Overview & Formula | How to Calculate EPS, Capital Budgeting Decisions | Examples, Techniques & Analysis, Activity-Based Costing | Formula, Examples & Benefits. Under this approach, the insurance purchased is based on the value of the income the insured breadwinner can expect to earn during his or her lifetime. D. You must pay interest on any outstanding policy loans. If you switch life insurance policies, you will automatically still be insurable, Annuities are most beneficial for individuals who expect to live only a short time, An investment in an annuity is the same as an investment in a certificate of deposit, Tuitionandfeesreceivable(netofdoubtfulaccountsof$12), Pledgesreceivable(netofdoubtfulaccountsof$280), Property,plan,andequipment(netofaccumulateddepreciationof$104,240), Investments(atfairvalue,costof$162,000), Marketing Essentials: The Deca Connection, Carl A. Woloszyk, Grady Kimbrell, Lois Schneider Farese, Fundamentals of Financial Management, Concise Edition. The premium shall be adjusted on the due date even if it has been received in advance. E. Credit life. \text{Property, plan, and equipment (net of accumulated depreciation of \$104,240)}&&\text{281,404}\\ Francisco and Maria have three children and want to complete a detailed worksheet to determine the amount of life insurance they need to purchase. Benefits of Life Insurance 25,00,000 which will remain same throughout the Policy Term. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. The rule of 70 and the rule of 72 give rough estimates of the number of years it would take for a certain variable to double. She may need to change her coverage as her needs change. E. None of these is correct. If the policy exists, you can ask if you're a beneficiary. \text{Net assets:}\\ \quad\text{Bonds payable}&&\underline{\text{\hspace{10pt}99,000}}\\ When deciding the right amount of coverage required for your spouse, everyones need may be different. B. I highly recommend you use this site! All rights reserved. 44. 47. B. Home Flashcards Chapter 10 Personal Finance. D. 30 days. Pam just started working at XYZ Widget Company and finally wants to get insurance coverage. You policy will continue for one year. to work after your death. In order to have a valid policy, the owner must: To clearly illustrate your insurable interest. Tax benefits/savings are subject to provisions under section 80 C, 80 CCC, 80 D, 10(10A), 10(10D) and other sections of the Income Tax Act, 1961. b. the number of each item you have in stock Contract. The "Family Need" Method. Institutional support 28,500. Replacement value is a method for determining what an insurance company will pay you in case your property is stolen or destroyed. 97. E. Independently wealthy adult. How much term does a non-working spouse get? Using time value of money and assuming you could invest your Buying from professionally qualified representatives C. Ignoring the reputations of local agencies D. Working with a representative who will help you select the proper kind of protection within your financial boundaries E. Asking family or friends for recommendations to choose an insurance company. Purchasing a life insurance policy is a basic and inexpensive task. Life insurance companies do realize that taking care of the house is an equally important as earning an income for the household. In most cases, the life insurance offered to the stay-at-home spouse depends on the coverage and income of the earning counterpart. '`Wb L@b[[s8M,I=s:sr<3Y=w0&)_f& (_X>pO&|`r;ZXeEP4DDi_/%"M{s1&E^}W>f,Kc,$vt ls-`p]s+>hBQ/nmBNO`majcNz@vr2LvDZ \NTef9F+ If you are looking for life insurance, you probably realize the need to secure your family financially, but if you are married, your safety net is probably incomplete unless your spouse also has an adequate life insurance coverage to take care of your familys overall financial needs. 42. Question: Problem 12-10 Using the "Nonworking" Spouse Method to Determine Life Insurance Needs [LO12-2] Tim and Allison are married and have two children, ages 16 and 17 . What is the most important part of an insurance agents job? B. Trade Logo of Canara HSBC Life Insurance Company Limited (formerly known as Canara HSBC Oriental Bank of Commerce Life Insurance Company Ltd) hereinafter referred to as "Insurer" is used under license with Canara Bank and HSBC Group Management Services Limited. The spouse who has to stay at home, looking after the children, cooking, and supporting the family often has a more tiresome job to do, than the working spouse. Your annual premium is $1,000. Using the easy Term insurance B. For example, your life insurance coverage amount will need to pay for funeral expenses, any outstanding debts, any remaining mortgage, and maybe even future financial support for a spouse or children. C. The policy will return all premiums if you survive to the end of the policy. When you're ready to purchase life insurance, you'll need to decide what coverage amount you need so that all your financial obligations and needs are met upon your death. You have a spouse, two kids, a dog and a mortgage - a typical family. It equals the cost of replacing the property. A. Incontestability clause B. Misstatement of age provision C. Naming a beneficiary D. Policy reinstatement E. The grace period. D. Term life insurance plans. \quad\text{Without donor restrictions}&\text{\$\hspace{1pt}104,000}\\ Suppose that yours is a typical family. Your spouse expects to continue to work after your death. Of course, it would be a tragedy were something to happen to your spouse. 1. Shaan and Anita are married and have two children, ages 4 and 7. E. None of these. 82. This website helped me pass! How do I know if my life insurance has cash value? Whole life B. Renewable term C. Convertible term D. Decreasing term E. Multiyear level. to work after your death. You have a gross annual income of $62,000. Can someone be denied homeowners insurance? True The "Family Need" method of estimating life insurance includes factors such as Social Security and liquid assets False Mutual life insurance companies specialize in the sale of nonparticipating policies False

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