What method would probably be the best. What is a Rider on a Life Insurance Policy? 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. Use Exhibit 1-B. 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. All other trademarks and copyrights are the property of their respective owners. A deferred annuity allows an individual to receive payments from an annuity immediately. 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. Estimate your total The companys cost of doing business. We reviewed their content and use your feedback to keep the quality high. She has since died. Answer . 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. E. Independently wealthy adult. D. A benefit during the period it covers, such as 1, 5, 10, or 20 years. T&C Apply. 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. Shaan and Anita are married and have two children, ages 4 and 7. Cash value. For example, say. 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 Preserved the tax advantage of annuities but curtailed deductions for IRAs. 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. E. None of these. Most people buy life insurance to A. - Definition & Examples, Strategies for Effective Consumer Relations, Cross-Selling in Retail: Techniques & Examples, Working Scholars Bringing Tuition-Free College to the Community. 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. What happens if you dont get life insurance? $196,000 C. $280,000 D. $400,000 E. $430,000, 83. Contract. Important Life Insurance Policy Provisions, After-Tax Rate of Return: Definition & Formula, Standard Deviation of Returns | Overview, Investment Volatility & Formula. A. This method is used only to calculate child care needs, not the total financial needs of the family. Insurance Premium Its free, with no obligation. Life insurance companies issue a lot of paperwork. A. Which of the following riders should he consider? 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. $50,000 C. $80,000 D. $100,000 E. $180,000 B. 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. Frank, age 38, was hit by a car and died. method for him to use to calculate his insurance needs? 41. About ___ of the U.S. life insurance companies are stock companies. E. 60 days. Beneficiary. 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. B. Multiyear level term. E. Weiss Research. Which of the following life insurance policies should she apply for? D. Limited payment. C. Her contingent beneficiaries. C. Tell you why her product is better than the competitors. The "Nonworking" spouse method of estimating life insurance includes factors such as Social Security and liquid assets. 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. Which statement is correct regarding mutual life. Which of the following policies would meet her needs? 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. She was recently divorced. The Policy will terminate after payment of this benefit. I would definitely recommend Study.com to my colleagues. Estimating Your Life Insurance Requirements(continued) The "Nonworking" Spouse Method. money elsewhere for a 7 percent annual yield, calculate the net cost of insurance. Using Exhibit 12-1, determine the average numbers of additional years males alive at b. the number of each item you have in stock What method. Estimate how much life insurance Tim and Allison should carry to cover Allison. Which of the following provisions allows her to keep her coverage if she is a couple of weeks late with paying her premium? A. Incontestability clause B. Misstatement of age provision C. Naming a beneficiary D. Policy reinstatement E. The grace period. What kind of policy would you want to purchase? 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. The ending balance in Accounts Payable and Accrued Liabilities was$1,935. 25. Allison is a "nonworking" spouse who devotes all of her time to household activities. $12,000 B. $140,000 B. Certificates of deposit. The sooner a person is likely to die, the lower the premiums he or she will pay. Which of the following statements is correct? What is their total insurance need using the DINK method? Which of the following is NOT a type of permanent life insurance? Dividend policy B. Nonparticipating policy C. Mutual policy D. Participating policy E. Stock policy. The simplest method for estimating your clients' life insurance needs is the multiple-of-income approach. Life insurance companies pay out the proceeds when the insured dies and the beneficiary of the policy files a life insurance claim. A. Incontestability clause B. Misstatement of age provision C. Naming a beneficiary D. Policy reinstatement E. The grace period, 57. A. Waiver of premium disability benefit B. A. Incontestability clause B. Misstatement of age provision C. Naming a beneficiary D. Policy reinstatement E. The grace period, 55. With an available asset of $500,000 in savings, your life insurance requirement is $1,355,000 - $500,000 = $855,000. Collection of advance premium shall be allowed within the same financial year for the premium due in that financial year However, where the premium due in a financial year is being collected in previous financial year, the premium may be collected for a maximum period of three months in advance of the due date of the premium. 40. Can you get life insurance on a spouse? B. Bens beneficiaries. Further, you estimate that your funeral will cost $6,000. Can you buy life insurance for someone who is dying? D. The policy features. Whole Life Insurance D. Term. The most common settlement option for a life insurance program is the lump-sum payment. Holly and Matt want to use the "nonworking" spouse method to determine the amount of life insurance coverage they need. What will be the surrender value of LIC policy after 5 years? 81. Whole life B. \quad\text{Without donor restrictions}&\text{\$\hspace{1pt}104,000}\\ $140,000 B. Is life insurance for married couples cheaper? You must pay interest on any loans. 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. 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. A. They have determined that their annual income is $70,000 and their net worth is now $150,000. Which method are they using to determine their life insurance needs? You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Annuities are often purchased for A. D. Fund expense. You may not purchase insurance once your term ends. This is a method that has you adding half of all your debts plus funeral expenses. D. Decreasing term. copyright 2003-2023 Study.com. E. Proceeds left with the company. When can I switch from original Medicare to an Advantage plan? But life insurance rates can vary dramatically among applicants, insurers and policy types. The death benefit will be increased by the amount of an outstanding policy loan. E. A policy whose coverage stops after a period of time. The "Family Need" method of estimating life insurance includes factors such as Social Security and liquid assets, Mutual life insurance companies specialize in the sale of nonparticipating policies, Another name for straight term is renewable return-of-premium term, Decreasing term pays less to the beneficiary as time passes, Return-of-Premium term pays out all premiums plus interest to a beneficiary. Find the factor on the chart where the nonworking spouse's age intersects with the working spouse's income from the column on the left 3. Quickly and professionally. You are a dual-income, no-kids family. You and your spouse are in good health and have reasonably secure jobs. Using the DINK method, what should be your need for life insurance? '`Wb L@b[[s8M,I=s:sr<3Y=w0&)_f& (_X>pO&|`r;ZXeEP4DDi_/%"M{s1&E^}W>f,Kc,$vt ls-`p]s+>hBQ/nmBNO`majcNz@vr2LvDZ \NTef9F+ They have determined that their annual income is $70,000 and their net worth is now $150,000. After payment was received, tuition 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. D. A fixed annuity is one where the investments made into the annuity are variable. E. Your premium will be higher than a whole life policy premium. What is the amount of life insurance they should carry using the easy method? Using the DINK method, what should be your need for life insurance? B. Mortality and expense risk charge. $4,000. In contrast to the biopsychosocial model, the biomedical model views health as ___________. Academic support 23,300 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. Table lamp. When deciding the right amount of coverage required for your spouse, everyones need may be different. 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. Most modern insurance covers let you add your spouse under the same policy for an additional premium, often lower than your own premium. It accumulates cash value. Using the "Nonworking" Spouse Method to Determine Life Insurance Needs. Fixed Insurance products and services offered through Ash Brokerage or Smallwood Associates, Ltd. Use the easy method to determine how much insurance she should carry. The income replacement approach is a method of determining the amount of life insurance you should purchase. \text{Prepaid assets}&&\text{1,364}\\ A. TERMS OF SERVICE \text{Property, plan, and equipment (net of accumulated depreciation of \$104,240)}&&\text{281,404}\\ A. insurance needs using the DINK method. D. Term life insurance plans. Time Value of Money Formula & Examples | What is Time Value of Money? Which of the following is NOT a feature of whole life insurance? Riders in Insurance Which of the following is NOT a factor that affects the price a company charges for a life insurance policy? It will take your youngest child 15 more years to reach 18. B. C. Your premium will not increase because your policy is renewable. C. Final life payment. 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. What happens if you don't pay your health insurance deductible? Easy method C. DINK method D. Family need E. Soccer mom 95. 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. 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. Which of the following is NOT important when buying life insurance? Using Exhibit 12-1, determine the life expectancy of a 40-year-old male. B. 74. One of our associate will call you back shortly. Using the "nonworking" spouse method, what should, be the life insurance needs for a family whose youngest, 94. Features of Life Insurance Can someone be denied homeowners insurance? Term insurance C. Whole insurance D. Variable annuity E. 401(k), 77. C. The mortality rate it expects among its policy holders. With the right term insurance policy in place, stay prepared for any adversity. B. Using the nonworking spouse method, what should be the life is your life insurance need based on the easy method? \textbf{(amounts in thousands)}\\ Benefits of Life Insurance NOT INSURED BY ANY STATE OR FEDERAL AGENCY. It helped me pass my exam and the test questions are very similar to the practice quizzes on Study.com. is =1.25\sigma = 1.25=1.25. B. Investment earnings received for the period were $3,960, of which$2,070 was donor restricted for scholarships. Were your family to lose that, you lose all of that labor. Can non-working spouses qualify for a life insurance? A. Adjustable life B. U ^s1xRpbD#rYNrJC.aeD=U]Sik@X6G[:b4(uH%-+0A?t>vT9. The maturity benefit is calculated for a 25 years old healthy male life who has opted for Canara HSBC Life Insurance iSelect Guaranteed Future with iAchieve plan option, monthly premium Rs.10,000 (excluding taxes), premium payment term 10 years and policy term 20 years through online sales channel. [Content_Types].xml ( Y0}GM C. You can convert your term policy to a permanent policy. Or, you can call us at (800) 797-1000. You can get your paper edited to read like this. C. Pay for a vacation. You pay premiums each year for the rest of your life. Fred bought life insurance when he was 47, although he told the insurance company that he was 42. 71. Student services 37,700 Work with our consultant to learn what to alter. 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. The premium shall be adjusted on the due date even if it has been received in advance. A. \quad\text{Deposits held in custody for others}&&\text{700}\\ E. It is permanent life insurance. A. Variable life C. Universal life D. Adjustable life E. Decreasing term life. succeed. This is a method that has you multiplying the number of years it takes the youngest child to reach 18 by $10,000. If you mean you want to add life insurance coverage for your new spouse on your life insurance policy, you can contact your life insurance agent or carrier and request what it would cost to add a spouse rider for life insurance coverage to your existing policy. You have to drive them to their after-school activities, preparing meals, keeping the household in order, etc. $343,000 C. $490,000 D. $700,000 E. $750,000, 85. You add these numbers together: $10,000 + $50,000 + $95,000 + $800,000 + $400,000 = $1,355,000. This gives you seven years of wages at 70%. 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. D. Her parents. She, wants to determine her insurance needs. The process standard deviaton Claim Settlement Ratio You can take out a life insurance policy on your spouse if you have an insurable interest. Single adult living alone. \text{Liabilities:}\\ Can I stay on my parents insurance if I file taxes independently? For more details on risk factors, terms and conditions please read the Sales Brochure carefully before concluding a sale. Watch on to see what they are. Pay off a mortgage. Who will receive the benefits from her policy? This is a very common type of policy taken by homeowners who want to support their children financially. 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. . 2003-2023 Chegg Inc. All rights reserved. Term insurance for non-working spouse in India will be of great help. nonworking spouse whose youngest child is 5 years old? Amy bought a life insurance policy and named Ben as her beneficiary. Tuition waivers of $17,300 for students serving as teaching assistants for instruction were accrued. This problem has been solved! A. Using the "Nonworking" Spouse Method to Determine Life Insurance Needs. 68. Life insurance companies understand that taking care of the home is invaluable and is equally important as earning an income for the household. Nonworking spouse method is a type of insurance policy where without working you can support your children until they turn 18 years old. Insurance Contract Characteristics | Traits Specific to Insurance Contracts, Future Value Formula & Examples | How to Calculate Future Value. They plan to purchase life insurance using this formula: (18 - Youngest child's age) $10,000. Catherine Carey has made the choice to stay home, and raise her three kids while her husband works. \qquad\text{Total liabilities}&&\text{127,730}\\[3pt] You may need to change your coverage amounts when this happens. Which of the following provisions should she take action on? Using the nonworking spouse method, what should be the life insurance needs for a After you purchase a life insurance contract, you have a "free look" period that lasts A. C. Moodys. D. A deferred annuity allows an individual to receive payments from a life insurance policy at some future date. Jeff Willis has five kids and more debt than the, average family. Suppose you are 45 and have a $50,000 face amount, 15-year, limited-payment, Multiply the income . Allison is a "nonworking" spouse who devotes all of her time to household activities. Fell free get in touch with us via phone or send us a message. Using the "nonworking" spouse method, what should be the life insurance need for a family whose youngest child is 10 years old? B. In this case, 18 years. Of the following, which one is the most positive feature of whole life insurance? As a member, you'll also get unlimited access to over 88,000 Your premium will not increase when you renew it.
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