What is Life Insurance? When deciding the right amount of coverage required for your spouse, everyones need may be different. Holly and Matt want to use the "nonworking" spouse method to determine the amount of life insurance coverage they need. 26. The Policy will terminate after payment of this benefit. B. 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. The "Nonworking" spouse method of estimating life insurance includes factors such as Social Security and liquid assets. 59. The DINK method has you adding half of all your debts to your funeral expenses. Let us have a look at your work and suggest how to improve it! Expenses incurred resulted in the release of $7,320 in net assets with donor restrictions. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Diffusion Let us complete them for you. \quad\text{Accounts payable and accrued liabilities}&&\text{\$\hspace{5pt}21,130}\\ Frank, age 38, was hit by a car and died. A. 3 days. $13,000 B. 12-3 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. D. Life income option. C. The policy owner can borrow any amount up to the cash value of the policy. 47. Here's how to calculate the estimated life insurance need: 1. Your premium may increase if you continue it for another term because you will be older. \text{Pledges receivable (net of doubtful accounts of \$280)}&&\text{5,872}\\ It will take your youngest child 15 more years to reach 18. Contract. is your life insurance need based on the easy method? $196,000 C. $280,000 D. $400,000 E. $430,000, 83. Student services 37,700 loans. Dividend policy B. Nonparticipating policy C. Mutual policy D. Participating policy E. Stock policy, 34. The process standard deviaton Which of the following provisions allows her to keep her coverage if she is a couple of weeks late with paying her premium? Which of the following is a charge you will pay when you purchase a variable annuity? They own a home with a $125,000 mortgage; they owe $25,000 for their car loans and have $22,000 in student loans. D. Spend money. B. 2003-2023 Chegg Inc. All rights reserved. C. Her contingent beneficiaries. E. Independently wealthy adult. a. a way of calculating an inventory's value Your surviving family's ongoing needs are $800,000 for your spouse's needs, and your dependent children's needs are $400,000 for a limited period of time. $12,000 B. Multiply the number of years until the youngest child reaches 18 by $10,000. Who will receive the benefits from her policy? The total debts of you and your spouse include the following: mortgage, $200,000; auto loan, $16,000; credit card balance, $2,000; and personal debts of $4,000. Insurance Need: ? It is important to replace all of the income lost when an employed family member dies when using the human-life approach. Shaan and Anita are married and have two children, ages 4 and 7. Your annual premium is $1,000. E. None of these is correct. Which of the following is the process of getting oxygen from the environment to the tissues of the body? E. Proceeds left with the company. STEINERCOLLEGEStatementofFinancialPositionJune30,2019(amountsinthousands)\begin{array}{c} copyright 2003-2023 Study.com. Nonworking spouse method is a type of insurance policy where without working you can support your children until they turn 18 years old. A. You estimate that funeral expenses will be $5,000. D. Decreasing term. Allowed whole life insurance policies to be sold. Whole life B. Donald and Charlene are married and do not have any children. You want to purchase a life insurance policy that pays a dividend. Jeanne wants to purchase a life insurance policy with guaranteed premiums. Whole life B. 69. Insurance Premium
C. Final life payment. E. Made all annuities tax free. A. Incontestability clause B. Misstatement of age provision C. Naming a beneficiary D. Policy reinstatement E. The grace period, 57. You have a gross annual income of $62,000. Protection against loss of life for a specified term. 4.Tax benefit of Rs. Certificates of deposit. B. Term insurance C. Whole life insurance D. Variable annuity E. 401(k). STEINERCOLLEGEStatementofFinancialPositionJune30,2019(amountsinthousands), AssetsCashandcashequivalents$734Short-terminvestments7,666Tuitionandfeesreceivable(netofdoubtfulaccountsof$12)230Pledgesreceivable(netofdoubtfulaccountsof$280)5,872Prepaidassets1,364Property,plan,andequipment(netofaccumulateddepreciationof$104,240)281,404Investments(atfairvalue,costof$162,000)158,400Totalassets$455,670LiabilitiesandNetAssetsLiabilities:Accountspayableandaccruedliabilities$21,130Depositsheldincustodyforothers700Unearnedrevenue900Bondspayable99,000Totalliabilities127,730Netassets:Withoutdonorrestrictions$104,000Withdonorrestrictions229,940Totalnetassets333,940Totalliabilitiesandnetassets$455,670\begin{array}{lrr} Now, you take this number and subtract your available assets from this number. You can take out a life insurance policy on your spouse if you have an insurable interest. A. refunds of$11,200 were given. But from a financial perspective, it does not have to be a crisisif you have good planning. This website helped me pass! She was recently divorced. Allison is a "nonworking" spouse who devotes all of her time to household activities. 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. You can convert your policy from permanent to term at any time. Catherine Carey has made the choice to stay home, and raise her three kids while her husband works. During the year, charges for tuition and fees were $244,500; scholarships were$16,300; and tuition waivers for scholastic achievement were $5,100. If we really see it through the lens, probably the Non-working Spouse, as the life insurance industry calls it, has more of the work to do without getting paid as much as its office-going counterpart. Investors in the Scheme are not being offered any guaranteed / assured returns. 76. E. Weiss Research. Use Exhibit 1-B. Call the State Commissioner's Office for your State. A. Adjustable life B. 51,84,468 which includes Guaranteed Sum Assured on Maturity, accrued Guaranteed Yearly Additions and Guaranteed Loyalty Addition. D. Life income option. What will be the surrender value of LIC policy after 5 years? Stephanie is the wage earner in a "typical family" with $40,000 gross annual income. It helped me pass my exam and the test questions are very similar to the practice quizzes on Study.com. You have to drive them to their after-school activities, preparing meals, keeping the household in order, etc. The premium so collected in advance shall only be adjusted on the due date of the premium. Estimating Your Life Insurance Requirements(continued) The "Nonworking" Spouse Method. Ask to set up a Wealth Curve conversation. What kind of policy is he planning to purchase? A. Non-Working Spouse Method. What is the amount of life insurance they should carry using the easy method? Suppose you are 45 and have a $50,000 face amount, 15-year, limited-payment, How much term does a non-working spouse get? It is better to fund a fixed annuity before fully funding your IRA, Keogh, or 401(k). Further, you estimate that your funeral will cost $6,000. Further, you estimate that your funeral will cost $6,000. A. Waiver of premium disability benefit B. See Answer Institutional support 28,500. Fixed Annuities are long-term insurance products. You are a dual-income, no-kids family. B. Steiner is a private college. C. A life insurance policy allows an individual to receive payments from an annuity at once. If you have a conversion term policy, A. The Policy Term, Premium Payment Term and the premium payment mode remains the same for the Spouse, as yours. What is the cost of living in California? 71. Enrolling in a course lets you earn progress by passing quizzes and exams. NOT FDIC INSURED. Academic support 23,300 27. Life insurance companies understand that taking care of the home is invaluable and is equally important as earning an income for the household. When can I switch from original Medicare to an Advantage plan? E. All of these. MAY LOSE VALUE, INCLUDING LOSS OF PRINCIPAL. Nonworking spouse method is a type of insurance policy where without working you can support your children until they turn 18 years old. age 35 may expect to live. Your needs will also change over time, so your life insurance needs may also change over time. \quad\text{With donor restrictions}&\underline{\text{\hspace{5pt}229,940}}\\ The "Family Need" Method. - Definition, History & Examples, Stealth Advertising: Definition & Examples, What is Crowdsourcing? Life expectancy for men is longer than that for women. $4,000. Its like a teacher waved a magic wand and did the work for me. B. Dun & Bradstreet. 72. When calculating an amount, ask yourself what it will cost to hire someone to replace your spouse and perform all the tasks your non-working spouse does throughout the day. D. Standard & Poors. Sum Assured fixed at Rs. Now, if it's just you and your spouse, you can use the DINK method. 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. D. Term. Multiply the income . Required Reserve Ratio Formula | How to Calculate Required Reserves, Monthly Payment Formula | How to Calculate Loan Payments. Which of the following is NOT a factor that affects the price a company charges for a life insurance policy? Steiner Colleges statement of financial position for the year ended June 30, 2019, is presented here. Which of the following households most likely has the greatest need for life insurance? A. 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. The provisions of Income Tax Act, 1961 are subject to amendments made by the government from time to time. There's no one-size-fits-all answer to this because every family is different, but a 15- to 20-year policy between $250,000400,000 is a general rule. They plan to purchase life insurance using this formula: Current income 7 70%. 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. . 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. 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. The Tax Reform Act of 1986 A. D. Insurer. Which of the following riders provided an additional benefit for his heirs? Each of you In other words, you will have to show why you want to insure the individual. Factors That Affect Life Insurance Premiums
Home Flashcards Chapter 10 Personal Finance. Look through financial records. A person who is named to receive the benefits from an insurance policy is a(n) A. Fixed annuity B. Whole life. For example, say. The companys cost of doing business. B. A. Adjustable life B. In this episode, John continues his series on the. 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. C. Pay for a vacation. 43. Everyone is impacted by these 5 problems. Allison is a "nonworking" spouse who devotes all of her time to household activities. determine the minimum amount of life insurance you should carry. The policy loan provision means that A. Beneficiary. While it is wise to buy a life insurance policy to protect the income of the earning spouse, covering the non-working spouse may not seem as important. 46,800/- is calculated at the highest tax slab of 31.2%(including 4% cess) for an individual assessee on life insurance premium of Rs. 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. 58. B. Most participating policies are sold by: 102. Holding Period Return (HPR) Formula & Examples | What is HPR? A. Please check your entries and try again. Which of the following riders would allow her to receive cash now? Wendy has had a life insurance policy for five years. This is a very common type of policy taken by homeowners who want to support their children financially. nonworking spouse whose youngest child is 6 years old? Prepare journal entries in good form to record the foregoing transactions for the year ended June 30, 2020. T&C Apply. A. This method is called the non-working spouse method. Use the easy method to determine how much insurance she should carry. Group life C. Limited life D. Universal life E. Variable life, 52. This is a method that has you adding half of all your debts plus funeral expenses. Which of the following is NOT temporary insurance? Related to the expenses incurred: prepaid assets of $534 were used,$4,776 of the expenses were accrued, and the remaining expenses were paid. A. C. A life insurance policy allows the beneficiary to receive proceeds at some future date. I highly recommend you use this site! You heard about several methods you can use to calculate your life insurance needs. Sum Assured as chosen by the Working Spouse under the Plan. Mildred was diagnosed with terminal cancer and knows that she doesnt have long to live. Find the CpC_pCp and CpkC_{pk}Cpk capability indexes if. Fred bought life insurance five years ago. Life Insurance Underwriting
The first is the easy method. Sell you the highest level of coverage available. 1. B. But life insurance rates can vary dramatically among applicants, insurers and policy types. You have no other debt. Earnings Per Share Overview & Formula | How to Calculate EPS, Capital Budgeting Decisions | Examples, Techniques & Analysis, Activity-Based Costing | Formula, Examples & Benefits. D. The policy features. What percentage of your income should you spend on life insurance? Which of the following provisions should she take action on? Estimate how much life insurance Tim and Allison should carry. NOT INSURED BY ANY STATE OR FEDERAL AGENCY. A deferred annuity allows an individual to receive payments from an annuity immediately. 42. Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits, 62. Using Exhibit 12-1, determine the average numbers of additional years males alive at \text{Investments (at fair value, cost of \$162,000)}&&\underline{\text{\hspace{5pt}158,400}}\\ You and your spouse are in good health and have reasonably secure jobs. - Definition & Types, Influencer in Marketing: Definition & Overview, Intangibility in Marketing: Definition & Overview, Learned Behavior in Marketing: Definition, Types & Examples, Marketing Orientation: Definition & Examples, Schedule Variance: Definition, Formula & Calculation, Unique Selling Proposition (USP): Examples & Definition, What Is Product Placement? 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. 3.The maturity benefit calculated for a 25 years old healthy male who has opted for Canara HSBC Life Insurance Guaranteed Savings Plan with Guaranteed Savings Option through insurers website, annual premium Rs. B. Bens beneficiaries. 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. d. 28. Your spouse expects to continue to work after your death. $140,000 B. 101. 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. 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. How to Buy Life Insurance: Steps & Choices, App. D. Your policy will have the same premium as other term policies. B. Unit linked Insurance products are different from the traditional insurance products and are subject to the risk factors. D. 30 days. You policy will continue for one year. Francisco and Maria have three children and want to complete a detailed worksheet to determine the amount of life insurance they need to purchase. Investment Advisory Services provided by Smallwood Wealth Investment Management, LLC, an SEC registered investment advisor. The goal of this approach is to replace the primary breadwinner's salary for a predetermined number of years. Your spouses cover must be useful to pay for childcare expenses and all the help you need around the house. $50,000 C. $80,000 D. $100,000 E. $180,000 B. E. Proceeds left with the company. D. An annuity is more advisable for people in poor health than for those who are likely to live longer than average. 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. $40,000 B. 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. 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. Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits, 63.
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