Student services 37,700 Yes! This is a very common type of policy taken by homeowners who want to support their children financially. 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. False. B. A. Your premium may increase if you continue it for another term because you will be older. 40. PPTX Life Insurance Chapter Fourteen - University of Arkansas For example, your life insurance coverage amount will need to pay for funeral expenses, any outstanding debts, any remaining mortgage, and maybe even future financial support for a spouse or children. You must pay interest on any loans. Focus on Personal Finance: Online Textbook Help, Life Insurance Companies: Definition & Types, Psychological Research & Experimental Design, All Teacher Certification Test Prep Courses, How to Estimate Life Insurance Requirements. 26. D. A benefit during the period it covers, such as 1, 5, 10, or 20 years. A. The "Family Need" method of estimating life insurance includes factors such as Social Security and liquid assets, Mutual life insurance companies specialize in the sale of nonparticipating policies, Another name for straight term is renewable return-of-premium term, Decreasing term pays less to the beneficiary as time passes, Return-of-Premium term pays out all premiums plus interest to a beneficiary. Dividend policy B. Nonparticipating policy C. Mutual policy D. Participating policy E. Stock policy, 33. 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Mildred was diagnosed with terminal cancer and knows that she doesnt have long to live. C. It is better to fund a variable annuity before fully funding your IRA, Keogh, or 401(k). The policy loan provision means that A. Investors in the Scheme are not being offered any guaranteed / assured returns. DINK stands for double income, no kids. Earnings Per Share Overview & Formula | How to Calculate EPS, Capital Budgeting Decisions | Examples, Techniques & Analysis, Activity-Based Costing | Formula, Examples & Benefits. After payment was received, tuition refunds of$11,200 were given. 65. Goods & Services Tax will be charged on the premium amount. This is a method that has you adding half of all your debts plus funeral expenses. The death benefit will be increased by the amount of an outstanding policy loan. B. 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. $13,000 B. In this case, the only type of life insurance policy you can buy is a guaranteed issue policy. Anita is a "nonworking" spouse who devotes all of her time to household activities. D. You must pay interest on any outstanding policy loans. Benefits of Life Insurance Reasons for Life Insurance Claim Rejection, Head Office : 139 P Sector - 44,Gurugram - 122003Haryana, India, www.lifeinscouncil.org | IRDAI Registration no: 136. www.irdai.gov.in WEBNJV3CHODEC17 ENG | CIN: U66010DL2007PLC248825. makes about $38,000 annually. Using Exhibit 12-1, determine the average numbers of additional years males alive at 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. Using the DINK method, what should be your need for life insurance? Can someone be denied homeowners insurance? What is the cost of living in California? Or, you can call us at (800) 797-1000. You have to drive them to and from school, oversee homework and music practice. $18,000 C. $50,000 D. $130,000 E. $180,000, 84. 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I highly recommend you use this site! C. A life insurance policy allows an individual to receive payments from an annuity at once. Not necessarily. B. NOT FDIC INSURED. The following transaction information (amounts in thousands) pertains to the year ended June 30, 2020. Variable life C. Universal life D. Adjustable life E. Decreasing term life. 66. Which of the following life insurance policies should she apply for? Experts are tested by Chegg as specialists in their subject area. B. 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. T&C Apply. D. Life income option. $86,000 C. $98,000 D. $172,000 E. $217,000. 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. A. What is your life insurance need using the DINK method? E. Your premium will be higher than a whole life policy premium. A person who is named to receive the benefits from an insurance policy is a(n) A. method, what should be your need for life insurance? 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. E. It is better to fund an IRA, Keogh, or 401(k) before buying an annuity. - 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? We want to help you with that. C. Moodys. What kind of policy would you want to purchase? the income provider's salary. Mortgage = $190,000; Auto loan = $10,000; Credit card balance = $2,000; and other debts = 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. Jumping the Wealth Curve with Edward E. Bao Jr. 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. A. Adjustable life B. Time Value of Money Formula & Examples | What is Time Value of Money? method, what should be your need for life insurance? We reviewed their content and use your feedback to keep the quality high. Your rates will vary based on your unique circumstances, just as they would if you were single. Let's review. Ask a Family Member's Financial Advisor. The timing for payments of a variable annuity are variable. To unlock this lesson you must be a Study.com Member. Sum Assured as chosen by the Working Spouse under the Plan. 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. Required Reserve Ratio Formula | How to Calculate Required Reserves, Monthly Payment Formula | How to Calculate Loan Payments. 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. 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). Note: The categorization of Spouse into Working and Non-Working will be as per the Companys Board Approved Underwriting Policy (BAUP). E. None of these is correct. D. Your policy will have the same premium as other term policies. 45. Both you and the spouse are covered throughout the policy term for your respective separate sums assured. Academic support 23,300 Group life B. 3 days. You add these numbers together: $10,000 + $50,000 + $95,000 + $800,000 + $400,000 = $1,355,000. Income replacement is one of the main reasons many people, especially those who have loved ones depending on them financially, have life insurance. To Buy: 1800-258-5899 (9:30 AM to 6:30 PM), For Existing Policy: 1800-103-0003/ 1800-180-0003/ 1800-891-0003, Managing Director & Chief Executive Officer. Which of the following is NOT a feature of whole life insurance? E. Pay taxes. 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. Using the nonworking spouse method, what should be the life B. Whole life. Todd plans to purchase a life insurance policy from a stock life insurance company. Georgia was supposed to pay her premium by the 15th of the month. A. was specifically designed for someone in her situation? Insurance Need: ? Which of the following statements is correct? 4.Tax benefit of Rs. How to estimate life insurance requirements for a non working spouse? Contract. 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. insurance needs for a family whose youngest child is 5 years C. A life insurance policy allows the beneficiary to receive proceeds at some future date. Life insurance companies do realize that taking care of the house is an equally important as earning an income for the household. Jeff and Erica have two children. More thorough because it also considers employer provided insurance, Social Security benefits, and liquid assets. The settlement option in which the company acts as trustee and pays interest to the beneficiary is called A. Lump-sum payment. 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! Whole life B. A. succeed. Which of the following statements is incorrect? B. Carton is 0.75 m by 0.6 m by 0.8 m. C. Your premium will not increase because your policy is renewable. \text{Prepaid assets}&&\text{1,364}\\ The question is, how big are yours? The average cost of life insurance is $27 a month. You can take out a life insurance policy on your spouse if you have an insurable interest. 2.Guaranteed Benefits - Provided all premiums have been paid as and when due and the policy is in-force. B. Agency Problem in Finance Overview, Duties & Examples | What is the Agency Problem? C. It is more expensive than term insurance. Can you get life insurance on a spouse? Sum Assured fixed at Rs. $343,000 C. $490,000 D. $700,000 E. $750,000, 86. 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. There are many life circumstances you need to consider, but depending on your circumstances, there are different methods you can use to figure out your life insurance coverage requirement. Here's how to calculate the estimated life insurance need: 1. The provisions of Income Tax Act, 1961 are subject to amendments made by the government from time to time. If you have a multiyear level term policy, A. 68. B. Catherine Carey has made the choice to stay home and raise her three kids while her husband works. 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. You can convert your policy to a permanent type at the end of the term. Its like a teacher waved a magic wand and did the work for me. D. Limited payment. Which of the following provisions allows her to keep her coverage if she is a couple of weeks late with paying her premium? For more details on risk factors, terms and conditions please read the Sales Brochure carefully before concluding a sale. Catherine Carey has made the choice to stay home, and raise her three kids while her husband works. 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A. 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. Solved Problem 12-10 Using the "Nonworking" Spouse Method to | Chegg.com A.M. Best. One of the most common questions we hear is, Can my non-working spouse qualify for life insurance? The answer is yes! Which of the following products allows an individual to receive payments beginning now? In other words, if a person's death would cause you significant financial hardship, it's an insurable interest. It will take your youngest child 15 more years to reach 18. Use Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits, 64. 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. Marianne and Roger are in good health and have reasonably secure careers. Life insurance companies understand that taking care of the home is invaluable and is equally important as earning an income for the household. What kind of policy would she want to purchase? This method is called the non-working spouse method. A. D. Life income option. Need for a Life Insurance for the Non-Working Spouse - Canara HSBC Life Collect premiums for the insurance contract. 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. A. All other trademarks and copyrights are the property of their respective owners. 51,84,468 which includes Guaranteed Sum Assured on Maturity, accrued Guaranteed Yearly Additions and Guaranteed Loyalty Addition. Bonnie is most concerned about being able to buy additional insurance without undergoing medical exams. \textbf{(amounts in thousands)}\\ This method has you multiplying your annual gross income by 70% and then multiplying that by 7. 80. A Limited Payment Policy is a while life policy that requires premiums to be paid for a certain period. See Answer False. 44. 79. A. In other words, you will have to show why you want to insure the individual. C. Tell you why her product is better than the competitors. For a non-Working Spouse. Easy method C. DINK method D. Family need E. Soccer mom 95. Certificates of deposit. 81. D. It builds cash value. A deferred annuity allows an individual to receive payments from an annuity immediately. Now, you take this number and subtract your available assets from this number. \textbf{June 30, 2019}\\ 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. Judy and James have a 4-year-old child. You policy will continue for one year. Suppose you are 45 and have a $50,000 face amount, 15-year, limited-payment, The goal of this approach is to replace the primary breadwinner's salary for a predetermined number of years. You may need to change your coverage amounts when this happens. If their youngest child is 5 years old, how much do they need? Fred bought life insurance five years ago. 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. 82. The premiums & funds are subject to certain charges related to the fund or to the premium paid. E. 60 days. E. Child. $30,000 B. Limited installment payment. 200 lessons. Life insurance policies, even joint policies, are rated based on your age, health conditions and coverage amount. 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. The cash value of the policy is expected to be Preserved the tax advantage of annuities but curtailed deductions for IRAs. $140,000 B. But from a financial perspective, it does not have to be a crisisif you have good planning. 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. She may need to change her coverage as her needs change. \end{array} $12,000 B. \quad\qquad\text{Total liabilities and net assets}&&\underline{\underline{\text{\$\hspace{1pt}455,670}}}\\ \qquad\text{Total net assets}&&\underline{\text{\hspace{5pt}333,940}}\\ 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. You have a gross annual income of $62,000. Which method are they using to determine their life insurance needs? lessons in math, English, science, history, and more. insurance needs for a family whose youngest child is 5 years Your spouses cover must be useful to pay for childcare expenses and all the help you need around the house. 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. Amy has worked with students at all levels from those with special needs to those that are gifted. Fell free get in touch with us via phone or send us a message. How to Buy Life Insurance: Steps & Choices, App. E. Proceeds left with the company. A term insurance plan will also help to save taxes on the premiums under Section 80C of the IT Act. D. Term. Can you buy life insurance for someone who is dying? Its free, with no obligation. The simplest method for estimating your clients' life insurance needs is the multiple-of-income approach. Further, you estimate that your funeral will cost $6,000. Group life C. Limited life D. Universal life E. Variable life, 50. Chapter 10 true and false Flashcards | Quizlet \text{Short-term investments}&&\text{7,666}\\ The family needs approach requires you to purchase enough life insurance to allow your family to meet its various expenses in the event of your death. 25,00,000 which will remain same throughout the Policy Term. Insurance Need: . 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. fhp>5UN.es r}"n ~c|A1mHNK|i^f>Gk aYT)s7z~fO9~krcVr2@)KTQirUQ!AP+jthG;l!9|R^7|o 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. Try refreshing the page, or contact customer support. Quickly and professionally. Annuities are often purchased for A. 73. The Policy will terminate after payment of this benefit. Which of the following households most likely has the greatest need for life insurance? Tim and Allison are married and have two children, ages 3 and 6. 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. [Content_Types].xml ( Y0}GM Create your account, 18 chapters | 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. Which of the following is NOT temporary insurance? A. D. 30 days. 78. Sell you the highest level of coverage available. Tuition waivers of $17,300 for students serving as teaching assistants for instruction were accrued. 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. You can convert your policy from permanent to term at any time. Using the DINK method, what should be your need for life insurance? method for him to use to calculate his insurance needs? 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} A. Pam just started working at XYZ Widget Company and finally wants to get insurance coverage. d. 28. She, wants to determine her insurance needs. Using the "nonworking" spouse method, what should be the life insurance need for a family whose youngest child is 10 years old? Easy method B. Dual income, no kids method C. Formal calculation method D. Nonworking spouse method E. Family need method, 31. Can non-working spouses qualify for a life insurance? 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.