Using the "Nonworking" Spouse Method to Determine Life Insurance Needs. 81. Life insurance policies, even joint policies, are rated based on your age, health conditions and coverage amount. The Tax Reform Act of 1986 A. Option to add Optional In-Built Covers or choose a Benefit Payout Option other than Lumpsum is not available to non-Working Spouse. Using the "nonworking" spouse method, what should, be the life insurance needs for a family whose youngest, 94. 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. Which of the following statements is correct? Life insurance companies pay out the proceeds when the insured dies and the beneficiary of the policy files a life insurance claim. What is your life insurance need using the DINK method? Carton is 0.75 m by 0.6 m by 0.8 m. Now, you take this number and subtract your available assets from this number. STEINERCOLLEGEStatementofFinancialPositionJune30,2019(amountsinthousands)\begin{array}{c} She may need to change her coverage as her needs change. Dividend policy B. Nonparticipating policy C. Mutual policy D. Participating policy E. Stock policy, 33. Experts are tested by Chegg as specialists in their subject area. Dividend policy B. Nonparticipating policy C. Mutual policy D. Participating policy E. Stock policy. Whole life B. Renewable term C. Convertible term D. Decreasing term E. Multiyear level. 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. How to estimate life insurance requirements for a non working spouse? Insurance needed. B. Your premium may increase if you continue it for another term because you will be older. But from a financial perspective, it does not have to be a crisisif you have good planning. 73. 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. You have a spouse, two kids, a dog and a mortgage - a typical family. When assessing a client with partial-thickness burns over 60% of the body, which finding should the nurse report immediately? Estimate how much life insurance Tim and Allison should carry. A. 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. One such cover by Canara HSBC Life Insurance Company is the iSelect Smart360 Term Plan. A. 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. 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. U ^s1xRpbD#rYNrJC.aeD=U]Sik@X6G[:b4(uH%-+0A?t>vT9. The DINK method has you adding half of all your debts to your funeral expenses. 101. 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. In this case, the only type of life insurance policy you can buy is a guaranteed issue policy. Georgia was supposed to pay her premium by the 15th of the month. A. NOT BANK GUARANTEED. 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. After payment was received, tuition What. C. Administrative fee. Amy has worked with students at all levels from those with special needs to those that are gifted. Agency Problem in Finance Overview, Duties & Examples | What is the Agency Problem? Fred bought life insurance five years ago. C. Temporary insurance. If you want to purchase term insurance, you will receive all of the following except A. You and your spouse are in good health and have reasonably secure jobs. Is equipment floater the same as inland marine? Use the multiple of income method to Is life insurance for married couples cheaper? B. As a member, you'll also get unlimited access to over 88,000 A.M. Best. E. Single year term. 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. 58. Protection against loss of life for a specified term. E. No interest will accumulate for any loans related to life insurance. Ask to set up a Wealth Curve conversation. Group life B. Which of the following products allows an individual to receive payments beginning now? What is the cost of living in California? Term insurance C. Whole insurance D. Variable annuity E. 401(k), 77. Pam just started working at XYZ Widget Company and finally wants to get insurance coverage. A person who is named to receive the benefits from an insurance policy is a(n) A. 35. Here are the features of adding a Spouse Cover to your iSelect Smart360 Term Plan: Spouse Cover With the iSelect Smart360 Term Plan. This method has you multiplying your annual gross income by 70% and then multiplying that by 7. Fixed annuity B. Yes. Group life C. Limited life D. Universal life E. Variable life, 52. A. Incontestability clause B. Misstatement of age provision C. Naming a beneficiary D. Policy reinstatement E. The grace period. The question is, how big are yours? 97. 1. A. Waiver of premium disability benefit B. Sum Assured fixed at Rs. $50,000 C. $80,000 D. $100,000 E. $180,000 B. C. Final life payment. B. Your premium will not increase when you renew it. For more details on risk factors, terms and conditions please read the Sales Brochure carefully before concluding a sale. Mortgage = $190,000; Auto loan = $10,000; Credit card balance = $2,000; and other debts = 'QP2?^03dw 6x ;!;RTkz}Sc;)iI 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. Such advance premium, if any, paid by the Policyholder shall not carry any interest. How much term does a non-working spouse get? 82. This is a very common type of policy taken by homeowners who want to support their children financially. 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. Step 1 Non-working spouse method: This method is form of insurance coverage that allows you to s. 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! A. 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 B. If the policy exists, you can ask if you're a beneficiary. Create your account, 18 chapters | $18,000 C. $50,000 D. $130,000 E. $180,000, 84. 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. This is a method that has you adding half of all your debts plus funeral expenses. You have to drive them to their after-school activities, preparing meals, keeping the household in order, etc. Estimating Your Life Insurance Requirements(continued) The "Nonworking" Spouse Method. B. Mortality and expense risk charge. They own a home with a $125,000 mortgage; they owe $25,000 for their car loans and have $22,000 in student loans. To unlock this lesson you must be a Study.com Member. 40. A. E. Pay taxes. E. Independently wealthy adult. The first method is called the easy method. Diffusion Let us complete them for you. A. insurance needs using the DINK method. determine the minimum amount of life insurance you should carry. B. What percentage of your income should you spend on life insurance? 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. E. 60 days. Whether you're married, domestic partners or simply sharing a life with someone you love, taking out a pair of affordable term life insurance policies can provide both financial security and peace of mind. In many cases, the answer is yes. 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. Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits, 64. Collect premiums for the insurance contract. Catherine Carey has made the choice to stay home, and raise her three kids while her husband works. \quad\text{With donor restrictions}&\underline{\text{\hspace{5pt}229,940}}\\ B. Multiyear level term. the easy method to determine how much life insurance you should carry. the near future. Using the "Nonworking" Spouse Method to Determine Life Insurance Needs. A. This last method is called the family need method. Institutional support 28,500. Life expectancy for men is longer than that for women. Which of the following is NOT a feature of whole life insurance? A young employee is buying individual life insurance and is worried about the impact inflation will have on his life insurance coverage. Both you and the spouse are covered throughout the policy term for your respective separate sums assured. She was recently divorced. \quad\text{Bonds payable}&&\underline{\text{\hspace{10pt}99,000}}\\ \text{Net assets:}\\ Amy has a master's degree in secondary education and has been teaching math for over 9 years. Investment earnings received for the period were $3,960, of which$2,070 was donor restricted for scholarships. The cash value of the policy is expected to be Non-Working Spouse Method. Which of the following is a poor choice for the amount of protection offered for an individual? Futures Contract in Finance Purpose & Examples | What Are Futures? It helped me pass my exam and the test questions are very similar to the practice quizzes on Study.com. copyright 2003-2023 Study.com. Exam 3 Flashcards by Sam Cohen | Brainscape 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. This method is called the non-working spouse method. Call the State Commissioner's Office for your State. insurance needs for a family whose youngest child is 5 years Tuition waivers of $17,300 for students serving as teaching assistants for instruction were accrued. $4,000. A. Ben. Let's review. A Limited Payment Policy is a while life policy that requires premiums to be paid for a certain period. \textbf{STEINER COLLEGE}\\ A. C. A life insurance policy allows an individual to receive payments from an annuity at once. Estimate how much life insurance Tim and Allison should carry to cover Allison. B. Jeff Willis has five kids and more debt than the, average family. Replacement value is a method for determining what an insurance company will pay you in case your property is stolen or destroyed. Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits. '`Wb L@b[[s8M,I=s:sr<3Y=w0&)_f& (_X>pO&|`r;ZXeEP4DDi_/%"M{s1&E^}W>f,Kc,$vt ls-`p]s+>hBQ/nmBNO`majcNz@vr2LvDZ \NTef9F+ B. Most participating policies are sold by: 102. $30,000 B. This is also the most thorough method. E. Cash value life. C. Moodys. Which statement is correct regarding mutual life. 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. A. B. 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 Most people buy life insurance to A. Using the "nonworking" spouse method, what should, be the life insurance need for a family whose youngest, 95. What will be the surrender value of LIC policy after 5 years? Which of the following policies would meet her needs? C. Policyholder. C. Ordinary life. A deferred annuity allows an individual to receive payments from a life insurance policy immediately. 93. D. You can convert your policy to a permanent type at the end of the term. . It provides both a death benefit and a savings component. What kind of policy would you want to purchase? C. Retired couple with a pension. There are many situations to consider, and the methods you just heard about may or may not fit your needs. 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. We look forward to speaking with you. C. You can convert your term policy to a permanent policy. Course Hero is not sponsored or endorsed by any college or university. 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? 5 days. A. In other words, you will have to show why you want to insure the individual. 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. A. Nonworking spouse method is a type of insurance policy where without working you can support your children until they turn 18 years old. \text{Liabilities:}\\ The investment risk in investment portfolio is borne by the policyholder. A. Adjustable life B. 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. Limited installment payment. Enrolling in a course lets you earn progress by passing quizzes and exams. Bill is worried about being able to pay his premium if he is totally and permanently disabled before age 60. Which method are they using to determine their life insurance needs? Under this method, the original principal that you save will still remain at the end of the income period. Using the nonworking spouse method, what should be the life Life Insurance Underwriting All guarantees are based on the continued claims paying ability of the issuing company. But life insurance rates can vary dramatically among applicants, insurers and policy types. Variable life C. Universal life D. Adjustable life E. Decreasing term life. What are the stages of the General Adaptation Syndrome (GAS)? AssetsCashandcashequivalentsShort-terminvestmentsTuitionandfeesreceivable(netofdoubtfulaccountsof$12)Pledgesreceivable(netofdoubtfulaccountsof$280)PrepaidassetsProperty,plan,andequipment(netofaccumulateddepreciationof$104,240)Investments(atfairvalue,costof$162,000)TotalassetsLiabilitiesandNetAssetsLiabilities:AccountspayableandaccruedliabilitiesDepositsheldincustodyforothersUnearnedrevenueBondspayableTotalliabilitiesNetassets:WithoutdonorrestrictionsWithdonorrestrictionsTotalnetassetsTotalliabilitiesandnetassets$104,000229,940$7347,6662305,8721,364281,404158,400$455,670$21,13070090099,000127,730333,940$455,670. E. An immediate annuity allows an individual to receive payments from an annuity beginning at once. Table lamp. Single adult living alone. C: Consumer Agencies & Organizations, CLEP Financial Accounting: Study Guide & Test Prep, Introduction to Financial Accounting: Certificate Program, High School Marketing for Teachers: Help & Review, How to Choose a College: Guidance Counseling, UExcel Workplace Communications with Computers: Study Guide & Test Prep, Effective Communication in the Workplace: Certificate Program, Effective Communication in the Workplace: Help and Review, CLEP Principles of Macroeconomics: Study Guide & Test Prep, Intro to Excel: Essential Training & Tutorials, Information Systems and Computer Applications: Certificate Program, GED Social Studies: Civics & Government, US History, Economics, Geography & World, What is Whole Life Insurance? Academic support 23,300 Deferred annuity C. Whole life insurance D. Immediate annuity E. Universal life insurance. To go deeper on the insights from Smallwood Wealth Management, request your FREE COPY of. 70. E. Weiss Research. Sum Assured as chosen by the Working Spouse under the Plan. 59. - Definition & Examples, Strategies for Effective Consumer Relations, Cross-Selling in Retail: Techniques & Examples, Working Scholars Bringing Tuition-Free College to the Community. Competition among companies with comparable policies can affect the price a company charges for life insurance. You have to drive them to and from school, oversee homework and music practice. What method would probably be the best. Group life C. Limited life D. Universal life E. Variable life, 49. You heard about several methods you can use to calculate your life insurance needs. 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Chapter 10 true and false Flashcards | Quizlet D. Life income option. Under the Multiple of Income method of estimating, life insurance needs, what important factor is excluded, 98. Can you get life insurance on a spouse? Which method are they using to determine their life insurance needs? A. age 35 may expect to live. Now, if it's just you and your spouse, you can use the DINK method. Look through financial records. D. An annuity is more advisable for people in poor health than for those who are likely to live longer than average. 2,10,000, (excluding taxes) premium payment term 10 years and policy term 20 years. Factors That Affect Life Insurance Premiums Need for a Life Insurance for the Non-Working Spouse - Canara HSBC Life False. you owe $11,000 on car loans, $2,000 in personal debt, and $3,000 in credit card You may not purchase insurance once your term ends. 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. D. Your premium will not increase when you renew it. B. I feel like its a lifeline. The monthly survival benefit mentioned is an example of Life Assured opting for Sum Assured as 1Cr under Life Secure with Income plan option. Estimating Life Insurance Needs Using the DINK Method You 68. Tim and Allison are married and have two children, ages 3 and 6. 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.
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