Dividend policy B. Nonparticipating policy C. Mutual policy D. Participating policy E. Stock policy, 33. For example, say. You can get your paper edited to read like this. This method is called the non-working spouse method. you owe $11,000 on car loans, $2,000 in personal debt, and $3,000 in credit card Using time value of money and assuming you could invest your Most modern insurance covers let you add your spouse under the same policy for an additional premium, often lower than your own premium. Which of the following provisions allows her to keep her coverage if she is a couple of weeks late with paying her premium? Life Insurance Underwriting Your needs will also change over time, so your life insurance needs may also change over time. C. Her contingent beneficiaries. 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. participating policy (dividends will be used to build up the cash value of the policy). All rights reserved. It will have a lower coverage amount and a waiting period (usually 2 year). What happens if you dont get life insurance? In order to have a valid policy, the owner must: To clearly illustrate your insurable interest. 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. When can I switch from original Medicare to an Advantage plan? Can you get life insurance on a spouse? Solved Problem 12-10 Using the "Nonworking" Spouse Method to | Chegg.com d. a way of shipping goods to customers 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. Whole life B. C. Identified annuities to be the same as certificates of deposit. Use the multiple of income method to 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. Agency Problem in Finance Overview, Duties & Examples | What is the Agency Problem? Allison is a "nonworking" spouse who devotes all of her time to household activities. B. 2.Guaranteed Benefits - Provided all premiums have been paid as and when due and the policy is in-force. e. a place in which to keep products until they are needed Limited installment payment. If the policy exists, you can ask if you're a beneficiary. This gives you seven years of wages at 70%. 2. c. the charge per 100 pounds to ship goods by truck Types of Life Insurance Which method are they using to determine their life insurance needs? Which of the following is NOT a type of permanent 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? Sum Assured fixed at Rs. Which of the following is NOT a type of permanent insurance? T&C Apply. Term C. Credit life D. Endowment life E. Adjustable life, 53. IN THIS ARTICLE Disability income insurance, which complements health insurance, can replace lost income and help protect you and your family from an otherwise financially catastrophic illness or injury. For more details on risk factors, terms and conditions please read the Sales Brochure carefully before concluding a sale. Also, if you try to make up some of that yourself, you lose income and income potential. E. None of these. 47. C. 10 days. C. A life insurance policy allows an individual to receive payments from an annuity at once. It equals the cost of replacing the property. Fell free get in touch with us via phone or send us a message. Work with our consultant to learn what to alter. Using the "Nonworking" Spouse Method to Determine Life Insurance Needs. You are a dual-income, no-kids family. Related to the expenses incurred: prepaid assets of $534 were used,$4,776 of the expenses were accrued, and the remaining expenses were paid. TERMS OF SERVICE E. Proceeds left with the company. 96. A. 101. 25,00,000 which will remain same throughout the Policy Term. Which of the following riders should he consider? \text{Tuition and fees receivable (net of doubtful accounts of \$12)}&&\text{230}\\ After you purchase a life insurance contract, you have a "free look" period that lasts A. What happens if you don't pay your health insurance deductible? During the year, charges for tuition and fees were $244,500; scholarships were$16,300; and tuition waivers for scholastic achievement were $5,100. Your premium may increase if you continue it for another term because you will be older. Pam just started working at XYZ Widget Company and finally wants to get insurance coverage. All of the following are major rating agencies for insurance except A. B. Is life insurance for married couples cheaper? B. Bens beneficiaries. d. 28. 44. She may need to change her coverage as her needs change. Non-Working Spouse Method. The premium shall be adjusted on the due date even if it has been received in advance. B. Renewable term. A. 5. Investment Advisory Services provided by Smallwood Wealth Investment Management, LLC, an SEC registered investment advisor. B. \quad\text{Unearned revenue}&&\text{900}\\ A. Expenses incurred resulted in the release of $7,320 in net assets with donor restrictions. 24. E. Pay taxes. Student services 37,700 Such advance premium, if any, paid by the Policyholder shall not carry any interest. D. It builds cash value. Suppose that yours is a typical family. 1. Another name for a straight term policy is A. Renewable term. An error occurred trying to load this video. 59. How much storage space is required? \qquad\text{Total liabilities}&&\text{127,730}\\[3pt] Likewise, when using the rule of 72, the number 72 is used in the calculation. Unit linked Insurance products are different from the traditional insurance products and are subject to the risk factors. 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. \textbf{(amounts in thousands)}\\ Group life C. Limited life D. Universal life E. Variable life, 49. When deciding the right amount of coverage required for your spouse, everyones need may be different. Using the "nonworking" spouse method, what should, be the life insurance need for a family whose youngest, 95. A. 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. Now, you take this number and subtract your available assets from this number. Answer . Collections on Tuition and Fees Receivable totaled$222,600. B. All guarantees are based on the continued claims paying ability of the issuing company. D. Allowed annuities to be purchased for individual retirement accounts. Using Exhibit 12-1, determine the life expectancy of a 40-year-old male. DINK stands for double income, no kids. A process has specification limits of LSL 5 540 and USL 5 550. T&C apply. A. A. Ben. Your spouse expects to continue to work after your death. Group life C. Limited life D. Universal life E. Variable life, 52. 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. Forecasting, Time Series, and Regression (Richard T. O'Connell; Anne B. Koehler), Biological Science (Freeman Scott; Quillin Kim; Allison Lizabeth), Educational Research: Competencies for Analysis and Applications (Gay L. R.; Mills Geoffrey E.; Airasian Peter W.), Brunner and Suddarth's Textbook of Medical-Surgical Nursing (Janice L. Hinkle; Kerry H. Cheever), Business Law: Text and Cases (Kenneth W. Clarkson; Roger LeRoy Miller; Frank B. B. What are the four methods of determining life insurance needs? 71. D. Term life insurance plans. Of course, it would be a tragedy were something to happen to your spouse. Frank, age 38, was hit by a car and died. If you are new to Smallwood Wealth schedule a Wealth Curve Conversation. D. You can convert your policy to a permanent type at the end of the term. E. No interest will accumulate for any loans related to life insurance. 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. Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits, 61. We want to help you with that. Experts are tested by Chegg as specialists in their subject area. The college received cash contributions without donor restrictions of$2,080, pledges to be collected in 2021 of $550, and cash contributions to the endowments of$335. insurance needs using the DINK method. The second is the DINK method. C. Temporary insurance. False. Besides getting money into the family, the non-working spouse holds a responsibility for everything that doesnt offer bonus, perks, and promotions. Judy and James have a 4-year-old child. fhp>5UN.es r}"n ~c|A1mHNK|i^f>Gk aYT)s7z~fO9~krcVr2@)KTQirUQ!AP+jthG;l!9|R^7|o A deferred annuity allows an individual to receive payments from a life insurance policy immediately. B. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. was specifically designed for someone in her situation? A. 5% B. Life insurance benefits may be used to pay off a home mortgage or other debts at the time of death. Tuition waivers of $17,300 for students serving as teaching assistants for instruction were accrued. For a non-Working Spouse. Using the "Nonworking" Spouse Method to Determine Life Insurance Needs. Home Flashcards Chapter 10 Personal Finance. A. A.M. Best. A. D. 30 days. $12,000 B. 69. 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. Nonworking spouse method is a type of insurance policy where without working you can support your children until they turn 18 years old. How to estimate life insurance requirements for a non working spouse? The insurer may tell you, or it may ask you to submit a form reporting the death. 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. Yes. So your life insurance requirement is 15 $10,000 = $150,000. The cash value of the policy is expected to be 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. 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. You own a home with a mortgage of $110,000, and 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. \quad\text{Without donor restrictions}&\text{\$\hspace{1pt}104,000}\\ D. An annuity is more advisable for people in poor health than for those who are likely to live longer than average. nonworking spouse whose youngest child is 5 years old? Which of the following is a poor choice for the amount of protection offered for an individual? Limited installment payment. Call the State Commissioner's Office for your State. Each plans to continue to work after the other one dies. A. Adjustable life B. Its like a teacher waved a magic wand and did the work for me. the income provider's salary. Solved Using the "nonworking" spouse method, what should be - Chegg Term insurance C. Whole life insurance D. Variable annuity E. 401(k). Option to add Optional In-Built Covers or choose a Benefit Payout Option other than Lumpsum is not available to non-Working Spouse. 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. Diffusion Let us complete them for you. E. It is better to fund an IRA, Keogh, or 401(k) before buying an annuity. B. B. $12,000 in 15 years. D. The policy features. 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. You should be able to collect the life insurance payout within 30 to 60 days after you have submitted the completed claim forms and the supporting documents. Life insurance companies understand that taking care of the home is invaluable and is equally important as earning an income for the household. 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. Catherine Carey has made the choice to stay home, and raise her three kids while her husband works. She has since died. \text{Liabilities:}\\ Another name for temporary life insurance is A. You have a spouse, two kids, a dog and a mortgage - a typical family. False. \textbf{June 30, 2019}\\ A. copyright 2003-2023 Study.com. Watch on to see what they are. You add these numbers together: $10,000 + $50,000 + $95,000 + $800,000 + $400,000 = $1,355,000. B. What is non working spouse method? - InsuredAndMore.com What are the stages of the General Adaptation Syndrome (GAS)? 58. 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. Of the following, which one is the most positive feature of whole life insurance? insurance needs for a family whose youngest child is 5 years nonworking spouse whose youngest child is 6 years old? They plan to purchase life insurance using this formula: (18 - Youngest child's age) $10,000. If their youngest child is 5 years old, how much do they need? E. Weiss Research. Is equipment floater the same as inland marine? 79. Allison is a "nonworking" spouse who devotes all of her time to household activities. Sum Assured fixed at Rs. Use Exhibit 1-B. A. Waiver of premium disability benefit B. 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. Carton is 0.75 m by 0.6 m by 0.8 m. 48. 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. More thorough because it also considers employer provided insurance, Social Security benefits, and liquid assets. D. Her parents. Use the easy method to determine how much insurance she should carry. You estimate that funeral expenses will be $5,000. Exam 3 Flashcards by Sam Cohen | Brainscape B. They plan to purchase life insurance using this formula: (18 Youngest childs age) $10,000. Fred bought life insurance five years ago. This website helped me pass! You can convert your policy from permanent to term at any time. method for him to use to calculate his insurance needs? B. Which of the following policies would meet her needs? A term insurance plan will also help to save taxes on the premiums under Section 80C of the IT Act. \qquad\text{Total net assets}&&\underline{\text{\hspace{5pt}333,940}}\\ Tim and Allison are married and have two children, ages 3 and 6. Investments are not FDIC- or NCUA-insured, are not guaranteed by a bank/financial institution, and are subject to risks, including possible loss of the principal invested. 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. You have a gross annual income of $62,000. A. 66. Cash value. C. Retired couple with a pension. determine the minimum amount of life insurance you should carry. 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. E. Made all annuities tax free. It helped me pass my exam and the test questions are very similar to the practice quizzes on Study.com. This method is called the non-working spouse method. $30,000 B. 4.Tax benefit of Rs. \quad\qquad\text{Total liabilities and net assets}&&\underline{\underline{\text{\$\hspace{1pt}455,670}}}\\ 97. Francisco and Maria have three children and want to complete a detailed worksheet to determine the amount of life insurance they need to purchase. D. A fixed annuity is one where the investments made into the annuity are variable. Ag;sE2/yNNF;eF]!hiV^r^l PK ! The Tax Reform Act of 1986 A. Try refreshing the page, or contact customer support. Protect the people who depend on the insured from financial losses caused by his or her death. Group life C. Limited life D. Universal life E. Variable life, 51. D. Limited payment. 5 days. 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. Multiply the income . D. Household with children. 74. Your spouse expects to continue Your spouses cover must be useful to pay for childcare expenses and all the help you need around the house. True. With comprehensive coverage features like accidental benefit, increasing/ decreasing cover and whole life cover, the policy also offers a Spouse cover. An immediate annuity allows an individual to receive payments from an annuity beginning at once. This is also the most thorough method. 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 Whole life. Which of the following statements is correct? $10,000 + ($30,000 / 2) + ($11,000 / 2) + ($5,000 / 2) = $10,000 + $15,000 + $5,500 + $2,500 = $33,000. Your annual income is $100,000. E. Your premium will be higher than a whole life policy premium. She, wants to determine her insurance needs. This term life policy will guarantee that you will pay the same premium for the duration of your policy. B. What kind of policy would she want to purchase? If you find the policy or discover paperwork that indicates a policy exists, contact the insurer. Easy method B. Dual income, no kids method C. Formal calculation method D. Nonworking spouse method E. Family needs method. Estimate how much life insurance Tim and Allison should carry to cover Allison. Easy method C. DINK method D. Family need E. Soccer mom 95. An individual can take out a loan on his or her term policy. 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. How to Buy Life Insurance: Steps & Choices, App. This is a very common type of policy taken by homeowners who want to support their children financially. To unlock this lesson you must be a Study.com Member. 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. 38. Past performance of the investment funds do not indicate the future performance of the same. The monthly survival benefit mentioned is an example of Life Assured opting for Sum Assured as 1Cr under Life Secure with Income plan option. ht _rels/.rels ( J1!}7*"loD c2Haa-?_zwxm Time Value of Money Formula & Examples | What is Time Value of Money? 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. The Wealth Curve Talk with John L. Smallwood. 3 days. Each earns $45,000 annually. You have to drive them to and from school, oversee homework and music practice. I highly recommend you use this site! Using the "Nonworking" Spouse Method to Determine Life Insurance Needs. \textbf{STEINER COLLEGE}\\ Institutional support 28,500. 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. Limited installment payment. GST On Life Insurance A. Life expectancy for men is longer than that for women. Which of the following provisions prevents the life insurance company from refusing to pay his beneficiaries because of his original misrepresentation? old? 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. Using the DINK method, what should be your need for life insurance? The companys cost of doing business. What. A person who is named to receive the benefits from an insurance policy is a(n) A. E. None of these is correct. old? Using the nonworking spouse method, what should be the life Something went wrong.