If their youngest child is 5 years old, how much do they need? Which of the following policies would meet her needs? The human-life approach is a method of calculating how much life insurance is needed for a family that is based upon their financial loss when the insured person in the family passes away. Using the "nonworking" spouse method, what should be the life insurance needs for a family whose youngest child is 5 years old? 72. Lastly, it allows you to keep your future obligations: college, paying off debts, weddings, bar mitzvahs and bat mitzvahs, sweet sixteens, and all the other things that you want to do for your kids. Your premium may increase if you continue it for another term because you will be older. What are the stages of the General Adaptation Syndrome (GAS)? $140,000 B. Fixed annuity B. Diffusion Let us complete them for you. B. E. Proceeds left with the company. Whole life B. Each plans to continue to work after the other one dies. In this case, the only type of life insurance policy you can buy is a guaranteed issue policy. Further, you estimate that your funeral will cost $6,000. C. Final life payment. Endowment Plans A. Incontestability clause B. Misstatement of age provision C. Naming a beneficiary D. Policy reinstatement E. The grace period, 57. D. A benefit during the period it covers, such as 1, 5, 10, or 20 years. D. The policy features. Your spouse expects to continue to work after your death. A. Allison is a "nonworking" spouse who devotes all of her time to household activities. . 73. You own a home with a mortgage of $110,000, and b. the number of each item you have in stock One of our associate will call you back shortly. D. Life income option. the near future. Benefits of Life Insurance \textbf{Statement of Financial Position}\\ Which of the following riders provided an additional benefit for his heirs? \text{Investments (at fair value, cost of \$162,000)}&&\underline{\text{\hspace{5pt}158,400}}\\ This gives you 7 years of wages at 70%. 48. C. Pay for a vacation. D. Help you select the proper kind of protection within your financial boundaries. DINK stands for double income, no kids. The sooner a person is likely to die, the lower the premiums he or she will pay, Life expectancy for men is longer than that for women. A. Using time value of money and assuming you could invest your Of the following, which one is the most positive feature of whole life insurance? A. Welcome to the Wealth Curve Talk Podcast. This is a very common type of policy taken by homeowners who want to support their children financially. \quad\text{Unearned revenue}&&\text{900}\\ C. Moodys. Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits. D. A deferred annuity allows an individual to receive payments from a life insurance policy at some future date. Annuity Formula, Calculation & Examples | What is an Annuity? If you mean you want to add life insurance coverage for your new spouse on your life insurance policy, you can contact your life insurance agent or carrier and request what it would cost to add a spouse rider for life insurance coverage to your existing policy. Anita is a "nonworking" spouse who devotes all of her time to household activities. E. No interest will accumulate for any loans related to life insurance. What. Megan wants to purchase a life insurance policy that will allow her to invest in stock. 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 . Income replacement is one of the main reasons many people, especially those who have loved ones depending on them financially, have life insurance. D. It builds cash value. Such advance premium, if any, paid by the Policyholder shall not carry any interest. \textbf{Liabilities and Net Assets}\\ Fred bought life insurance five years ago. To Buy: 1800-258-5899 (9:30 AM to 6:30 PM), For Existing Policy: 1800-103-0003/ 1800-180-0003/ 1800-891-0003, Managing Director & Chief Executive Officer. C. Policyholder. A term insurance plan will also help to save taxes on the premiums under Section 80C of the IT Act. A. \text{Cash and cash equivalents}&&\text{\$\hspace{18pt}734}\\ \text{Short-term investments}&&\text{7,666}\\ Purchasing a life insurance policy is a basic and inexpensive task. Tim and Allison are married and have two children, ages 3 and 6. Which of the following provisions prevents the life insurance company from refusing to pay his beneficiaries because of his original misrepresentation? Determine an estimated regression equation that can be used to predict the overall score given the score for Shore Excursions. 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. Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits, 62. Which of the following is NOT a type of permanent insurance? An individual can take out a loan on his or her term policy. 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. Another name for a straight term policy is A. Renewable term. Under this method, the original principal that you save will still remain at the end of the income period. Using the sample chart that follows, find the column showing the age of the nonworking spouse 2. Goods & Services Tax will be charged on the premium amount. The income replacement approach is a method of determining the amount of life insurance you should purchase. 67. Having life insurance for income replacement means if you pass away, your family could have the financial support they need to maintain the lifestyle they're used to. In contrast to the biopsychosocial model, the biomedical model views health as ___________. Which of the following provisions should she take action on? Multiply the income . She was recently divorced. 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. Term C. Credit life D. Endowment life E. Adjustable life, 53. \text{Tuition and fees receivable (net of doubtful accounts of \$12)}&&\text{230}\\ C. Administrative fee. \textbf{STEINER COLLEGE}\\ E. It is better to fund an IRA, Keogh, or 401(k) before buying an annuity. Not necessarily. Term insurance C. Whole life insurance D. Variable annuity E. 401(k). Let's review. 2003-2023 Chegg Inc. All rights reserved. The settlement option in which the company acts as trustee and pays interest to the beneficiary is called A. Lump-sum payment. method, what should be your need for life insurance? The timing for payments of a variable annuity are variable. 12-3 What impact do they have on your wealth potential. You estimate that funeral expenses will be $5,000. Find the CpC_pCp and CpkC_{pk}Cpk capability indexes if. An interest-adjusted index is a method of evaluating the cost of life insurance by taking into account the time value of money, The lower the interest-adjusted index, the lower the cost of a life insurance policy, If you change your mind about your insurance policy, you have 60 days to return it to receive a refund of your premium. ht _rels/.rels ( J1!}7*"loD c2Haa-?_zwxm Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits, 64. 401(k) plans. Replacement value is a method for determining what an insurance company will pay you in case your property is stolen or destroyed. A. Quickly and professionally. 69. T&C Apply. 24. Academic support 23,300 C: Consumer Agencies & Organizations, CLEP Financial Accounting: Study Guide & Test Prep, Introduction to Financial Accounting: Certificate Program, High School Marketing for Teachers: Help & Review, How to Choose a College: Guidance Counseling, UExcel Workplace Communications with Computers: Study Guide & Test Prep, Effective Communication in the Workplace: Certificate Program, Effective Communication in the Workplace: Help and Review, CLEP Principles of Macroeconomics: Study Guide & Test Prep, Intro to Excel: Essential Training & Tutorials, Information Systems and Computer Applications: Certificate Program, GED Social Studies: Civics & Government, US History, Economics, Geography & World, What is Whole Life Insurance? 74. $12,000 in 15 years. The question is, how big are yours? Life insurance companies pay out the proceeds when the insured dies and the beneficiary of the policy files a life insurance claim. Please consult your independent tax advisor for details. More thorough because it also considers employer provided insurance, Social Security benefits, and liquid assets. Of course, it would be a tragedy were something to happen to your spouse. E. Single year term. $12,000 B. Most people buy life insurance to A. To unlock this lesson you must be a Study.com Member. A. Sell you the highest level of coverage available. She may need to change her coverage as her needs change. They have determined that their annual income is $70,000 and their net worth is now $150,000. Sum Assured fixed at Rs. What is Life Insurance? 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. B. Which of the following policies would meet her needs? C. Your premium will be the same for the duration of your policy. You have a spouse, two kids, a dog and a mortgage - a typical family.
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