You pay premiums each year for the rest of your life. E. Cash value life. $50,000 C. $80,000 D. $100,000 E. $180,000 B. E. 60 days. The non-working spouse method is a method that has you multiplying the number of years it takes the youngest child to reach 18 by $10,000. Variable life C. Universal life D. Adjustable life E. Decreasing term life. D. Fund expense. D. Insurer. Which of the following households most likely has the greatest need for life insurance? Using the nonworking spouse method, what should be the life insurance needs for a the easy method to determine how much life insurance you should carry. 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. A process has specification limits of LSL 5 540 and USL 5 550. D. A deferred annuity allows an individual to receive payments from a life insurance policy at some future date. Maximum amount that can be claimed as deduction for education loan, How to File ITR for Income under 2.5 Lakh, How to Reduce Tax Liability with Term Insurance, Know the Tax Benefit on Saving for Retirement, Need for a Life Insurance for the Non-Working Spouse, Making claim settlement easy for your beneficiaries, How has the occurrence of covid-19 affected insurance in INDIA, Factors That Affect Life Insurance Premiums, Reasons for Life Insurance Claim Rejection, Unclaimed Amount Movement To-senior Citizens Welfare Fund. Most participating policies are sold by: 102. 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 . 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. Estimate how much life insurance Tim and Allison should carry. $12,000 in 15 years. Dividend policy B. Nonparticipating policy C. Mutual policy D. Participating policy E. Stock policy, 34. 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. A. b. the number of each item you have in stock Course Hero is not sponsored or endorsed by any college or university. Sum Assured as chosen by the Working Spouse under the Plan. B. Renewable term. Please consult your independent tax advisor for details. \textbf{Liabilities and Net Assets}\\ A. Adjustable life B. False. A. A. \quad\text{Without donor restrictions}&\text{\$\hspace{1pt}104,000}\\ 60. I would definitely recommend Study.com to my colleagues. Tuition waivers of $17,300 for students serving as teaching assistants for instruction were accrued. 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. Which of the following provisions prevents the life insurance company from refusing to pay his beneficiaries because of his original misrepresentation? C. Tell you why her product is better than the competitors. Which of the following products allows an individual to receive payments beginning now? B. 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. 1.5 lacs under Income Tax Act, 1961 and tax benefit may vary from assessee to assessee. [Content_Types].xml ( Y0}GM Easy method B. Dual income, no kids method C. Formal calculation method D. Nonworking spouse method E. Family needs method, 30. Term insurance C. Whole insurance D. Variable annuity E. 401(k), 77. 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. D. Household with children. All rights reserved. Protection against loss of life for a specified term. How to estimate life insurance requirements for a non working spouse? Use Exhibit 1-B. B. Annuity Formula, Calculation & Examples | What is an Annuity? 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. A. 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. Canara HSBC Life Insurance Company Limited is only the name of the insurance company and Canara HSBC Life Insurance Invest 4G is only the name of the unit linked insurance contract and does not in any way indicate the quality of the contract, its future prospects or returns. A. A. Incontestability clause B. Misstatement of age provision C. Naming a beneficiary D. Policy reinstatement E. The grace period. 12-3 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. \textbf{(amounts in thousands)}\\ It provides both a death benefit and a savings component. B. This is a method that has you adding half of all your debts plus funeral expenses. The big question is how much term life insurance for the non-working spouse (or stay-at-home parent) you should have. \qquad\text{Total net assets}&&\underline{\text{\hspace{5pt}333,940}}\\ Factors That Affect Life Insurance Premiums 1. If you have a multiyear level term policy, A. C. Policyholder. The monthly survival benefit mentioned is an example of Life Assured opting for Sum Assured as 1Cr under Life Secure with Income plan option. Megan wants to purchase a life insurance policy that will allow her to invest in stock. 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. Step 1 Non-working spouse method: This method is form of insurance coverage that allows you to s. Contract. nonworking spouse whose youngest child is 5 years old? old? B. Dun & Bradstreet. What is their total insurance need using the DINK method? Purchasing a life insurance policy is a basic and inexpensive task. They have determined that their annual income is $70,000 and their net worth is now $150,000. Each plans to continue to work after the other one dies. Bill is worried about being able to pay his premium if he is totally and permanently disabled before age 60. Which of the following statements is correct? E. An immediate annuity allows an individual to receive payments from an annuity beginning at once. 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. 24. Now, you take this number and subtract your available assets from this number. Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits, 64. The income replacement approach is a method of determining the amount of life insurance you should purchase. Annuities are often purchased for A. E. Independently wealthy adult. How much storage space is required? Do both you and your spouse need life insurance? When deciding the right amount of coverage required for your spouse, everyones need may be different. $140,000 B. 47. 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. E. No interest will accumulate for any loans related to life insurance. Limited installment payment. A. \quad\text{Accounts payable and accrued liabilities}&&\text{\$\hspace{5pt}21,130}\\ A. Group life C. Limited life D. Universal life E. Variable life, 49. the near future. Using the "nonworking" spouse method, what should, be the life insurance need for a family whose youngest, 95. What impact do they have on your wealth potential. Important Life Insurance Policy Provisions, After-Tax Rate of Return: Definition & Formula, Standard Deviation of Returns | Overview, Investment Volatility & Formula. A. Which of the following is NOT important when buying life insurance? 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. How do I know if my life insurance has cash value? 79. 43. The first is the easy method. 2003-2023 Chegg Inc. All rights reserved. C. Administrative fee. A. A. Group life C. Limited life D. Universal life E. Variable life, 50. Limited installment payment. Also, if you try to make up some of that yourself, you lose income and income potential. E. Pay taxes. \quad\text{Total assets}&&\underline{\underline{\text{\$\hspace{1pt}455,670}}}\\[5pt] B. 71. \text{Prepaid assets}&&\text{1,364}\\ She was recently divorced. $30,000 B. 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. Here's how to calculate the estimated life insurance need: 1. E. All of these. insurance needs for a family whose youngest child is 5 years Life insurance companies pay out the proceeds when the insured dies and the beneficiary of the policy files a life insurance claim. 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. C. Moodys. insurance needs for a family whose youngest child is 5 years Buying from a financially strong company B. Another name for a straight term policy is A. Renewable term. B. Further, you estimate that your funeral will cost $6,000. TERMS OF SERVICE One of the most common questions we hear is, Can my non-working spouse qualify for life insurance? The answer is yes! B. Types of Life Insurance $140,000 B. Your annual premium is $1,000. This method has you multiplying your annual gross income by 70% and then multiplying that by 7. 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. Something went wrong. The simplest method for estimating your clients' life insurance needs is the multiple-of-income approach. 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. Tim and Allison are married and have two children, ages 4 and 7. 5EPhGD!A'b1^:x[)(2##19pH`G0v#/(5;dI(D Use to work after your death. 5 days. Not necessarily. \textbf{June 30, 2019}\\ E. All of these affect the price. 25,00,000 which will remain same throughout the Policy Term. Try refreshing the page, or contact customer support. You can convert your policy to a permanent type at the end of the term. You may need to change your coverage amounts when this happens. Which method are they using to determine their life insurance needs? Jeff Willis has five kids and more debt than the, average family. The last thing to realize is that calculating your life insurance needs can be tricky. Can you get life insurance on a spouse? Find the symmetric intervals around the mean of 175mg/dL175 \mathrm{mg} / \mathrm{dL}175mg/dL that respectively include the cholesterol levels of 68.3%,95.4%68.3 \%, 95.4 \%68.3%,95.4%, and 99.7%99.7 \%99.7% of all children. 5. She has since died. C. Final life payment. 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. 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. 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. Allison is a "nonworking" spouse who devotes all of her time to household activities. This last method is called the family need method. This method is used only to calculate child care needs, not the total financial needs of the family. D. Your premium will not increase when you renew it. Which of the following policies would meet her needs? The DINK method has you adding half of all your debts to your funeral expenses. 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? Tim and Allison are married and have two children, ages 3 and 6. Purshe Kaplan Sterling Investments and Smallwood Wealth Investment Management, LLC are not affiliated companies. This website helped me pass! Time Value of Money Formula & Examples | What is Time Value of Money? Ask a Family Member's Financial Advisor. 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. Dividend policy B. Nonparticipating policy C. Mutual policy D. Participating policy E. Stock policy. 2,10,000, (excluding taxes) premium payment term 10 years and policy term 20 years. This problem has been solved! Suppose you are 45 and have a $50,000 face amount, 15-year, limited-payment, A. Renewable term B. Multiyear level term C. Decreasing term D. Limited payment E. Single year term. Related to the expenses incurred: prepaid assets of $534 were used,$4,776 of the expenses were accrued, and the remaining expenses were paid. You policy will continue for one year. More thorough because it also considers employer provided insurance, Social Security benefits, and liquid assets. Using the nonworking spouse method, what should be the life Which of the following statements is incorrect? False. Investment Advisory Services provided by Smallwood Wealth Investment Management, LLC, an SEC registered investment advisor. 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. 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} There are many situations to consider, and the methods you just heard about may or may not fit your needs. Plus, get practice tests, quizzes, and personalized coaching to help you A Limited Payment Policy is a while life policy that requires premiums to be paid for a certain period. If you want to purchase term insurance, you will receive all of the following except A. Your spouse expects to continue If one should die, they think that funeral expenses would be $12,000. T&C Apply. Find the CpC_pCp and CpkC_{pk}Cpk capability indexes if. B. Multiyear level term. Fixed Annuities are long-term insurance products. What happens if you dont get life insurance? C. Convertible term. C. It is more expensive than term insurance. Insurance Need: ? Surrender charge. \text{Pledges receivable (net of doubtful accounts of \$280)}&&\text{5,872}\\ 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. 73. The Tax Reform Act of 1986 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. It also collected $820 of Pledges Receivable that were unrestricted. 68. 25,00,000 which will remain same throughout the Policy Term. Academic support 23,300 E. Proceeds left with the company. Marianne and Roger are in good health and have reasonably secure careers. E. Your premium will be higher than a whole life policy premium. 48. Which method are they using to determine their life insurance needs? \text{Tuition and fees receivable (net of doubtful accounts of \$12)}&&\text{230}\\ The "Family Need" Method. How much term does a non-working spouse get? Insurance Need: . 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. B. But from a financial perspective, it does not have to be a crisisif you have good planning. Collect premiums for the insurance contract. 40. C. The policy will return all premiums if you survive to the end of the policy. It equals the cost of replacing the property. Can you buy life insurance for someone who is dying? The Policy Term, Premium Payment Term and the premium payment mode remains the same for the Spouse, as yours. Easy method C. DINK method D. Family need E. Soccer mom 95. B. The average cost of life insurance is $27 a month. Which of the following is the process of getting oxygen from the environment to the tissues of the body? B. But life insurance rates can vary dramatically among applicants, insurers and policy types. B. Life insurance companies understand that taking care of the home is invaluable and is equally important as earning an income for the household. DINK stands for double income, no kids. Whole life. A. 51,84,468 which includes Guaranteed Sum Assured on Maturity, accrued Guaranteed Yearly Additions and Guaranteed Loyalty Addition. Work with our consultant to learn what to alter. refunds of$11,200 were given. A. Besides getting money into the family, the non-working spouse holds a responsibility for everything that doesnt offer bonus, perks, and promotions. method, what should be your need for life insurance? c. the charge per 100 pounds to ship goods by truck 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. loans. Insurance Premium To go deeper on the insights from Smallwood Wealth Management, request your FREE COPY of. 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. Past performance of the investment funds do not indicate the future performance of the same. What. Term insurance C. Whole life insurance D. Variable annuity E. 401(k). T&C apply. The first method is called the easy method. E. Weiss Research. - Definition & Examples, Strategies for Effective Consumer Relations, Cross-Selling in Retail: Techniques & Examples, Working Scholars Bringing Tuition-Free College to the Community. Which of the following provisions will affect the amount of money his beneficiaries will receive? Insurance Contract Characteristics | Traits Specific to Insurance Contracts, Future Value Formula & Examples | How to Calculate Future Value. You have to drive them to and from school, oversee homework and music practice. Who will receive the benefits from her policy? A. Adjustable life B. C. Your premium will be the same for the duration of your policy. You and your spouse are in good health and have reasonably secure jobs. Single adult living alone. It accumulates cash value. Allison is a "nonworking" spouse who devotes all of her time to household activities. For example, say you have a remaining mortgage of $30,000, a credit card balance of $11,000, and a personal loan of $5,000. Ask to set up a Wealth Curve conversation. He has since died. 67. What method. Benefits of Life Insurance 700 cartons to be stored. It helped me pass my exam and the test questions are very similar to the practice quizzes on Study.com. method, what should be your need for life insurance? They own a home with a $125,000 mortgage; they owe $25,000 for their car loans and have $22,000 in student loans. NOT INSURED BY ANY STATE OR FEDERAL AGENCY. Using Exhibit 12-1, determine the life expectancy of a 40-year-old male. Using the "nonworking" spouse method, what should be the life insurance needs for a family whose youngest child is 5 years old? 26. All guarantees are based on the continued claims paying ability of the issuing company. $343,000 C. $490,000 D. $700,000 E. $750,000, 86. Is equipment floater the same as inland marine? In this episode, John continues his series on the. \text{Liabilities:}\\ What kind of policy would you want to purchase? 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. How to Buy Life Insurance: Steps & Choices, App. Donald and Charlene are married and do not have any children. Steiner is a private college. 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.
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