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. \quad\text{Deposits held in custody for others}&&\text{700}\\ 51,84,468 which includes Guaranteed Sum Assured on Maturity, accrued Guaranteed Yearly Additions and Guaranteed Loyalty Addition. \quad\text{Bonds payable}&&\underline{\text{\hspace{10pt}99,000}}\\ Most people buy life insurance to A. E. Your premium will be higher than a whole life policy premium. It will have a lower coverage amount and a waiting period (usually 2 year). Likewise, when using the rule of 72, the number 72 is used in the calculation. Which of the following statements is incorrect? E. Whole life insurance plans. In this case, 18 years. D. Allowed annuities to be purchased for individual retirement accounts. \text{Short-term investments}&&\text{7,666}\\ Estimating Your Life Insurance Requirements(continued) The "Nonworking" Spouse Method. Now, you take this number and subtract your available assets from this number. C. Your premium will be the same for the duration of your policy. 80. All guarantees are based on the continued claims paying ability of the issuing company. 97. Easy method B. Dual income, no kids method C. Formal calculation method D. Nonworking spouse method E. Family needs method. A. Fixed annuity B. Purshe Kaplan Sterling Investments and Smallwood Wealth Investment Management, LLC are not affiliated companies. you owe $11,000 on car loans, $2,000 in personal debt, and $3,000 in credit card For example, say. \textbf{Liabilities and Net Assets}\\ \quad\text{Total assets}&&\underline{\underline{\text{\$\hspace{1pt}455,670}}}\\[5pt] This is a method that has you multiplying the number of years it takes the youngest child to reach 18 by $10,000. \qquad\text{Total liabilities}&&\text{127,730}\\[3pt] In other words, you will have to show why you want to insure the individual. 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A term insurance plan will also help to save taxes on the premiums under Section 80C of the IT Act. But from a financial perspective, it does not have to be a crisisif you have good planning. A. Adjustable life B. Is equipment floater the same as inland marine? What will be the surrender value of LIC policy after 5 years? Using the DINK method, what should be your need for life insurance? You add these numbers together: $10,000 + $50,000 + $95,000 + $800,000 + $400,000 = $1,355,000. Try refreshing the page, or contact customer support. Francisco and Maria have three children and want to complete a detailed worksheet to determine the amount of life insurance they need to purchase. Jumping the Wealth Curve with Edward E. Bao Jr. Using the "nonworking" spouse method, what should be the life insurance need for a family whose youngest child is 10 years old? 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. $343,000 C. $490,000 D. $700,000 E. $750,000, 86. Suppose you are 45 and have a $50,000 face amount, 15-year, limited-payment, What is your life insurance need using the DINK method? B. Protect the people who depend on the insured from financial losses caused by his or her death. 75. C. Your premium will not increase because your policy is renewable. Catherine Carey has made the choice to stay home and raise her three kids while her husband works. When can I switch from original Medicare to an Advantage plan? Securities offered through Purshe Kaplan Sterling Investments, MemberFINRA/SIPCHeadquartered at 80 State Street, Albany, NY 12207. Watch on to see what they are. Which of the following life insurance policies should she apply for? 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Which of the following provisions should she take action on? Your surviving family's ongoing needs are $800,000 for your spouse's needs, and your dependent children's needs are $400,000 for a limited period of time. $140,000 B. Your annual income is $60,000. After you purchase a life insurance contract, you have a "free look" period that lasts A. Sum Assured as chosen by the Working Spouse under the Plan. Life expectancy for men is longer than that for women. Allison is a "nonworking" spouse who devotes all of her time to household activities. method, what should be your need for life insurance? 68. The income replacement approach is a method of determining the amount of life insurance you should purchase. A. 81. E. None of these. You have to drive them to and from school, oversee homework and music practice. Pay off a mortgage. Insurance needed. 70. Life insurance companies issue a lot of paperwork. Which of the following is NOT important when buying life insurance? Besides getting money into the family, the non-working spouse holds a responsibility for everything that doesnt offer bonus, perks, and promotions. You must pay interest on any loans. E. Convince you to buy the policy that will pay her the highest commission. 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. 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. The investment risk in investment portfolio is borne by the policyholder. - Definition, History & Examples, Stealth Advertising: Definition & Examples, What is Crowdsourcing? A. Jeff Willis has five kids and more debt than the, average family. D. Limited payment. T&C Apply. Both you and the spouse are covered throughout the policy term for your respective separate sums assured. 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. ^Individual death claims settled and reported in public disclosures for FY 2021-22. Quickly and professionally. Insurance Need: . to work after your death. 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. They plan to purchase life insurance using this formula: Current income 7 70%. You own a home with a mortgage of $110,000, and Whole life B. Limited installment payment. Life insurance benefits may be used to pay off a home mortgage or other debts at the time of death. 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. After payment was received, tuition An individual can take out a loan on his or her term policy. To unlock this lesson you must be a Study.com Member. Work with our consultant to learn what to alter. A. Incontestability clause B. Misstatement of age provision C. Naming a beneficiary D. Policy reinstatement E. The grace period, 56. Allison is a "nonworking" spouse who devotes all of her time to household activities. This is a method that has you multiplying your annual gross income by 70% and then multiplying that by 7. Riders in Insurance Using the "nonworking" spouse method, what should, be the life insurance need for a family whose youngest, 95. 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. $343,000 C. $490,000 D. $700,000 E. $750,000, 85. \textbf{(amounts in thousands)}\\ E. The policy requires that you pay a specified premium each year for the rest of your life. TERMS OF SERVICE 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? A Limited Payment Policy is a while life policy that requires premiums to be paid for a certain period. She was recently divorced. I would definitely recommend Study.com to my colleagues. 24. 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. 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. B. 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. C. Tell you why her product is better than the competitors. During the year, charges for tuition and fees were $244,500; scholarships were$16,300; and tuition waivers for scholastic achievement were $5,100. Easy method C. DINK method D. Family need E. Soccer mom 95. Plus, get practice tests, quizzes, and personalized coaching to help you In this case, the only type of life insurance policy you can buy is a guaranteed issue policy. An interest-adjusted index is a method of evaluating the cost of life insurance by taking into account the time value of money, The lower the interest-adjusted index, the lower the cost of a 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. Past performance of the investment funds do not indicate the future performance of the same. C. Identified annuities to be the same as certificates of deposit. You are the wage earner in a typical family, with $55,000 gross annual income. 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. Dividend policy B. Nonparticipating policy C. Mutual policy D. Participating policy E. Stock policy, 34. Life insurance companies do realize that taking care of the house is an equally important as earning an income for the household. 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. 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. \quad\text{Accounts payable and accrued liabilities}&&\text{\$\hspace{5pt}21,130}\\ insurance needs for a family whose youngest child is 5 years Group life C. Limited life D. Universal life E. Variable life, 51. 78. MAY LOSE VALUE, INCLUDING LOSS OF PRINCIPAL. Let's review. Which of the following policies would meet her needs? C. A life insurance policy allows an individual to receive payments from an annuity at once. \text{Tuition and fees receivable (net of doubtful accounts of \$12)}&&\text{230}\\ Please consult your independent tax advisor for details. This method is used only to calculate child care needs, not the total financial needs of the family. Nonworking spouse method is a type of insurance policy where without working you can support your children until they turn 18 years old. Limited installment payment. A. B. D. Fund expense. They have determined that their annual income is $70,000 and their net worth is now $150,000. Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits, 64. Also, if you try to make up some of that yourself, you lose income and income potential. Before you purchase, be sure to talk to your financial professional about the annuitys features, benefits, and fees and whether the annuity is appropriate for you, based on your financial situation and objectives. C. Temporary insurance. D. You can convert your policy to a permanent type at the end of the term. 79. Catherine Carey has made the choice to stay home, and raise her three kids while her husband works. You can take out a life insurance policy on your spouse if you have an insurable interest. - 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? the income provider's salary. Allison is a "nonworking" spouse who devotes all of her time to household activities. Your annual premium is $1,000. The Wealth Curve Talk with John L. Smallwood. Straight life. To go deeper on the insights from Smallwood Wealth Management, request your FREE COPY of. Fixed annuity B. 36. Please check your entries and try again. Which of the following is a poor choice for the amount of protection offered for an individual? Collect premiums for the insurance contract. 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. loans. A. Dividend policy B. Nonparticipating policy C. Mutual policy D. Participating policy E. Stock policy.