It also collected $820 of Pledges Receivable that were unrestricted. Which method are they using to determine their life insurance needs? \textbf{(amounts in thousands)}\\ You can convert your policy from permanent to term at any time. 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. The insurer may tell you, or it may ask you to submit a form reporting the death. Term insurance C. Whole insurance D. Variable annuity E. 401(k), 77. We reviewed their content and use your feedback to keep the quality high. In this case, 18 years. Which of the following policies should she buy? Which of the following households most likely has the greatest need for life insurance? $140,000 B. Under the Multiple of Income method of estimating, life insurance needs, what important factor is excluded, 98. \textbf{Statement of Financial Position}\\ 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. 401(k) plans. A. A. B. You policy will continue for one year. Estimate your total E. An immediate annuity allows an individual to receive payments from an annuity beginning at once. 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. We look forward to speaking with you. False. They have determined that their annual income is $70,000 and their net worth is now $150,000. The premiums & funds are subject to certain charges related to the fund or to the premium paid. . '`Wb L@b[[s8M,I=s:sr<3Y=w0&)_f& (_X>pO&|`r;ZXeEP4DDi_/%"M{s1&E^}W>f,Kc,$vt ls-`p]s+>hBQ/nmBNO`majcNz@vr2LvDZ \NTef9F+ B. A. Which of the following is NOT temporary insurance? Here's how to calculate the estimated life insurance need: 1. 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What is the amount of life insurance they should carry using the "nonworking" spouse method? Term C. Credit life D. Endowment life E. Adjustable life, 53. Use the multiple of income method to Collect premiums for the insurance contract. 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. 25. Life expectancy for men is longer than that for women. Here are the features of adding a Spouse Cover to your iSelect Smart360 Term Plan: Spouse Cover With the iSelect Smart360 Term Plan. A. 5% B. If their youngest child is 5 years old, how much do they need? E. Independently wealthy adult. Both you and the spouse are covered throughout the policy term for your respective separate sums assured. Something went wrong. was specifically designed for someone in her situation? 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The death benefit will be increased by the amount of an outstanding policy loan. Straight life. 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 most common settlement option for a life insurance program is the lump-sum payment. The monthly survival benefit mentioned is an example of Life Assured opting for Sum Assured as 1Cr under Life Secure with Income plan option. About ___ of the U.S. life insurance companies are stock companies. 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. \text{Cash and cash equivalents}&&\text{\$\hspace{18pt}734}\\ Which of the following statements is correct? See Answer Ask to set up a Wealth Curve conversation. Goods & Services Tax will be charged on the premium amount. Whole Life Insurance What happens if you don't pay your health insurance deductible? 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. Using the DINK method, what should be your need for life insurance? Insurance Need: ? An individual can take out a loan on his or her term policy. The sooner a person is likely to die, the lower the premiums he or she will pay. 42. Factors That Affect Life Insurance Premiums When assessing a client with partial-thickness burns over 60% of the body, which finding should the nurse report immediately? \quad\text{Deposits held in custody for others}&&\text{700}\\ 68. fhp>5UN.es r}"n ~c|A1mHNK|i^f>Gk aYT)s7z~fO9~krcVr2@)KTQirUQ!AP+jthG;l!9|R^7|o C. You can convert your term policy to a permanent policy. Catherine Carey has made the choice to stay home, and raise her three kids while her husband works. \quad\text{Without donor restrictions}&\text{\$\hspace{1pt}104,000}\\ 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 Table lamp. D. You can convert your policy to a permanent type at the end of the term. $50,000 C. $80,000 D. $100,000 E. $180,000 B. A. Waiver of premium disability benefit B. If you find the policy or discover paperwork that indicates a policy exists, contact the insurer. 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. \qquad\text{Total liabilities}&&\text{127,730}\\[3pt] Protection against loss of life for a specified term. Each of you 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. the income provider's salary. \end{array} With the right term insurance policy in place, stay prepared for any adversity. It accumulates cash value. This is a very common type of policy taken by homeowners who want to support their children financially. Each plans to continue to work after the other one dies. A. Adjustable life B. Using the DINK method, what should be your need for life insurance? B. Multiyear level term. E. None of these. The following transaction information (amounts in thousands) pertains to the year ended June 30, 2020. . Allowed whole life insurance policies to be sold. You are the wage earner in a typical family, with $55,000 gross annual income. Note: The categorization of Spouse into Working and Non-Working will be as per the Companys Board Approved Underwriting Policy (BAUP). \textbf{Assets}\\ B. To go deeper on the insights from Smallwood Wealth Management, request your FREE COPY of. Mortgage = $190,000; Auto loan = $10,000; Credit card balance = $2,000; and other debts = All guarantees are based on the continued claims paying ability of the issuing company. They have determined that their annual income is $70,000 and their net worth is now $150,000. The goal of this approach is to replace the primary breadwinner's salary for a predetermined number of years. 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. 2,10,000, (excluding taxes) premium payment term 10 years and policy term 20 years. But from a financial perspective, it does not have to be a crisisif you have good planning. Surrender charge. Your spouse expects to continue They plan to purchase life insurance using this formula: Current income 7 70%. We are living in times of uncertainty. A. Ben. Fell free get in touch with us via phone or send us a message. Jeff and Erica have two children. 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. Life insurance companies understand that taking care of the home is invaluable and is equally important as earning an income for the household. What percentage of your income should you spend on life insurance? makes about $38,000 annually. 2.Guaranteed Benefits - Provided all premiums have been paid as and when due and the policy is in-force. She has since died. It will take your youngest child 15 more years to reach 18. Purchasing a life insurance policy is a basic and inexpensive task. Ask a Family Member's Financial Advisor. Work with our consultant to learn what to alter. What is your life insurance need using the DINK method? 25,00,000 which will remain same throughout the Policy Term. Your rates will vary based on your unique circumstances, just as they would if you were single. In most cases, the life insurance offered to the stay-at-home spouse depends on the coverage and income of the earning counterpart. Were your family to lose that, you lose all of that labor. 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. 200 lessons. ht _rels/.rels ( J1!}7*"loD c2Haa-?_zwxm Which of the following is NOT a feature of whole life insurance? 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. And a term insurance cover for house makers, non-working spouses, or say a housewife, proves helpful exactly here, ensuring your family tides over the financial damages in case something unfortunate happens. 80. What is a Rider on a Life Insurance Policy? C. The mortality rate it expects among its policy holders. The Policy Term, Premium Payment Term and the premium payment mode remains the same for the Spouse, as yours. What is the most important part of an insurance agents job? Using the "nonworking" spouse method, what should, be the life insurance needs for a family whose youngest, 94. He has since died. Secondly, consider the value of the unpaid work done by a spouse who spends much of their time raising children. Estimating Your Life Insurance Requirements(continued) The "Nonworking" Spouse Method. E. The policy requires that you pay a specified premium each year for the rest of your life. A. Fixed Insurance products and services offered through Ash Brokerage or Smallwood Associates, Ltd. You are a dual-income, no-kids family. Yes! C. Moodys. Collections on Tuition and Fees Receivable totaled$222,600. Your premium will not increase when you renew it. money elsewhere for a 7 percent annual yield, calculate the net cost of insurance. 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. . 37. Which of the following riders should he consider? So your life insurance requirement is 15 $10,000 = $150,000. 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 owe $11,000 on car loans, $2,000 in personal debt, and $3,000 in credit card A. 79. In this episode, John continues his series on the. Adjusting entries for the period were made to increase Allowance for Doubtful Accounts by $20, to record depreciation expense of$26,400 (charged 70 percent to instruction and 30 percent to academic support), to adjust tuition revenue for an increase in unearned revenue of $10, and to recognize an increase in fair value of investments of$4,700 ($790 was related to investments restricted for scholarships,$1,610 was related to the permanent endowment, the remainder was related to net assets without donor restrictions). Holding Period Return (HPR) Formula & Examples | What is HPR? When using the rule of 70, the number 70 is used in the calculation. Term insurance B. Of the following, which one is the most positive feature of whole life insurance? Whole life B. 1.5 lacs under Income Tax Act, 1961 and tax benefit may vary from assessee to assessee. Estimate how much life insurance Tim and Allison should carry to cover Allison. 35. For example, say you're the only one working in your family and your youngest child is three. 5. Adult child living with parents. Suppose that yours is a typical family. Your annual income is $60,000. This website helped me pass! How do I know if my life insurance has cash value? For a non-Working Spouse. A. Adjustable life B. A. Incontestability clause B. Misstatement of age provision C. Naming a beneficiary D. Policy reinstatement E. The grace period. U ^s1xRpbD#rYNrJC.aeD=U]Sik@X6G[:b4(uH%-+0A?t>vT9. $86,000 C. $98,000 D. $172,000 E. $217,000. Which of the following is NOT important when buying life insurance? False. E. All of these. 66. The timing for payments of a variable annuity are variable. In this case, the only type of life insurance policy you can buy is a guaranteed issue policy. refunds of$11,200 were given. Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits, 62. The simplest method for estimating your clients' life insurance needs is the multiple-of-income approach. The premium so collected in advance shall only be adjusted on the due date of the premium. 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. 'QP2?^03dw 6x ;!;RTkz}Sc;)iI A. Straight life C. Ordinary life D. Term life E. Cash value life. C. Your premium will be the same for the duration of your policy. Now, you take this number and subtract your available assets from this number. Your spouse expects to continue to work after your death. 71. 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. Easy method B. Dual income, no kids method C. Formal calculation method D. Nonworking spouse method E. Family needs method. Group life C. Limited life D. Universal life E. Variable life, 49. E. 60 days. \text{Short-term investments}&&\text{7,666}\\ The big question is how much term life insurance for the non-working spouse (or stay-at-home parent) you should have. D. You must pay interest on any outstanding policy loans. Deferred annuity C. Whole life insurance D. Immediate annuity E. Universal life insurance. a. a way of calculating an inventory's value Home Flashcards Chapter 10 Personal Finance. Single adult living alone. 76. Which of the following is NOT a type of permanent insurance? Amy has a master's degree in secondary education and has been teaching math for over 9 years. She may need to change her coverage as her needs change. In other words, you will have to show why you want to insure the individual. How much storage space is required? \textbf{Liabilities and Net Assets}\\ Limited installment payment. D. Help you select the proper kind of protection within your financial boundaries. E. An insurance company will calculate the annual amounts to pay each person for an annuity. Benefits of Life 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 E. Credit life. Student services 37,700 D. Life income option. 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. 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. Tim and Allison are married and have two children, ages 3 and 6. 74. E. It is permanent life insurance. 51,84,468 which includes Guaranteed Sum Assured on Maturity, accrued Guaranteed Yearly Additions and Guaranteed Loyalty Addition. Do both you and your spouse need life insurance? Most modern insurance covers let you add your spouse under the same policy for an additional premium, often lower than your own premium. Which of the following is a poor choice for the amount of protection offered for an individual? Using time value of money and assuming you could invest your Life Insurance Underwriting 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. What is their total insurance need using the DINK method? Most people buy life insurance to A. A. B. 25,00,000 which will remain same throughout the Policy Term. E. Weiss Research. A young employee is buying individual life insurance and is worried about the impact inflation will have on his life insurance coverage. $40,000 B. Read this lesson to learn what methods you can use to calculate your requirements. You and your spouse have the following debts: Using the nonworking spouse method, what should be the life insurance needs for a Allison is a "nonworking" spouse who devotes all of her time to household activities. \qquad\text{Total net assets}&&\underline{\text{\hspace{5pt}333,940}}\\ insurance needs for a family whose youngest child is 5 years E. None of these is correct. B. How long is the grace period for health insurance policies with monthly due premiums? Cross), Campbell Biology (Jane B. Reece; Lisa A. Urry; Michael L. Cain; Steven A. Wasserman; Peter V. Minorsky), Psychology (David G. Myers; C. Nathan DeWall), The Methodology of the Social Sciences (Max Weber), Civilization and its Discontents (Sigmund Freud), Principles of Environmental Science (William P. Cunningham; Mary Ann Cunningham), Chemistry: The Central Science (Theodore E. Brown; H. Eugene H LeMay; Bruce E. Bursten; Catherine Murphy; Patrick Woodward), Give Me Liberty! Net deposits returned to students totaled $10. old? B. C. Convertible term. Yes. \text{Liabilities:}\\ D. Life income option. Tim and Allison are married and have two children, ages 4 and 7. B. To unlock this lesson you must be a Study.com Member. 73. 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. 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? $12,000 in 15 years. 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. Preserved the tax advantage of annuities but curtailed deductions for IRAs. Using the "nonworking" spouse method, what should, be the life insurance need for a family whose youngest, 95. The average cost of life insurance is $27 a month. We want to help you with that. A process has specification limits of LSL 5 540 and USL 5 550. The cholesterol level in children follows a normal distribution with a mean level of 175mg/dL175 \mathrm{mg} / \mathrm{dL}175mg/dL and a standard deviation of 35mg/dL35 \mathrm{mg} / \mathrm{dL}35mg/dL.
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