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. Which of the following is a charge you will pay when you purchase a variable annuity? MAY LOSE VALUE, INCLUDING LOSS OF PRINCIPAL. Straight life. In other words, you will have to show why you want to insure the individual. Secondly, consider the value of the unpaid work done by a spouse who spends much of their time raising children. In this episode, John continues his series on the. 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. If you want to purchase term insurance, you will receive all of the following except A. Using the "Nonworking" Spouse Method to Determine Life Insurance Needs. Life insurance companies understand that taking care of the home is invaluable and is equally important as earning an income for the household. Insurance Premium A. The companys cost of doing business. nonworking spouse whose youngest child is 5 years old? money elsewhere for a 7 percent annual yield, calculate the net cost of insurance. The capital retention method is a method of determining the amount of life insurance needed by using an interest-only model to support your family. Allison is a "nonworking" spouse who devotes all of her time to household activities. 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. [Content_Types].xml ( Y0}GM old? False. You have a spouse, two kids, a dog and a mortgage - a typical family. It provides both a death benefit and a savings component. Which of the following riders should she consider? In most cases, the life insurance offered to the stay-at-home spouse depends on the coverage and income of the earning counterpart. What is your life insurance need using the DINK method? D. It builds cash value. The simplest method for estimating your clients' life insurance needs is the multiple-of-income approach. 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. $140,000 B. 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. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Your annual premium is $1,000. Which method are they using to determine their life insurance needs? A deferred annuity allows an individual to receive payments from a life insurance policy immediately. Wendy has had a life insurance policy for five years. Is life insurance for married couples cheaper? It accumulates cash value. A. Using Exhibit 12-1, determine the average numbers of additional years males alive at We want to help you with that. Using the "nonworking" spouse method, what should be the life insurance need for a family whose youngest child is 10 years old? Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits, 61. You estimate that funeral expenses will be $5,000. Or, you can call us at (800) 797-1000. So your life insurance requirement is 15 $10,000 = $150,000. Your premium will not increase when you renew it. Pay off a mortgage. Life Insurance Underwriting 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. Jeff and Erica have two children. Ag;sE2/yNNF;eF]!hiV^r^l PK ! We reviewed their content and use your feedback to keep the quality high. E. An immediate annuity allows an individual to receive payments from an annuity beginning at once. 81. 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. Using the nonworking spouse method, what should be the life insurance needs for a What is the cost of living in California? B. Renewable term. The recommendation is to have seven to ten years of life insurance. C. Your premium will be the same for the duration of your policy. 'QP2?^03dw 6x ;!;RTkz}Sc;)iI Life insurance companies do realize that taking care of the house is an equally important as earning an income for the household. E. Proceeds left with the company. Which of the following is NOT a type of permanent life insurance? E. Your premium will be higher than a whole life policy premium. \text{Tuition and fees receivable (net of doubtful accounts of \$12)}&&\text{230}\\ You can take out a life insurance policy on your spouse if you have an insurable interest. 5% B. A. Look through financial records. Here's how to calculate the estimated life insurance need: 1. $4,000. She has since died. You pay premiums each year for the rest of your life. A. A. Waiver of premium disability benefit B. You heard about several methods you can use to calculate your life insurance needs. A. Waiver of premium disability benefit B. Table lamp. 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. A deferred annuity allows an individual to receive payments from an annuity at some future date. If you are new to Smallwood Wealth schedule a Wealth Curve Conversation here. Whole life B. Renewable term C. Convertible term D. Decreasing term E. Multiyear level. nonworking spouse whose youngest child is 6 years old? 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. Headquartered at 199 Broad Street, Red Bank NJ 07701-2056 C. The policy owner can borrow any amount up to the cash value of the policy. Term insurance B. A. Adjustable life B. Besides getting money into the family, the non-working spouse holds a responsibility for everything that doesnt offer bonus, perks, and promotions. Answered: Shaan and Anita are married and have | bartleby \end{array} 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. 66. 72. Your spouse expects to continue to work after your death. If you have a conversion term policy, A. Further, you estimate that your funeral will cost $6,000. Steiner is a private college. This problem has been solved! Investors in the Scheme are not being offered any guaranteed / assured returns. Let's review. Each earns $45,000 annually. Which of the following riders provided an additional benefit for his heirs? She may need to change her coverage as her needs change. Georgia was supposed to pay her premium by the 15th of the month. Limited installment payment. 74. Such advance premium, if any, paid by the Policyholder shall not carry any interest. A. B. Life insurance benefits may be used to pay off a home mortgage or other debts at the time of death. What will be the surrender value of LIC policy after 5 years? Sum Assured fixed at Rs. 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. The death benefit will be increased by the amount of an outstanding policy loan. Earnings Per Share Overview & Formula | How to Calculate EPS, Capital Budgeting Decisions | Examples, Techniques & Analysis, Activity-Based Costing | Formula, Examples & Benefits. Your rates will vary based on your unique circumstances, just as they would if you were single. Group life C. Limited life D. Universal life E. Variable life, 52. Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits. A person who is named to receive the benefits from an insurance policy is a(n) A. 48. Course Hero is not sponsored or endorsed by any college or university. Which of the following riders should he consider? C. Moodys. This is also the most thorough method. 69. You must pay interest on any loans. She, wants to determine her insurance needs. a. a way of calculating an inventory's value Securities offered through Purshe Kaplan Sterling Investments, MemberFINRA/SIPCHeadquartered at 80 State Street, Albany, NY 12207. \quad\text{Accounts payable and accrued liabilities}&&\text{\$\hspace{5pt}21,130}\\ \qquad\text{Total liabilities}&&\text{127,730}\\[3pt] This is a very common type of policy taken by homeowners who want to support their children financially. 59. 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. Agency Problem in Finance Overview, Duties & Examples | What is the Agency Problem? 101. Your annual income is $100,000. PPTX Life Insurance Chapter Fourteen - University of Arkansas Holly and Matt want to use the "nonworking" spouse method to determine the amount of life insurance coverage they need. 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 . A. Adjustable life B. For a non-Working Spouse. 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. Megan wants to purchase a life insurance policy that will allow her to invest in stock. With an available asset of $500,000 in savings, your life insurance requirement is $1,355,000 - $500,000 = $855,000. Explanation: Generally when there is only one working spouse in a household and you want to get insurance to cover child care needs, you can use the non-working spouse method which is very simple to calculate but will also carry a very low amount. 2.Guaranteed Benefits - Provided all premiums have been paid as and when due and the policy is in-force. 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. $18,000 C. $50,000 D. $130,000 E. $180,000, 84. One of the most common questions we hear is, Can my non-working spouse qualify for life insurance? The answer is yes! You are the wage earner in a typical family, with $55,000 gross annual income. \text{Cash and cash equivalents}&&\text{\$\hspace{18pt}734}\\ . Collections on Tuition and Fees Receivable totaled$222,600. Using the "Nonworking" Spouse Method to Determine Life Insurance Needs. A deferred annuity allows an individual to receive payments from an annuity immediately. E. An insurance company will calculate the annual amounts to pay each person for an annuity. If you have a multiyear level term policy, A. Can someone be denied homeowners insurance? the near future. We look forward to speaking with you. A. Variable life C. Universal life D. Adjustable life E. Decreasing term life. Using the nonworking spouse method what should be the life insurance If their youngest child is 5 years old, how much do they need? DESIGNED BY: INTERSOFT ASSOCIATES. B. the income provider's salary. 25,00,000 which will remain same throughout the Policy Term. B. \textbf{STEINER COLLEGE}\\ C. It is better to fund a variable annuity before fully funding your IRA, Keogh, or 401(k). \quad\text{Without donor restrictions}&\text{\$\hspace{1pt}104,000}\\ Get unlimited access to over 88,000 lessons. Both you and the spouse are covered throughout the policy term for your respective separate sums assured. 38. A. Jeff Willis has five kids and more debt than the, average family. Francisco and Maria have three children and want to complete a detailed worksheet to determine the amount of life insurance they need to purchase. 25,00,000 which will remain same throughout the Policy Term. What happens if you dont get life insurance? If you have a renewable term policy, A. B. Continuing a mini-series on life insurance, he discusses life insurance for spouse (who does not work or who works part-time). Life insurance companies pay out the proceeds when the insured dies and the beneficiary of the policy files a life insurance claim. How much storage space is required? 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. If the policy exists, you can ask if you're a beneficiary. DINK stands for double income, no kids. An immediate annuity allows an individual to receive payments from an annuity beginning at once. 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. \text{Liabilities:}\\ Variety of Fund Options and Portfolio Management Strategies, Loyalty Additions + Wealth Boosters + Return of Mortality Charges, Optional In-built covers to enhance coverage, Policy Term of 1 year or less than 1 year. 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. Easy method C. DINK method D. Family need E. Soccer mom 95. 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. 2. 5EPhGD!A'b1^:x[)(2##19pH`G0v#/(5;dI(D fhp>5UN.es r}"n ~c|A1mHNK|i^f>Gk aYT)s7z~fO9~krcVr2@)KTQirUQ!AP+jthG;l!9|R^7|o 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} 79. C. Final life payment. Limited installment payment. 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. C. A life insurance policy allows an individual to receive payments from an annuity at once. C. Administrative fee. You have to drive them to and from school, oversee homework and music practice. C. Tell you why her product is better than the competitors. In other words, if a person's death would cause you significant financial hardship, it's an insurable interest. 70. $140,000 B. 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. $13,000 B. Were your family to lose that, you lose all of that labor. Estimating Your Life Insurance Requirements(continued) The "Nonworking" Spouse Method. In many cases, the answer is yes. What is the amount of life insurance they should carry using the "nonworking" spouse method? A. This website helped me pass! What is the amount of life insurance they should carry using the easy method? D. A benefit during the period it covers, such as 1, 5, 10, or 20 years. Further, you estimate that your funeral will cost $6,000. 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. Which method are they using to determine their life insurance needs? A. Insurance needed. ht _rels/.rels ( J1!}7*"loD c2Haa-?_zwxm 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. Factors That Affect Life Insurance Premiums Fell free get in touch with us via phone or send us a message. What happens if you don't pay your health insurance deductible? Nonworking spouse method is a type of insurance policy where without working you can support your children until they turn 18 years old. Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits, 63. The settlement option that pays the life insurance proceeds to the beneficiary for as long as she or he lives is called A. Lump-sum payment. A. B. 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. 25. Bill is worried about being able to pay his premium if he is totally and permanently disabled before age 60. Which method are they using to determine their life insurance needs? A. Waiver of premium disability benefit B. Which of the following is NOT a factor that affects the price a company charges for a life insurance 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. What are the four methods of determining life insurance needs? Your spouses cover must be useful to pay for childcare expenses and all the help you need around the house. An error occurred trying to load this video. One such cover by Canara HSBC Life Insurance Company is the iSelect Smart360 Term Plan. And, lastly, the family need method is 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 from it. This method has you multiplying your annual gross income by 70% and then multiplying that by 7. Bonnie is most concerned about being able to buy additional insurance without undergoing medical exams. The monthly survival benefit mentioned is an example of Life Assured opting for Sum Assured as 1Cr under Life Secure with Income plan option. determine the minimum amount of life insurance you should carry. B. Under the Multiple of Income method of estimating, life insurance needs, what important factor is excluded, 98. I highly recommend you use this site! Insurance Need: . D. Her parents. C. 10 days. This is based on data provided by Quotacy for a 40-year-old buying a 20-year, $500,000 term life policy, which is the most common term length and amount sold. \textbf{June 30, 2019}\\ Whole life 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. Replacement value is a method for determining what an insurance company will pay you in case your property is stolen or destroyed. ^Individual death claims settled and reported in public disclosures for FY 2021-22. Mildred was diagnosed with terminal cancer and knows that she doesnt have long to live. This method is called the non-working spouse method. Fixed annuity B. Catherine Carey has made the choice to stay home, and raise her three kids while her husband works. Estimate how much life insurance Tim and Allison should carry to cover Allison. He has since died. A. Its like a teacher waved a magic wand and did the work for me. \quad\text{Bonds payable}&&\underline{\text{\hspace{10pt}99,000}}\\ Yes. You may not purchase insurance once your term ends. C. It is more expensive than term insurance. Frank, age 38, was hit by a car and died. Please consult your independent tax advisor for details. I feel like its a lifeline. 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. 82. Easy method B. Dual income, no kids method C. Formal calculation method D. Nonworking spouse method E. Family needs method, 29. D. Spend money. When using the rule of 70, the number 70 is used in the calculation. The ending balance in Accounts Payable and Accrued Liabilities was$1,935. As a member, you'll also get unlimited access to over 88,000

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