C. Final life payment. A. The sooner a person is likely to die, the lower the premiums he or she will pay. D. Life income option. ^Individual death claims settled and reported in public disclosures for FY 2021-22. B. If you have a renewable term policy, A. 99. \quad\text{Unearned revenue}&&\text{900}\\ Another name for a straight term policy is A. Renewable term. For example, say your immediate needs upon death are $10,000 for funeral expenses, $50,000 for emergencies, and $95,000 for mortgage, credit card, and college loans. 79. Whole life. Which of the following statements is correct? You own a home with a mortgage of $110,000, and Factors That Affect Life Insurance Premiums This is a method that has you multiplying your annual gross income by 70% and then multiplying that by 7. Catherine Carey has made the choice to stay home and raise her three kids while her husband works. B. Multiyear level term. Further, making sure that your non-working or part-time working spouse has the maximum amount of coverage based upon your coverage is a fundamental of good planning. 81. D. Spend money. With the right term insurance policy in place, stay prepared for any adversity. Sum Assured fixed at Rs. 44. Competition among companies with comparable policies can affect the price a company charges for life insurance. The cash value of the policy is expected to be The first is the easy method. Please consult your independent tax advisor for details. 38. Most people buy life insurance to A. Whole life. $343,000 C. $490,000 D. $700,000 E. $750,000, 85. 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It will take your youngest child 15 more years to reach 18. The timing for payments of a variable annuity are variable. Your spouse expects to continue to work after your death. A. Adjustable life B. C. The mortality rate it expects among its policy holders. Easy method B. Dual income, no kids method C. Formal calculation method D. Nonworking spouse method E. Family needs method, 30. C. It is better to fund a variable annuity before fully funding your IRA, Keogh, or 401(k). . Work with our consultant to learn what to alter. A process has specification limits of LSL 5 540 and USL 5 550. This problem has been solved! Mildred was diagnosed with terminal cancer and knows that she doesnt have long to live. E. An insurance company will calculate the annual amounts to pay each person for an annuity. 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. Forecasting, Time Series, and Regression (Richard T. O'Connell; Anne B. Koehler), Biological Science (Freeman Scott; Quillin Kim; Allison Lizabeth), Educational Research: Competencies for Analysis and Applications (Gay L. R.; Mills Geoffrey E.; Airasian Peter W.), Brunner and Suddarth's Textbook of Medical-Surgical Nursing (Janice L. Hinkle; Kerry H. Cheever), Business Law: Text and Cases (Kenneth W. Clarkson; Roger LeRoy Miller; Frank B. 68. Find the factor on the chart where the nonworking spouse's age intersects with the working spouse's income from the column on the left 3. Which method are they using to determine their life insurance needs? D. A deferred annuity allows an individual to receive payments from a life insurance policy at some future date. E. Your premium will be higher than a whole life policy premium. A. A. to work after your death. The process standard deviaton Which of the following riders should he consider? In other words, you will have to show why you want to insure the individual. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these funds, their future prospects and returns. Multiply the number of years until the youngest child reaches 18 by $10,000. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. The premium shall be adjusted on the due date even if it has been received in advance. However, at a minimum, you should consider the financial value of child care, house care, and other domestic services that your spouse has been taking care of at present. The last thing to realize is that calculating your life insurance needs can be tricky. Pam just started working at XYZ Widget Company and finally wants to get insurance coverage. To unlock this lesson you must be a Study.com Member. Which of the following provisions should she take action on? You are the wage earner in a typical family, with $55,000 gross annual income. The college received cash contributions without donor restrictions of$2,080, pledges to be collected in 2021 of $550, and cash contributions to the endowments of$335. Let's review. Deferred annuity C. Whole life insurance D. Immediate annuity E. Universal life insurance. You have no plans to increase the size of your family in E. Pay taxes. So your life insurance requirement is 15 $10,000 = $150,000. C. Temporary insurance. Limited installment payment. Please check your entries and try again. Features of Life Insurance d. 28. Term insurance B. \end{array} Of course, it would be a tragedy were something to happen to your spouse. Net deposits returned to students totaled $10. This method has you multiplying your annual gross income by 70% and then multiplying that by 7. Now, you take this number and subtract your available assets from this number. 700 cartons to be stored. It also collected $820 of Pledges Receivable that were unrestricted. This is a method that has you multiplying the number of years it takes the youngest child to reach 18 by $10,000. The settlement option that pays the life insurance proceeds in equal periodic payments for a specified number of years after your death is called A. Lump-sum payment. They plan to purchase life insurance using this formula: Current income 7 70%. D. It builds cash value. Were your family to lose that, you lose all of that labor. Which of the following is NOT a factor that affects the price a company charges for a life insurance policy? At minimal, you want a policy to provide at least 5 years worth of income replacement, until you can balance out things. a) A client with amyotrophic lateral sclerosis (ALS) tells the nurse, "Sometimes I feel so frustrated. $4,000. Group life C. Limited life D. Universal life E. Variable life, 51. A. Step 1 Non-working spouse method: This method is form of insurance coverage that allows you to s. She may need to change her coverage as her needs change. Limited installment payment. A Limited Payment Policy is a while life policy that requires premiums to be paid for a certain period. D. Decreasing term. A. Multiply the income . If you are new to Smallwood Wealth schedule a Wealth Curve Conversation here. 25% C. 50% D. 75% E. 95%, 32. Easy method B. Dual income, no kids method C. Formal calculation method D. Nonworking spouse method E. Family needs method, 28. 43. 76. Tim and Tammy are updating their financial plan and are concerned that they might not have enough life insurance coverage for their family, which includes two children, ages 4 and 10. B. Renewable term. The policy loan provision means that A. 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. Sum Assured fixed at Rs. Prepare journal entries in good form to record the foregoing transactions for the year ended June 30, 2020. Option to add Optional In-Built Covers or choose a Benefit Payout Option other than Lumpsum is not available to non-Working Spouse. Your premium will not increase when you renew it. \textbf{(amounts in thousands)}\\ 65. This method is used only to calculate child care needs, not the total financial needs of the family. Which of the following is the process of getting oxygen from the environment to the tissues of the body? Unit linked Insurance products are different from the traditional insurance products and are subject to the risk factors. Besides getting money into the family, the non-working spouse holds a responsibility for everything that doesnt offer bonus, perks, and promotions. Under this plan option, a Monthly Survival Income shall be payable at the beginning of each month, starting from the Policy Anniversary coinciding with or following the Life Assured attaining age 60 years (last birthday) which shall continue till the end of the Policy Term or the death of the Life Assured whichever is earlier. In case of death of the Life Assured during the Policy Term, Sum Assured on Death basis the Coverage option opted, less cumulative monthly income(s) already paid shall be payable. D. Your premium will not increase when you renew it. Annuity Formula, Calculation & Examples | What is an Annuity? What happens if you dont get life insurance? Fell free get in touch with us via phone or send us a message. Jeff and Erica have two children. Quickly and professionally. C. Individual retirement accounts (IRAs). 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. A. Waiver of premium disability benefit B. What is the amount of life insurance they should carry using the easy method? 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. E. All of these. succeed. This next method is for those with just one wage earner in the family. insurance needs for a family whose youngest child is 5 years Easy method C. DINK method D. Family need E. Soccer mom 95. E. It is better to fund an IRA, Keogh, or 401(k) before buying an annuity. A. The insurance industry rule of thumb that a typical, family will need 70% of salary for seven years in order to, adjust for the financial consequences of a wage-earner's, death is known as which of the following estimation. old? You have a gross annual income of $62,000. One of the most common questions we hear is, Can my non-working spouse qualify for life insurance? The answer is yes! Steiner is a private college. Endowment Plans A. For a non-Working Spouse. Which of the following is NOT a type of permanent life insurance? The policy terminates only after the sum assured on death or diagnosis of Terminal Illness of the second life, or on maturity of the policy term, thereafter. B. When can I switch from original Medicare to an Advantage plan? Riders in Insurance The simplest method for estimating your clients' life insurance needs is the multiple-of-income approach. 80. What kind of policy would you want to purchase? B. What is Life Insurance? 2,10,000, (excluding taxes) premium payment term 10 years and policy term 20 years. 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. The Wealth Curve Talk with John L. Smallwood. Life insurance companies do realize that taking care of the house is an equally important as earning an income for the household. Which of the following allows an individual to receive an amount of income that will change based on the income received from stocks or other investments over a certain period of time, or over his or her life? When using the rule of 70, the number 70 is used in the calculation. Another name for permanent life insurance is A. B. 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. Dividend policy B. Nonparticipating policy C. Mutual policy D. Participating policy E. Stock policy, 34. For more details on risk factors, terms and conditions please read the Sales Brochure carefully before concluding a sale. 59. determine the minimum amount of life insurance you should carry. We want to help you with that. E. Weiss Research. Frank, age 38, was hit by a car and died. The maturity benefit is calculated for a 25 years old healthy male life who has opted for Canara HSBC Life Insurance iSelect Guaranteed Future with iAchieve plan option, monthly premium Rs.10,000 (excluding taxes), premium payment term 10 years and policy term 20 years through online sales channel. 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. Using Exhibit 12-1, determine the life expectancy of a 40-year-old male. 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. Sum Assured as chosen by the Working Spouse under the Plan. Your premium may increase if you continue it for another term because you will be older. B. Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits. Can someone be denied homeowners insurance? Read this lesson to learn what methods you can use to calculate your requirements. Adult child living with parents. It is important to replace all of the income lost when an employed family member dies when using the human-life approach. 5% B. Life insurance is a wise purchase of all individuals. Tim and Tammy are updating their financial plan and are concerned that they might not have enough life insurance coverage for their family, which includes two children, ages 4 and 10. 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. Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits, 62. Home Flashcards Chapter 10 Personal Finance. \end{array} 48. $12,000 in 15 years. 93. $40,000 B. Then compute this number as an annual cost and multiply by the approximate number of years you would need those services, say until your children start going to college, or until you retire to take care of the house yourself. NOT FDIC INSURED. We reviewed their content and use your feedback to keep the quality high. 97. Diffusion Let us complete them for you. copyright 2003-2023 Study.com. B. Determine an estimated regression equation that can be used to predict the overall score given the score for Shore Excursions. method for him to use to calculate his insurance needs? What method. When it comes to purchasing life insurance, you need to make sure you are purchasing enough coverage to cover all your financial needs upon your death. Which of the following policies would meet her needs? You and your spouse have the following debts: Using the nonworking spouse method, what should be the life insurance needs for a Whether you're married, domestic partners or simply sharing a life with someone you love, taking out a pair of affordable term life insurance policies can provide both financial security and peace of mind. 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. Which of the following households most likely has the greatest need for life insurance? For example, say you're the only one working in your family and your youngest child is three. 47. Using the sample chart that follows, find the column showing the age of the nonworking spouse 2. C. Final life payment. Whole life B. Renewable term C. Convertible term D. Decreasing term E. Multiyear level. False. Estimate your total Continuing a mini-series on life insurance, he discusses life insurance for spouse (who does not work or who works part-time). You and your spouse are in good health and have reasonably secure jobs. Nonworking spouse method is a type of insurance policy where without working you can support your children until they turn 18 years old. She, wants to determine her insurance needs. D. An annuity is more advisable for people in poor health than for those who are likely to live longer than average. C. Pay for a vacation. The question is, how big are yours? Anita is a "nonworking" spouse who devotes all of her time to household activities. Which of the following provisions prevents the life insurance company from refusing to pay his beneficiaries because of his original misrepresentation? Allison is a "nonworking" spouse who devotes all of her time to household activities. \text{Liabilities:}\\ Each earns $45,000 annually. a. a way of calculating an inventory's value A. C. Administrative fee. 66. Of the following, which one is the most positive feature of whole life insurance? What is the most important part of an insurance agents job? b. the number of each item you have in stock All other trademarks and copyrights are the property of their respective owners. In other words, if a person's death would cause you significant financial hardship, it's an insurable interest. The "Nonworking" spouse method of estimating life insurance includes factors such as Social Security and liquid assets. Headquartered at 199 Broad Street, Red Bank NJ 07701-2056 They have determined that their annual income is $70,000 and their net worth is now $150,000. If, for example, your account earns 4 percent, divide 72 by 4 to get the number of years it will take for your money to double. How do I know if my life insurance has cash value? Using the "nonworking" spouse method, what should be the life insurance need for a family whose youngest child is 10 years old? Non-Working Spouse Method. The recommendation is to have seven to ten years of life insurance. Using the "nonworking" spouse method, what should, be the life insurance needs for a family whose youngest, 94. You policy will continue for one year. Most participating policies are sold by: 102. \textbf{Statement of Financial Position}\\ Amy has a master's degree in secondary education and has been teaching math for over 9 years. C. 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. Which of the following provisions allows her to keep her coverage if she is a couple of weeks late with paying her premium? was specifically designed for someone in her situation? T&C apply. More thorough because it also considers employer provided insurance, Social Security benefits, and liquid assets. A. B. Estimate how much life insurance Tim and Allison should carry to cover Allison. Judy and James have a 4-year-old child. D. You can convert your policy to a permanent type at the end of the term. Using the DINK method, what should be your need for life insurance? ht _rels/.rels ( J1!}7*"loD c2Haa-?_zwxm A. Life insurance policies, even joint policies, are rated based on your age, health conditions and coverage amount. Academic support 23,300 A. Waiver of premium disability benefit B. The death benefit will be increased by the amount of an outstanding policy loan. 35. You can convert your policy from permanent to term at any time. A. Important Life Insurance Policy Provisions, After-Tax Rate of Return: Definition & Formula, Standard Deviation of Returns | Overview, Investment Volatility & Formula. This gives you seven years of wages at 70%. A. Adjustable life B. The rule of 70 is a calculation to determine how many years it'll take for your money to double given a specified rate of return. Ag;sE2/yNNF;eF]!hiV^r^l PK ! A. Renewable term B. Multiyear level term C. Decreasing term D. Limited payment E. Single year term. The first method is called the easy method. D. Life income option. A. Under the Multiple of Income method of estimating, life insurance needs, what important factor is excluded, 98. 4.Tax benefit of Rs. Jeff and Erica have two children. A person who is named to receive the benefits from an insurance policy is a(n) A. D. Life income option. You heard about several methods you can use to calculate your life insurance needs. f. include taxes, storage fees, and handling costs, Purchasing a life insurance policy is a basic and inexpensive task, Life insurance benefits may be used to pay off a home mortgage or other debts at the time of death, 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, Life insurance is a wise purchase of all individuals, The "Nonworking" spouse method of estimating life insurance includes factors such as Social Security and liquid assets, The "Family Need" method of estimating life insurance includes factors such as social security and liquid assets, Decreasing term pays less to the beneficiary as time passes, The beneficiaries of someone who dies by suicide will never be eligible to receive any benefits from his or her life insurance policy, Competition among companies with comparable policies can affect the price a company charges for life insurance, An interest-adjusted index is a method evaluating the cost of life insurance by taking into accounting the time value of money, The lower the interest-adjusted index, the lower the cost for 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, The most common settlement option for a life insurance program is the lump-sum payment, If you switch life insurance policies, you will automatically still be insurable, Annuities are more attractive for people who expect to live only a short time, The earnings from an investments in an annuity is taxed the same as earnings from an investment in the certificate of deposit, An administrative fee of $150 per year may be deducted to cover record-keeping and other administrative expenses related to a variable annuity, When you buy life insurance, you are making a contract with the company issuing the policy where you agree to pay a premium periodically, If you have misplaced a life insurance policy, your state's insurance commission may be able to help you locate it, Marketing Essentials: The Deca Connection, Carl A. Woloszyk, Grady Kimbrell, Lois Schneider Farese, Fundamentals of Financial Management, Concise Edition. Securities offered through Purshe Kaplan Sterling Investments, MemberFINRA/SIPCHeadquartered at 80 State Street, Albany, NY 12207. They plan to purchase life insurance using this formula: (18 - Youngest child's age) $10,000. A. Ben. Goods & Services Tax will be charged on the premium amount. So with funeral expenses of $10,000, your life insurance requirement is: This next method is for those with just one wage earner in the family. 58. Your spouse expects to continue I would definitely recommend Study.com to my colleagues.
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