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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. You have a spouse, two kids, a dog and a mortgage - a typical family. 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. 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. Life Insurance Underwriting We reviewed their content and use your feedback to keep the quality high. 47. 46. We look forward to speaking with you. 71. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. For a non-Working Spouse. \textbf{Statement of Financial Position}\\ Catherine Carey has made the choice to stay home and raise her three kids while her husband works. If you are new to Smallwood Wealth schedule a Wealth Curve Conversation here. insurance needs for a family whose youngest child is 5 years b. the number of each item you have in stock Both you and the spouse are covered throughout the policy term for your respective separate sums assured. T&C Apply. C. Administrative fee. \textbf{Assets}\\ The monthly survival benefit mentioned is an example of Life Assured opting for Sum Assured as 1Cr under Life Secure with Income plan option. He has since died. E. The policy requires that you pay a specified premium each year for the rest of your life. Jeanne wants to purchase a life insurance policy with guaranteed premiums. C. You can convert your term policy to a permanent policy. A. Incontestability clause B. Misstatement of age provision C. Naming a beneficiary D. Policy reinstatement E. The grace period, 56. Which of the following provisions will affect the amount of money his beneficiaries will receive? B. 76. D. A benefit during the period it covers, such as 1, 5, 10, or 20 years. An error occurred trying to load this video. Using the sample chart that follows, find the column showing the age of the nonworking spouse 2. 48. NOT BANK GUARANTEED. Your annual premium is $1,000. E. 60 days. T&C apply. D. Household with children. Beneficiary. At minimal, you want a policy to provide at least 5 years worth of income replacement, until you can balance out things. 42. 40. 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. Competition among companies with comparable policies can affect the price a company charges for life insurance. Goods & Services Tax will be charged on the premium amount. Estimate how much life insurance Tim and Allison should carry. 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. 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. Best Investment Options in India Its like a teacher waved a magic wand and did the work for me. 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} Whole life B. Let's review. Whole life. An immediate annuity allows an individual to receive payments from an annuity beginning at once. D. You must pay interest on any outstanding policy loans. Francisco and Maria have three children and want to complete a detailed worksheet to determine the amount of life insurance they need to purchase. \end{array} C. The policy owner can borrow any amount up to the cash value of the policy. The Policy Term, Premium Payment Term and the premium payment mode remains the same for the Spouse, as yours. This problem has been solved! I highly recommend you use this site! Tim and Allison are married and have two children, ages 4 and 7. Single adult living alone. Which of the following riders should she consider? 74. 5EPhGD!A'b1^:x[)(2##19pH`G0v#/(5;dI(D makes about $38,000 annually. What is their total insurance need using the DINK method? NOT INSURED BY ANY STATE OR FEDERAL AGENCY. 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. E. None of these is correct. Use Exhibit 1-B. Ask to set up a Wealth Curve conversation. This is a method that has you adding half of all your debts plus funeral expenses. What happens if you dont get life insurance? $18,000 C. $50,000 D. $130,000 E. $180,000, 84. PPTX Life Insurance Chapter Fourteen - University of Arkansas A. E. Proceeds left with the company. However, at a minimum, you should consider the financial value of child care, house care, and other domestic services that your spouse has been taking care of at present. A.M. Best. $4,000. See Answer 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. 78. Everyone is impacted by these 5 problems. It equals the cost of replacing the property. 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? A. A. Ben. PK ! Secondly, consider the value of the unpaid work done by a spouse who spends much of their time raising children. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Life Insurance for Spouse (Non-Working): All You Need To Know $30,000 B. A person who is named to receive the benefits from an insurance policy is a(n) A. ht _rels/.rels ( J1!}7*"loD c2Haa-?_zwxm All rights reserved. Types of Life Insurance Is life insurance for married couples cheaper? C: Consumer Agencies & Organizations, CLEP Financial Accounting: Study Guide & Test Prep, Introduction to Financial Accounting: Certificate Program, High School Marketing for Teachers: Help & Review, How to Choose a College: Guidance Counseling, UExcel Workplace Communications with Computers: Study Guide & Test Prep, Effective Communication in the Workplace: Certificate Program, Effective Communication in the Workplace: Help and Review, CLEP Principles of Macroeconomics: Study Guide & Test Prep, Intro to Excel: Essential Training & Tutorials, Information Systems and Computer Applications: Certificate Program, GED Social Studies: Civics & Government, US History, Economics, Geography & World, What is Whole Life Insurance? A. 25% C. 50% D. 75% E. 95%, 32. Your spouse expects to continue Features of Life Insurance \quad\text{With donor restrictions}&\underline{\text{\hspace{5pt}229,940}}\\ It is important to replace all of the income lost when an employed family member dies when using the human-life approach. The process standard deviaton D. Insurer. Find the CpC_pCp and CpkC_{pk}Cpk capability indexes if. In other words, you will have to show why you want to insure the individual. D. Her parents. Easy method B. Dual income, no kids method C. Formal calculation method D. Nonworking spouse method E. Family needs method, 30. Each earns $45,000 annually. 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. to work after your death. Which of the following life insurance policies should she apply for? Let us have a look at your work and suggest how to improve it! What impact do they have on your wealth potential. Each of you 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. This method has you multiplying your annual gross income by 70% and then multiplying that by 7. The sooner a person is likely to die, the lower the premiums he or she will pay. Which of the following riders should he consider? Time Value of Money Formula & Examples | What is Time Value of Money? C. Policyholder. The premium shall be adjusted on the due date even if it has been received in advance. Pay off a mortgage. You have no plans to increase the size of your family in 59. A. Incontestability clause B. Misstatement of age provision C. Naming a beneficiary D. Policy reinstatement E. The grace period, 57. Nonworking spouse method is a type of insurance policy where without working you can support your children until they turn 18 years old. 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. 2,10,000, (excluding taxes) premium payment term 10 years and policy term 20 years. 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. Multiply the income . A. False. 73. Or, you can call us at (800) 797-1000. Non-Working Spouse Method. 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. The insurer may tell you, or it may ask you to submit a form reporting the death. insurance needs for a family whose youngest child is 5 years One such cover by Canara HSBC Life Insurance Company is the iSelect Smart360 Term Plan. Georgia was supposed to pay her premium by the 15th of the month. Holly and Matt want to use the "nonworking" spouse method to determine the amount of life insurance coverage they need. Estimating Life Insurance Needs Using the DINK Method You Another name for a straight term policy is A. Renewable term. Suppose that yours is a typical family. Securities offered through Purshe Kaplan Sterling Investments, MemberFINRA/SIPCHeadquartered at 80 State Street, Albany, NY 12207. I would definitely recommend Study.com to my colleagues. age 35 may expect to live. Using the nonworking spouse method, what should be the life What kind of policy is he planning to purchase? Answer . c. the charge per 100 pounds to ship goods by truck 2.Guaranteed Benefits - Provided all premiums have been paid as and when due and the policy is in-force. If you have a renewable term policy, A. \textbf{June 30, 2019}\\ 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. True. 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 E. Proceeds left with the company. the near future. C. Her contingent beneficiaries. $140,000 B. 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. \qquad\text{Total liabilities}&&\text{127,730}\\[3pt] 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. Work with our consultant to learn what to alter. Firstly, spouses who work part-time or who do not work have insurability interest, which should be maximized. What are the stages of the General Adaptation Syndrome (GAS)? Using the "Nonworking" Spouse Method to Determine Life Insurance Needs. You can get your paper edited to read like this. B. 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. 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. During the year, charges for tuition and fees were $244,500; scholarships were$16,300; and tuition waivers for scholastic achievement were $5,100. Do both you and your spouse need life insurance? He forgot to tell them that he had a heart condition, and, as a result of that condition, he recently died. is =1.25\sigma = 1.25=1.25. D. Your premium will not increase when you renew it. 27. 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. Deferred annuity C. Whole life insurance D. Immediate annuity E. Universal life insurance. Using the DINK method, what should be your need for life insurance? 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 Life expectancy for men is longer than that for women. 43. 51,84,468 which includes Guaranteed Sum Assured on Maturity, accrued Guaranteed Yearly Additions and Guaranteed Loyalty Addition. 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.