If you want to purchase term insurance, you will receive all of the following except A. 75. B. 35. A. Adjustable life B. participating policy (dividends will be used to build up the cash value of the policy). A. An individual can take out a loan on his or her term policy. 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. Unit linked Insurance products are different from the traditional insurance products and are subject to the risk factors. C. You can convert your term policy to a permanent policy. B. Everyone is impacted by these 5 problems. If their youngest child is 5 years old, how much do they need? Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits, 62. A. 65. 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. One such cover by Canara HSBC Life Insurance Company is the iSelect Smart360 Term Plan. Using the nonworking spouse method, what should be the life insurance needs for a Bill is worried about being able to pay his premium if he is totally and permanently disabled before age 60. $30,000 B. E. None of these is correct. This method is meant for those with typical families where both spouses work, are in good health, with average debt, and with no more than three kids. The premium shall be adjusted on the due date even if it has been received in advance. 25% C. 50% D. 75% E. 95%, 32. Easy method B. Dual income, no kids method C. Formal calculation method D. Nonworking spouse method E. Family needs method. A. It also collected $820 of Pledges Receivable that were unrestricted. With comprehensive coverage features like accidental benefit, increasing/ decreasing cover and whole life cover, the policy also offers a Spouse cover. Estimate how much life insurance Tim and Allison should carry. Multiply the number of years until the youngest child reaches 18 by $10,000. Sell you the highest level of coverage available. Allison is a "nonworking" spouse who devotes all of her time to household activities. It helped me pass my exam and the test questions are very similar to the practice quizzes on Study.com. But life insurance rates can vary dramatically among applicants, insurers and policy types. Determine an estimated regression equation that can be used to predict the overall score given the score for Shore Excursions. When can I switch from original Medicare to an Advantage plan? Insurance Premium Which of the following riders should he consider? Agency Problem in Finance Overview, Duties & Examples | What is the Agency Problem? Amy has worked with students at all levels from those with special needs to those that are gifted. An immediate annuity allows an individual to receive payments from an annuity beginning at once. 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. I would definitely recommend Study.com to my colleagues. Please know the associated risks and the applicable charges, from your insurance agent or the intermediary or policy document issued by the insurance company. This problem has been solved! See Answer Collect premiums for the insurance contract. E. All of these affect the price. 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. C. Decreasing term. B. C. The policy will return all premiums if you survive to the end of the policy. Megan wants to purchase a life insurance policy that will allow her to invest in stock. succeed. Life insurance benefits may be used to pay off a home mortgage or other debts at the time of death. Your spouse expects to continue For example, say your immediate needs upon death are $10,000 for funeral expenses, $50,000 for emergencies, and $95,000 for mortgage, credit card, and college loans. How to estimate life insurance requirements for a non working spouse? After payment was received, tuition They plan to purchase life insurance using this formula: (18 Youngest childs age) $10,000. Using time value of money and assuming you could invest your D. 30 days. Which method are they using to determine their life insurance needs? 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). Tim and Allison are married and have two children, ages 3 and 6. DINK stands for double income, no kids. A. Incontestability clause B. Misstatement of age provision C. Naming a beneficiary D. Policy reinstatement E. The grace period, 57. $10,000 + ($30,000 / 2) + ($11,000 / 2) + ($5,000 / 2) = $10,000 + $15,000 + $5,500 + $2,500 = $33,000. Jeff and Erica have two children. Estimating Your Life Insurance Requirements(continued) The "Nonworking" Spouse Method. The death benefit will be increased by the amount of an outstanding policy loan. The ending balance in Accounts Payable and Accrued Liabilities was$1,935. A. Which of the following riders would allow her to receive cash now? Sum Assured as chosen by the Working Spouse under the Plan. You heard about several methods you can use to calculate your life insurance needs. 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. When deciding the right amount of coverage required for your spouse, everyones need may be different. But from a financial perspective, it does not have to be a crisisif you have good planning. Which of the following provisions allows her to keep her coverage if she is a couple of weeks late with paying her premium? A. Waiver of premium disability benefit B. 26. Insurance Need: . Welcome to the Wealth Curve Talk Podcast. Academic support 23,300 In many cases, the answer is yes. We look forward to speaking with you. A. Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits, 61. Another name for a straight term policy is A. Renewable term. DESIGNED BY: INTERSOFT ASSOCIATES. NOT INSURED BY ANY STATE OR FEDERAL AGENCY. c. the charge per 100 pounds to ship goods by truck C. Your premium will be the same for the duration of your policy. On occurrence of first death or diagnosis of terminal illness, to either of you, the sum assured on death corresponding to the affected life is paid and the policy continues with life cover for the other life with reduced premium. Get unlimited access to over 88,000 lessons. Institutional support 28,500. Student services 37,700 Holding Period Return (HPR) Formula & Examples | What is HPR? 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. 2,10,000, (excluding taxes) premium payment term 10 years and policy term 20 years. The question is, how big are yours? In this episode, John continues his series on the. What is a Rider on a Life Insurance Policy? In most cases in India, the non-working spouse is a woman and it may be unimaginable to account for the financial implications in case of their absence, keep aside the emotional damage. Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits, 64. $86,000 C. $98,000 D. $172,000 E. $217,000. 3 days. Jeanne wants to purchase a life insurance policy with guaranteed premiums. This is a method that has you multiplying the number of years it takes the youngest child to reach 18 by $10,000. Surrender charge. B. Renewable term. Call the State Commissioner's Office for your State. Georgia was supposed to pay her premium by the 15th of the month. 1. 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. \text{Property, plan, and equipment (net of accumulated depreciation of \$104,240)}&&\text{281,404}\\ A. PK ! E. Credit life. 97. Which method are they using to determine their life insurance needs? The investment risk in investment portfolio is borne by the policyholder. 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 person who is named to receive the benefits from an insurance policy is a(n) A. This term life policy will guarantee that you will pay the same premium for the duration of your policy. d. 28. 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. MAY LOSE VALUE, INCLUDING LOSS OF PRINCIPAL. They plan to purchase life insurance using this formula: (18 - Youngest child's age) $10,000. 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. 25,00,000 which will remain same throughout the Policy Term. Prepare journal entries in good form to record the foregoing transactions for the year ended June 30, 2020. a. a way of calculating an inventory's value \quad\text{Without donor restrictions}&\text{\$\hspace{1pt}104,000}\\ A. Your needs will also change over time, so your life insurance needs may also change over time. Each of you nonworking spouse whose youngest child is 5 years old? In most cases, the life insurance offered to the stay-at-home spouse depends on the coverage and income of the earning counterpart. C. Her contingent beneficiaries. A. What is the amount of life insurance they should carry using the "nonworking" spouse method? Dividend policy B. Nonparticipating policy C. Mutual policy D. Participating policy E. Stock policy. 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. This next method is for those with just one wage earner in the family. C. The policy owner can borrow any amount up to the cash value of the policy. Judy and James have a 4-year-old child. method, what should be your need for life insurance? Do both you and your spouse need life insurance? 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. The Rule of 72 is a calculation that estimates the number of years it takes to double your money at a specified rate of return. 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. Limited installment payment. $140,000 B. Anita is a "nonworking" spouse who devotes all of her time to household activities. \quad\text{Accounts payable and accrued liabilities}&&\text{\$\hspace{5pt}21,130}\\ Whole life. Protection against loss of life for a specified term. Todd plans to purchase a life insurance policy from a stock life insurance company. Another name for temporary life insurance is A. All rights reserved. Factors That Affect Life Insurance Premiums True. 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. The rule of 70 is a means of estimating the number of years it takes for an investment or your money to double. The policy loan provision means that A. Mortgage = $190,000; Auto loan = $10,000; Credit card balance = $2,000; and other debts = Group life B. It accumulates cash value. She, wants to determine her insurance needs. Investors in the Scheme are not being offered any guaranteed / assured returns. 45. Can you get life insurance on a spouse? For more details on risk factors, terms and conditions please read the Sales Brochure carefully before concluding a sale. 5 days. C. A life insurance policy allows the beneficiary to receive proceeds at some future date. Time Value of Money Formula & Examples | What is Time Value of Money? 38. What happens if you dont get life insurance? Riders in Insurance 66. Which of the following is NOT important when buying life insurance? 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. d. a way of shipping goods to customers Such advance premium, if any, paid by the Policyholder shall not carry any interest. \quad\text{Bonds payable}&&\underline{\text{\hspace{10pt}99,000}}\\ C. Policyholder. Which of the following riders provided an additional benefit for his heirs? Which of the following is NOT a feature of whole life insurance? Insurance Contract Characteristics | Traits Specific to Insurance Contracts, Future Value Formula & Examples | How to Calculate Future Value. A. D. The beneficiary can borrow any amount up to the total benefit. Which of the following is a charge you will pay when you purchase a variable annuity? E. Convince you to buy the policy that will pay her the highest commission. 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. A. Most participating policies are sold by: 102. Using Exhibit 12-1, determine the average numbers of additional years males alive at Stephanie is the wage earner in a "typical family" with $40,000 gross annual income. Using the DINK method, what should be your need for life insurance? - 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? \text{Tuition and fees receivable (net of doubtful accounts of \$12)}&&\text{230}\\ 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. Protect the people who depend on the insured from financial losses caused by his or her death. What happens if you don't pay your health insurance deductible? For a non-Working Spouse. Using the "nonworking" spouse method, what should, be the life insurance need for a family whose youngest, 95. 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. In order to have a valid policy, the owner must: To clearly illustrate your insurable interest. C. Final life payment. Using the easy Try refreshing the page, or contact customer support. Whole life B. Renewable term C. Convertible term D. Decreasing term E. Multiyear level. loans. Not necessarily. With the right term insurance policy in place, stay prepared for any adversity. \quad\text{Total assets}&&\underline{\underline{\text{\$\hspace{1pt}455,670}}}\\[5pt] Jeff and Erica have two children. Also, if you try to make up some of that yourself, you lose income and income potential. Your premium will not increase when you renew it. 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. 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. A. With an available asset of $500,000 in savings, your life insurance requirement is $1,355,000 - $500,000 = $855,000. age 35 may expect to live. You may not purchase insurance once your term ends. 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. \text{Prepaid assets}&&\text{1,364}\\ The return on its investments. to work after your death. Instruction$86,100 A. Adjustable life B. 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. Which of the following policies would meet her needs? E. It is better to fund an IRA, Keogh, or 401(k) before buying an annuity. E. Cash value life. They plan to purchase life insurance using this formula: Current income 7 70%. You policy will continue for one year. This is a method that has you multiplying your annual gross income by 70% and then multiplying that by 7. E. No interest will accumulate for any loans related to life insurance. D. You must pay interest on any outstanding policy loans. Dividend policy B. Nonparticipating policy C. Mutual policy D. Participating policy E. Stock policy, 34. Under the Multiple of Income method of estimating, life insurance needs, what important factor is excluded, 98. the near future. Use Exhibit 1-B. is your life insurance need based on the easy method? Whole life B. About ___ of the U.S. life insurance companies are stock companies. GST On Life Insurance E. Proceeds left with the company. The "Nonworking" spouse method of estimating life insurance includes factors such as Social Security and liquid assets. C. Your premium will not increase because your policy is renewable. \text{Net assets:}\\ money elsewhere for a 7 percent annual yield, calculate the net cost of insurance. Earnings Per Share Overview & Formula | How to Calculate EPS, Capital Budgeting Decisions | Examples, Techniques & Analysis, Activity-Based Costing | Formula, Examples & Benefits. You and your spouse are in good health and have reasonably secure jobs. What. D. Spend money. Purshe Kaplan Sterling Investments and Smallwood Wealth Investment Management, LLC are not affiliated companies. Life expectancy for men is longer than that for women. 58. You should be able to collect the life insurance payout within 30 to 60 days after you have submitted the completed claim forms and the supporting documents. nonworking spouse whose youngest child is 5 years old? Is equipment floater the same as inland marine? The recommendation is to have seven to ten years of life insurance. D. Standard & Poors. E. All of these. 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. TERMS OF SERVICE 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 Expenses incurred resulted in the release of $7,320 in net assets with donor restrictions. A term insurance plan will also help to save taxes on the premiums under Section 80C of the IT Act. Which of the following policies would meet her needs? Suppose that yours is a typical family. 96. 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. \quad\text{Unearned revenue}&&\text{900}\\ $140,000 B. Which statement is correct regarding mutual life. B. A. Waiver of premium disability benefit B. A Limited Payment Policy is a while life policy that requires premiums to be paid for a certain period. Easy method B. Dual income, no kids method C. Formal calculation method D. Nonworking spouse method E. Family needs method, 29. $18,000 C. $50,000 D. $130,000 E. $180,000, 84. The DINK method has you adding half of all your debts to your funeral expenses. Pam just started working at XYZ Widget Company and finally wants to get insurance coverage. What is the cost of living in California? Shaan and Anita are married and have two children, ages 4 and 7. Buying from a financially strong company B. 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} All other trademarks and copyrights are the property of their respective owners. refunds of$11,200 were given. Secondly, consider the value of the unpaid work done by a spouse who spends much of their time raising children. You have no other debt. Related to the expenses incurred: prepaid assets of $534 were used,$4,776 of the expenses were accrued, and the remaining expenses were paid. 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.