$12,000 in 15 years. B. 60. Which method are they using to determine their life insurance needs? 2,10,000, (excluding taxes) premium payment term 10 years and policy term 20 years. When deciding the right amount of coverage required for your spouse, everyones need may be different. A. Types of Life Insurance 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 return on its investments. Bill is worried about being able to pay his premium if he is totally and permanently disabled before age 60. Limited installment payment. Purchasing a life insurance policy is a basic and inexpensive task. determine the minimum amount of life insurance you should carry. Easy method B. Dual income, no kids method C. Formal calculation method D. Nonworking spouse method E. Family needs method, 30. DINK stands for double income, no kids. Nonworking spouse method is a type of insurance policy where without working you can support your children until they turn 18 years old. \quad\text{Accounts payable and accrued liabilities}&&\text{\$\hspace{5pt}21,130}\\ 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. \text{Cash and cash equivalents}&&\text{\$\hspace{18pt}734}\\ Using the "nonworking" spouse method, what should be the life insurance need for a family whose youngest child is 10 years old? Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits, 63. 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. Another name for temporary life insurance is A. A. A term insurance plan will also help to save taxes on the premiums under Section 80C of the IT Act. C. Policyholder. B. E. Proceeds left with the company. money elsewhere for a 7 percent annual yield, calculate the net cost of insurance. C. Final life payment. The average cost of life insurance is $27 a month. The maturity benefit is Rs. D. Fund expense. Protection against loss of life for a specified term. It helped me pass my exam and the test questions are very similar to the practice quizzes on Study.com. Unit linked Insurance products are different from the traditional insurance products and are subject to the risk factors. Agency Problem in Finance Overview, Duties & Examples | What is the Agency Problem? Create your account, 18 chapters | \quad\text{Unearned revenue}&&\text{900}\\ 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. 82. Under the Multiple of Income method of estimating, life insurance needs, what important factor is excluded, 98. Student services 37,700 False. What kind of policy is he planning to purchase? The rule of 70 is a means of estimating the number of years it takes for an investment or your money to double. D. Help you select the proper kind of protection within your financial boundaries. $343,000 C. $490,000 D. $700,000 E. $750,000, 85. 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. nonworking spouse whose youngest child is 6 years old? 700 cartons to be stored. 3 days. Ask to set up a Wealth Curve conversation. Required Reserve Ratio Formula | How to Calculate Required Reserves, Monthly Payment Formula | How to Calculate Loan Payments. Another name for a straight term policy is A. Renewable term. $196,000 C. $280,000 D. $400,000 E. $430,000, 83. This is a method that has you adding half of all your debts plus funeral expenses. Of the following, which one is the most positive feature of whole life insurance? The sooner a person is likely to die, the lower the premiums he or she will pay. What is your life insurance need using the DINK method? Shaan and Anita are married and have two children, ages 4 and 7. Securities offered through Purshe Kaplan Sterling Investments, MemberFINRA/SIPCHeadquartered at 80 State Street, Albany, NY 12207. You have no other debt. A deferred annuity allows an individual to receive payments from an annuity at some future date. you owe $11,000 on car loans, $2,000 in personal debt, and $3,000 in credit card How long is the grace period for health insurance policies with monthly due premiums? But from a financial perspective, it does not have to be a crisisif you have good planning. Marianne and Roger are in good health and have reasonably secure careers. Estimate how much life insurance Shaan and Anita should carry. The death benefit will be increased by the amount of an outstanding policy loan. D. The beneficiary can borrow any amount up to the total benefit. NOT FDIC INSURED. 'QP2?^03dw 6x ;!;RTkz}Sc;)iI The total debts of you and your spouse include the following: mortgage, $200,000; auto loan, $16,000; credit card balance, $2,000; and personal debts of $4,000. B. True. \textbf{Liabilities and Net Assets}\\ E. Weiss Research. Term C. Credit life D. Endowment life E. Adjustable life, 53. 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. STEINERCOLLEGEStatementofFinancialPositionJune30,2019(amountsinthousands)\begin{array}{c} Dividend policy B. Nonparticipating policy C. Mutual policy D. Participating policy E. Stock policy, 34. Preserved the tax advantage of annuities but curtailed deductions for IRAs. Ag;sE2/yNNF;eF]!hiV^r^l PK ! D. Decreasing term. Money Market | Graph, Demand Curve & Model, Rate of Return Formula & Examples| How to Calculate the Rate of Return, Bank Liabilities & Assets | Overview, Differences & Examples, How to Choose a Career: Guidance Counseling, Principles of Macroeconomics: Certificate Program, Principles of Microeconomics Syllabus Resource & Lesson Plans, AEPA Economics (AZ035): Practice & Study Guide, Holt McDougal Economics - Concepts and Choices: Online Textbook Help, DSST Personal Finance: Study Guide & Test Prep, Hawaii Real Estate Salesperson Exam: Study Guide & Practice, CPA Subtest III - Financial Accounting & Reporting (FAR): Study Guide & Practice, Glencoe Earth Science: Online Textbook Help, Holt McDougal Algebra 2: Online Textbook Help, McDougal Littell Algebra 2: Online Textbook Help, Create an account to start this course today. Allison is a "nonworking" spouse who devotes all of her time to household activities. 1. You own a home with a mortgage of $110,000, and If their youngest child is 5 years old, how much do they need? Easy method B. Dual income, no kids method C. Formal calculation method D. Nonworking spouse method E. Family needs method, 28. 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} Which of the following riders should she consider? When assessing a client with partial-thickness burns over 60% of the body, which finding should the nurse report immediately? 5 days. 37. This is a method that has you adding half of all your debts plus funeral expenses. Life expectancy for men is longer than that for women. Estimate how much life insurance Tim and Allison should carry. For more details on risk factors, terms and conditions please read the Sales Brochure carefully before concluding a sale. The policy loan provision means that A. Work with our consultant to learn what to alter. Allison is a "nonworking" spouse who devotes all of her time to household activities. The Policy Term, Premium Payment Term and the premium payment mode remains the same for the Spouse, as yours. But from a financial perspective, it does not have to be a crisisif you have good planning. Past performance of the investment funds do not indicate the future performance of the same. C. Ordinary life. Which of the following policies should she buy? Goods & Services Tax will be charged on the premium amount. B. 76. is =1.25\sigma = 1.25=1.25. A. Straight life. It equals the cost of replacing the property. Annuities are often purchased for A. A. Protect the people who depend on the insured from financial losses caused by his or her death. B. You must pay interest on any loans. 2.Guaranteed Benefits - Provided all premiums have been paid as and when due and the policy is in-force. C. Final life payment. Insurance needed. 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. TERMS OF SERVICE Your premium may increase if you continue it for another term because you will be older. \qquad\text{Total liabilities}&&\text{127,730}\\[3pt] This method is used only to calculate child care needs, not the total financial needs of the family. Judy and James have a 4-year-old child. Plus, get practice tests, quizzes, and personalized coaching to help you 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. Group life C. Limited life D. Universal life E. Variable life, 49. 43. D. Life income option. If one should die, they think that funeral expenses would be $12,000. B. As a member, you'll also get unlimited access to over 88,000 Jeff and Erica have two children. B. C. Administrative fee. Which method are they using to determine their life insurance needs? Which of the following statements is correct? 70. D. Her parents. Which method are they using to determine their life insurance needs? Please know the associated risks and the applicable charges, from your insurance agent or the intermediary or policy document issued by the insurance company. A. A. Read this lesson to learn what methods you can use to calculate your requirements. B. Replacement value is a method for determining what an insurance company will pay you in case your property is stolen or destroyed. 99. A. Which of the following is a charge you will pay when you purchase a variable annuity? You and your spouse are in good health and have reasonably secure jobs. Do both you and your spouse need life insurance? Which of the following allows an individual to receive a fixed amount of income over a certain period of time, or over his or her life? B. The question is, how big are yours? Diffusion Let us complete them for you. 73. What kind of policy would she want to purchase? 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. Variable life C. Universal life D. Adjustable life E. Decreasing term life. Prepare journal entries in good form to record the foregoing transactions for the year ended June 30, 2020. Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits, 61. During the year, charges for tuition and fees were $244,500; scholarships were$16,300; and tuition waivers for scholastic achievement were $5,100. You can convert your policy to a permanent type at the end of the term. 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. The "Nonworking" spouse method of estimating life insurance includes factors such as Social Security and liquid assets. . This method has you multiplying the number of years it takes the youngest child to reach 18 by $10,000. If the policy exists, you can ask if you're a beneficiary. The "Family Need" Method. Mildred was diagnosed with terminal cancer and knows that she doesnt have long to live. Non-Working Spouse Method. A. Waiver of premium disability benefit B. 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. 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. D. Life income option. What is the most important part of an insurance agents job? 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. This method is called the non-working spouse method. The first is the easy method. 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. Claim Settlement Ratio Using time value of money and assuming you could invest your 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 . Term insurance C. Whole insurance D. Variable annuity E. 401(k), 77. DESIGNED BY: INTERSOFT ASSOCIATES. All rights reserved. What is the amount of life insurance they should carry using the "nonworking" spouse method? More thorough because it also considers employer provided insurance, Social Security benefits, and liquid assets. Suppose you are 45 and have a $50,000 face amount, 15-year, limited-payment, 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. 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. They have determined that their annual income is $70,000 and their net worth is now $150,000. 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. There are many situations to consider, and the methods you just heard about may or may not fit your needs. 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. C. Temporary insurance. 4.Tax benefit of Rs. This method is called the non-working spouse method. The "Nonworking" spouse method of estimating life insurance includes factors such as Social Security and liquid assets. B. Likewise, when using the rule of 72, the number 72 is used in the calculation. She, wants to determine her insurance needs. The following transaction information (amounts in thousands) pertains to the year ended June 30, 2020. Dividend policy B. Nonparticipating policy C. Mutual policy D. Participating policy E. Stock policy, 33. \quad\text{Deposits held in custody for others}&&\text{700}\\ 41. E. Independently wealthy adult. Donald and Charlene are married and do not have any children. The Wealth Curve Talk with John L. Smallwood. And, lastly, the family need method is 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 from it. 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. Fixed annuity B. The settlement option in which the company acts as trustee and pays interest to the beneficiary is called A. Lump-sum payment. 75. 5. In this case, 18 years. Which of the following provisions should she take action on? Fixed Annuities are long-term insurance products. Best Investment Options in India Amy bought a life insurance policy and named Ben as her beneficiary. A. Incontestability clause B. Misstatement of age provision C. Naming a beneficiary D. Policy reinstatement E. The grace period, 55. c. the charge per 100 pounds to ship goods by truck $12,000 B. This is a very common type of policy taken by homeowners who want to support their children financially. An immediate annuity allows an individual to receive payments from an annuity beginning at once. If you have a multiyear level term policy, A. Get unlimited access to over 88,000 lessons. Adult child living with parents. \textbf{Statement of Financial Position}\\ You have a spouse, two kids, a dog and a mortgage - a typical family. Tax benefits/savings are subject to provisions under section 80 C, 80 CCC, 80 D, 10(10A), 10(10D) and other sections of the Income Tax Act, 1961. When you're ready to purchase life insurance, you'll need to decide what coverage amount you need so that all your financial obligations and needs are met upon your death. You have to drive them to and from school, oversee homework and music practice. Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits, 62. A. \quad\qquad\text{Total liabilities and net assets}&&\underline{\underline{\text{\$\hspace{1pt}455,670}}}\\ Whether you're married, domestic partners or simply sharing a life with someone you love, taking out a pair of affordable term life insurance policies can provide both financial security and peace of mind. '`Wb L@b[[s8M,I=s:sr<3Y=w0&)_f& (_X>pO&|`r;ZXeEP4DDi_/%"M{s1&E^}W>f,Kc,$vt ls-`p]s+>hBQ/nmBNO`majcNz@vr2LvDZ \NTef9F+ E. Cash value life. D. Standard & Poors. E. No interest will accumulate for any loans related to life insurance. You may not purchase insurance once your term ends. C. It is more expensive than term insurance. Using the DINK method, what should be your need for life insurance? Please consult your independent tax advisor for details. A. A. Adjustable life B. An error occurred trying to load this video. Steiner is a private college. It provides both a death benefit and a savings component. Which of the following products allows an individual to receive payments beginning now? 25. Multiply the income . The recommendation is to have seven to ten years of life insurance. Investors in the Scheme are not being offered any guaranteed / assured returns. 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. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these funds, their future prospects and returns. 25% C. 50% D. 75% E. 95%, 32. He forgot to tell them that he had a heart condition, and, as a result of that condition, he recently died. Life insurance policies, even joint policies, are rated based on your age, health conditions and coverage amount. Now, you take this number and subtract your available assets from this number. Stephanie is the wage earner in a "typical family" with $40,000 gross annual income. The provisions of Income Tax Act, 1961 are subject to amendments made by the government from time to time. Benefits of Life Insurance Each of you One of the most common questions we hear is, Can my non-working spouse qualify for life insurance? The answer is yes! It accumulates cash value. E. All of these. A. Adjustable life B. We are living in times of uncertainty. But life insurance rates can vary dramatically among applicants, insurers and policy types. A. Waiver of premium disability benefit B. Can someone be denied homeowners insurance? 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 The monthly survival benefit mentioned is an example of Life Assured opting for Sum Assured as 1Cr under Life Secure with Income plan option. Which of the following provisions will affect the amount of money his beneficiaries will receive? Sum Assured fixed at Rs. The Policy will terminate after payment of this benefit. This is a method that has you multiplying the number of years it takes the youngest child to reach 18 by $10,000. 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. 36. Can I stay on my parents insurance if I file taxes independently? B. Mortality and expense risk charge. Insurance Need: . \textbf{STEINER COLLEGE}\\ 35. This problem has been solved! B. 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. 1.5 lacs under Income Tax Act, 1961 and tax benefit may vary from assessee to assessee. the income provider's salary. The policy terminates only after the sum assured on death or diagnosis of Terminal Illness of the second life, or on maturity of the policy term, thereafter. A. Renewable term B. Multiyear level term C. Decreasing term D. Limited payment E. Single year term. Most people buy life insurance to A. Of course, it would be a tragedy were something to happen to your spouse. With an available asset of $500,000 in savings, your life insurance requirement is $1,355,000 - $500,000 = $855,000. Please check your entries and try again. Which of the following is NOT important when buying life insurance? Life Insurance Riders in Insurance \text{Pledges receivable (net of doubtful accounts of \$280)}&&\text{5,872}\\ D. The policy features. Nonworking spouse method is a type of insurance policy where without working you can support your children until they turn 18 years old. 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. What is the amount of life insurance they should carry using the easy method? If, for example, your account earns 4 percent, divide 72 by 4 to get the number of years it will take for your money to double. When using the rule of 70, the number 70 is used in the calculation. This method has you multiplying your annual gross income by 70% and then multiplying that by 7. I feel like its a lifeline. Which of the following is NOT a feature of whole life insurance? What is Life Insurance? 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. Term insurance B. B. ^Individual death claims settled and reported in public disclosures for FY 2021-22. Which of the following statements is correct? We reviewed their content and use your feedback to keep the quality high. Georgia was supposed to pay her premium by the 15th of the month. A deferred annuity allows an individual to receive payments from a life insurance policy immediately. It will have a lower coverage amount and a waiting period (usually 2 year). Your needs will also change over time, so your life insurance needs may also change over time. C. Identified annuities to be the same as certificates of deposit. Your premium will not increase when you renew it. 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. Insurance Contract Characteristics | Traits Specific to Insurance Contracts, Future Value Formula & Examples | How to Calculate Future Value. 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.
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