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. Donald and Charlene are married and do not have any children. Use the multiple of income method to Which method are they using to determine their life insurance needs? What are the stages of the General Adaptation Syndrome (GAS)? Call the State Commissioner's Office for your State. Diffusion Let us complete them for you. 2,10,000, (excluding taxes) premium payment term 10 years and policy term 20 years. B. \textbf{STEINER COLLEGE}\\ The DINK method has you adding half of all your debts to your funeral expenses. Which of the following is NOT a feature of whole life insurance? 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. Which of the following provisions prevents the life insurance company from refusing to pay his beneficiaries because of his original misrepresentation? E. 60 days. Term C. Credit life D. Endowment life E. Adjustable life, 53. Lastly, it allows you to keep your future obligations: college, paying off debts, weddings, bar mitzvahs and bat mitzvahs, sweet sixteens, and all the other things that you want to do for your kids. For a non-Working Spouse. Using the "nonworking" spouse method, what should, be the life insurance need for a family whose youngest, 95. Life expectancy for men is longer than that for women. Nonworking spouse method is a type of insurance policy where without working you can support your children until they turn 18 years old. 81. When deciding the right amount of coverage required for your spouse, everyones need may be different. 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We want to help you with that. \text{Prepaid assets}&&\text{1,364}\\ 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. Replacement value is a method for determining what an insurance company will pay you in case your property is stolen or destroyed. This is also the most thorough method. 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. 'QP2?^03dw 6x ;!;RTkz}Sc;)iI What is the amount of life insurance they should carry using the "nonworking" spouse method? Shaan and Anita are married and have two children, ages 4 and 7. Limited installment payment. Work with our consultant to learn what to alter. U ^s1xRpbD#rYNrJC.aeD=U]Sik@X6G[:b4(uH%-+0A?t>vT9. 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. Using time value of money and assuming you could invest your Francisco and Maria have three children and want to complete a detailed worksheet to determine the amount of life insurance they need to purchase. Home Flashcards Chapter 10 Personal Finance. If you want to purchase term insurance, you will receive all of the following except A. 27. 97. a. a way of calculating an inventory's value A. Incontestability clause B. Misstatement of age provision C. Naming a beneficiary D. Policy reinstatement E. The grace period, 55. There are many situations to consider, and the methods you just heard about may or may not fit your needs. Deferred annuity C. Whole life insurance D. Immediate annuity E. Universal life insurance. Steiner is a private college. 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 If you are new to Smallwood Wealth schedule a Wealth Curve Conversation. In other words, you will have to show why you want to insure the individual. Term insurance B. 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. Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits. If you are new to Smallwood Wealth schedule a Wealth Curve Conversation here. Easy method B. Dual income, no kids method C. Formal calculation method D. Nonworking spouse method E. Family needs method, 29. I highly recommend you use this site! You have a spouse, two kids, a dog and a mortgage - a typical family. C. A life insurance policy allows an individual to receive payments from an annuity at once. Your spouse expects to continue to work after your death. Life insurance companies issue a lot of paperwork. If you are looking for life insurance, you probably realize the need to secure your family financially, but if you are married, your safety net is probably incomplete unless your spouse also has an adequate life insurance coverage to take care of your familys overall financial needs. This gives you seven years of wages at 70%. D. It builds cash value. What happens if you dont get life insurance? Estimate your total A. Which of the following is NOT a type of permanent insurance? What kind of policy would you want to purchase? 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. Allison is a "nonworking" spouse who devotes all of her time to household activities. With comprehensive coverage features like accidental benefit, increasing/ decreasing cover and whole life cover, the policy also offers a Spouse cover. Allison is a "nonworking" spouse who devotes all of her time to household activities. Annuities are often purchased for A. The "Nonworking" spouse method of estimating life insurance includes factors such as Social Security and liquid assets. 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. 36. Pam just started working at XYZ Widget Company and finally wants to get insurance coverage. Using the sample chart that follows, find the column showing the age of the nonworking spouse 2. You heard about several methods you can use to calculate your life insurance needs. Let's review. For example, say. A. E. Whole life insurance plans. 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? Which method are they using to determine their life insurance needs? Get unlimited access to over 88,000 lessons. Your needs will also change over time, so your life insurance needs may also change over time. C. A life insurance policy allows the beneficiary to receive proceeds at some future date. In other words, if a person's death would cause you significant financial hardship, it's an insurable interest. The spouse who has to stay at home, looking after the children, cooking, and supporting the family often has a more tiresome job to do, than the working spouse. 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. \text{Pledges receivable (net of doubtful accounts of \$280)}&&\text{5,872}\\ A. Incontestability clause B. Misstatement of age provision C. Naming a beneficiary D. Policy reinstatement E. The grace period, 57. Life insurance companies pay out the proceeds when the insured dies and the beneficiary of the policy files a life insurance claim. To go deeper on the insights from Smallwood Wealth Management, request your FREE COPY of. 1.5 lacs under Income Tax Act, 1961 and tax benefit may vary from assessee to assessee. - 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. Required Reserve Ratio Formula | How to Calculate Required Reserves, Monthly Payment Formula | How to Calculate Loan Payments. \quad\text{Total assets}&&\underline{\underline{\text{\$\hspace{1pt}455,670}}}\\[5pt] You own a home with a mortgage of $110,000, and Purchasing a life insurance policy is a basic and inexpensive task. loans. What is the amount of life insurance they should carry using the easy method? Who will receive the benefits from her policy? After you purchase a life insurance contract, you have a "free look" period that lasts A. Copyright 2023 StudeerSnel B.V., Keizersgracht 424, 1016 GC Amsterdam, KVK: 56829787, BTW: NL852321363B01, determine the minimum amount of life insurance you should carry, the easy method to determine how much life insurance you should carry. \textbf{Statement of Financial Position}\\ Question: Problem 12-10 Using the "Nonworking" Spouse Method to Determine Life Insurance Needs [LO12-2] Tim and Allison are married and have two children, ages 16 and 17 . Using the DINK method, what should be your need for life insurance? Life insurance benefits may be used to pay off a home mortgage or other debts at the time of death. Your spouses cover must be useful to pay for childcare expenses and all the help you need around the house. Fixed Insurance products and services offered through Ash Brokerage or Smallwood Associates, Ltd. What percentage of your income should you spend on life insurance? D. Her parents. The recommendation is to have seven to ten years of life insurance. The premium shall be adjusted on the due date even if it has been received in advance. D. Spend money. Your premium will not increase when you renew it. 74. 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. - 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? D. Fund expense. See Answer Jumping the Wealth Curve with Edward E. Bao Jr. A. C. Convertible term. 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. Fred bought life insurance when he was 47, although he told the insurance company that he was 42. E. It is permanent life insurance. This method has you multiplying the number of years it takes the youngest child to reach 18 by $10,000. $30,000 B. 70. What is Life Insurance? 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. Institutional support 28,500. They have determined that their annual income is $70,000 and their net worth is now $150,000. 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. D. Term life insurance plans. E. Proceeds left with the company. 700 cartons to be stored. This is a method that has you adding half of all your debts plus funeral expenses. It provides both a death benefit and a savings component. You have no other debt. What impact do they have on your wealth potential. Frank, age 38, was hit by a car and died. Unit linked Insurance products are different from the traditional insurance products and are subject to the risk factors. B. Answer . D. Decreasing term. Whole Life Insurance The timing for payments of a variable annuity are variable. Option to add Optional In-Built Covers or choose a Benefit Payout Option other than Lumpsum is not available to non-Working Spouse. Tim and Allison are married and have two children, ages 4 and 7. 5EPhGD!A'b1^:x[)(2##19pH`G0v#/(5;dI(D This method has you multiplying your annual gross income by 70% and then multiplying that by 7. Which of the following riders should he consider? 12-3 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. d. 28. You estimate that funeral expenses will be $5,000. The following transaction information (amounts in thousands) pertains to the year ended June 30, 2020. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Note: The categorization of Spouse into Working and Non-Working will be as per the Companys Board Approved Underwriting Policy (BAUP). $40,000 B. 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. The monthly survival benefit mentioned is an example of Life Assured opting for Sum Assured as 1Cr under Life Secure with Income plan option. The Policy Term, Premium Payment Term and the premium payment mode remains the same for the Spouse, as yours. \textbf{Assets}\\ Its like a teacher waved a magic wand and did the work for me. B. She does not want to take a medical exam to get coverage because she has some underlying health conditions and is concerned that she might not qualify for a policy. Cash value. 65. So to recap, you can not take out a life insurance policy on someone without their knowledge, and no one should be able to do it to you. Using the DINK method, what should be your need for life insurance? 73. 2.Guaranteed Benefits - Provided all premiums have been paid as and when due and the policy is in-force. Also, if you try to make up some of that yourself, you lose income and income potential. You want to purchase a life insurance policy that pays a dividend. \quad\text{With donor restrictions}&\underline{\text{\hspace{5pt}229,940}}\\ Step 1 Non-working spouse method: This method is form of insurance coverage that allows you to s. E. Independently wealthy adult. Allison is a "nonworking" spouse who devotes all of her time to household activities. Instruction$86,100 You have a gross annual income of $62,000. Tim and Allison are married and have two children, ages 3 and 6. 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. A. The Wealth Curve Talk with John L. Smallwood. 3 days. Multiply the number of years until the youngest child reaches 18 by $10,000. She was recently divorced. One of the most common questions we hear is, Can my non-working spouse qualify for life insurance? The answer is yes! Tuition waivers of $17,300 for students serving as teaching assistants for instruction were accrued. 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. All other trademarks and copyrights are the property of their respective owners. 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. E. Weiss Research. D. A benefit during the period it covers, such as 1, 5, 10, or 20 years. D. A deferred annuity allows an individual to receive payments from a life insurance policy at some future date. 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. With an available asset of $500,000 in savings, your life insurance requirement is $1,355,000 - $500,000 = $855,000. age 35 may expect to live. C. The policy will return all premiums if you survive to the end of the policy. Your annual income is $60,000.