Under this method, the original principal that you save will still remain at the end of the income period. A. This next method is for those with just one wage earner in the family. Frank, age 38, was hit by a car and died. 24. D. Term. The first method is called the easy method. 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. Investment earnings received for the period were $3,960, of which$2,070 was donor restricted for scholarships. Purchasing a life insurance policy is a basic and inexpensive task. Using the "nonworking" spouse method, what should, be the life insurance needs for a family whose youngest, 94. Answered: Shaan and Anita are married and have | bartleby You policy will continue for one year. Which of the following statements is incorrect? C. Administrative fee. Group life C. Limited life D. Universal life E. Variable life, 51. After payment was received, tuition B. She, wants to determine her insurance needs. 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. Insurance Need: . A. Estimate how much life insurance Tim and Allison should carry to cover Allison. So your life insurance requirement is 15 $10,000 = $150,000. Table lamp. Allison is a "nonworking" spouse who devotes all of her time to household activities. It is important to replace all of the income lost when an employed family member dies when using the human-life approach. Competition among companies with comparable policies can affect the price a company charges for life insurance. Limited installment payment. \text{Pledges receivable (net of doubtful accounts of \$280)}&&\text{5,872}\\ Nonworking spouse method is a type of insurance policy where without working you can support your children until they turn 18 years old. He has since died. In other words, you will have to show why you want to insure the individual. Which of the following riders should he consider? You have to drive them to their after-school activities, preparing meals, keeping the household in order, etc. Using the "nonworking" spouse method, what should be the life insurance needs for a family whose youngest child is 5 years old? Term C. Credit life D. Endowment life E. Adjustable life, 53. All other trademarks and copyrights are the property of their respective owners. 5EPhGD!A'b1^:x[)(2##19pH`G0v#/(5;dI(D Tim and Allison are married and have two children, ages 3 and 6. What kind of policy would she want to purchase? You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Chapter 10 Personal Finance - Subjecto.com 42. 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. 101. Allison is a "nonworking" spouse who devotes all of her time to household activities. The "Nonworking" spouse method of estimating life insurance includes factors such as Social Security and liquid assets. All rights reserved. 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. \quad\text{Without donor restrictions}&\text{\$\hspace{1pt}104,000}\\ Term insurance B. C. You can convert your term policy to a permanent policy. Estimating Your Life Insurance Requirements(continued) The "Nonworking" Spouse Method. 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. 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? 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. 'QP2?^03dw 6x ;!;RTkz}Sc;)iI D. Your policy will have the same premium as other term policies. Which method are they using to determine their life insurance needs? A deferred annuity allows an individual to receive payments from an annuity at some future date. Non-Working Spouse Method. 2. Answer: 111, Using the "nonworking" spouse method, what should be the life insurance needs for a nonworking spouse whose youngest child is 5 years old? There are many situations to consider, and the methods you just heard about may or may not fit your needs. Which statement is correct regarding mutual life. Catherine Carey has made the choice to stay home, and raise her three kids while her husband works. Easy method B. Dual income, no kids method C. Formal calculation method D. Nonworking spouse method E. Family needs method. [Content_Types].xml ( Y0}GM Protection against loss of life for a specified term. A. insurance needs for a family whose youngest child is 5 years How do I know if my life insurance has cash value? A. Whole life. C. Moodys. \quad\text{Accounts payable and accrued liabilities}&&\text{\$\hspace{5pt}21,130}\\ Need for a Life Insurance for the Non-Working Spouse - Canara HSBC Life This is a method that has you adding half of all your debts plus funeral expenses. You own a home with a mortgage of $110,000, and The cash value of the policy is expected to be We reviewed their content and use your feedback to keep the quality high. What is your life insurance need using the DINK method? A process has specification limits of LSL 5 540 and USL 5 550. What is a Rider on a Life Insurance Policy? Limited installment payment. Firstly, spouses who work part-time or who do not work have insurability interest, which should be maximized. D. A benefit during the period it covers, such as 1, 5, 10, or 20 years. What kind of policy would you want to purchase? you owe $11,000 on car loans, $2,000 in personal debt, and $3,000 in credit card C. Convertible term. Jeff Willis has five kids and more debt than the, average family. When deciding the right amount of coverage required for your spouse, everyones need may be different. In many cases, the answer is yes. Diffusion Let us complete them for you. Your annual income is $100,000. 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. You have no other debt. This method is called the non-working spouse method. Experts are tested by Chegg as specialists in their subject area. D. A deferred annuity allows an individual to receive payments from a life insurance policy at some future date. $140,000 B. Life insurance is a wise purchase of all individuals. E. It is permanent life insurance. A. E. Independently wealthy adult. Secondly, consider the value of the unpaid work done by a spouse who spends much of their time raising children. D. Decreasing term. The simplest method for estimating your clients' life insurance needs is the multiple-of-income approach. The maturity benefit in form of a lumpsum benefit equal to Rs.33,19,055 is paid at the end of the 20th year, provided the policy is in-force and all due premiums have been paid. Get unlimited access to over 88,000 lessons. If you are new to Smallwood Wealth schedule a Wealth Curve Conversation here. He forgot to tell them that he had a heart condition, and, as a result of that condition, he recently died. Use the multiple of income method to $4,000. 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. participating policy (dividends will be used to build up the cash value of the policy). The most common settlement option for a life insurance program is the lump-sum payment. DINK stands for double income, no kids. When can I switch from original Medicare to an Advantage plan? The ending balance in Accounts Payable and Accrued Liabilities was$1,935. money elsewhere for a 7 percent annual yield, calculate the net cost of insurance. GST On Life Insurance This gives you 7 years of wages at 70%. 60. 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. Using the nonworking spouse method what should be the life insurance E. It is better to fund an IRA, Keogh, or 401(k) before buying an annuity. 74. 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 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. Insurance Premium Whole life B. 26. Benefits of Life Insurance Trade Logo of Canara HSBC Life Insurance Company Limited (formerly known as Canara HSBC Oriental Bank of Commerce Life Insurance Company Ltd) hereinafter referred to as "Insurer" is used under license with Canara Bank and HSBC Group Management Services Limited. The investment risk in investment portfolio is borne by the policyholder. is your life insurance need based on the easy method? Another name for permanent life insurance is A. Amy has worked with students at all levels from those with special needs to those that are gifted. 81. D. Life income option. Using time value of money and assuming you could invest your Life insurance benefits may be used to pay off a home mortgage or other debts at the time of death. 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! \textbf{Liabilities and Net Assets}\\ A. Jeff and Erica have two children. 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. 82. 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. 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. Life insurance companies do realize that taking care of the house is an equally important as earning an income for the household. Stephanie is the wage earner in a "typical family" with $40,000 gross annual income. Buying from a financially strong company B. Headquartered at 199 Broad Street, Red Bank NJ 07701-2056 D. The policy features. The goal of this approach is to replace the primary breadwinner's salary for a predetermined number of years. Group life B. A Limited Payment Policy is a while life policy that requires premiums to be paid for a certain period. Shaan and anita are married and have two children, ages 9 and - Brainly Solved Problem 12-10 Using the "Nonworking" Spouse Method to | Chegg.com method, what should be your need for life insurance? method, what should be your need for life insurance? A. True. If you have a conversion term policy, A. - Definition & Examples, Strategies for Effective Consumer Relations, Cross-Selling in Retail: Techniques & Examples, Working Scholars Bringing Tuition-Free College to the Community. PK ! If the policy exists, you can ask if you're a beneficiary. 46,800/- is calculated at the highest tax slab of 31.2%(including 4% cess) for an individual assessee on life insurance premium of Rs. Earnings Per Share Overview & Formula | How to Calculate EPS, Capital Budgeting Decisions | Examples, Techniques & Analysis, Activity-Based Costing | Formula, Examples & Benefits. What happens if you dont get life insurance? This method is called the non-working spouse method. 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. Also, if you try to make up some of that yourself, you lose income and income potential. 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.
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