Fixed annuity B. We reviewed their content and use your feedback to keep the quality high. In other words, if a person's death would cause you significant financial hardship, it's an insurable interest. Investment earnings received for the period were $3,960, of which$2,070 was donor restricted for scholarships. 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. 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 . What is the cost of living in California? 2.Guaranteed Benefits - Provided all premiums have been paid as and when due and the policy is in-force. This method is called the non-working spouse method. Quickly and professionally. Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits, 63. A. E. A policy whose coverage stops after a period of time. U ^s1xRpbD#rYNrJC.aeD=U]Sik@X6G[:b4(uH%-+0A?t>vT9. Yes! This gives you 7 years of wages at 70%. 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. 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. 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. 79. In contrast to the biopsychosocial model, the biomedical model views health as ___________. Which of the following provisions prevents the life insurance company from refusing to pay his beneficiaries because of his original misrepresentation? Life insurance is a wise purchase of all individuals. Life insurance benefits may be used to pay off a home mortgage or other debts at the time of death. \textbf{Assets}\\ You must pay interest on any loans. 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. 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. The premiums & funds are subject to certain charges related to the fund or to the premium paid. Look through financial records. Your annual income is $100,000. Were your family to lose that, you lose all of that labor. 58. Using Exhibit 12-1, determine the average numbers of additional years males alive at C. A life insurance policy allows an individual to receive payments from an annuity at once. B. The family needs approach requires you to purchase enough life insurance to allow your family to meet its various expenses in the event of your death. The companys cost of doing business. Do both you and your spouse need life insurance? Sum Assured as chosen by the Working Spouse under the Plan. Your spouse expects to continue to work after your death. Most modern insurance covers let you add your spouse under the same policy for an additional premium, often lower than your own premium. The Tax Reform Act of 1986 A. A. The process standard deviaton 46. A. 24. D. Household with children. Tuition waivers of $17,300 for students serving as teaching assistants for instruction were accrued. This method is used only to calculate child care needs, not the total financial needs of the family. D. Life income option. Dividend policy B. Nonparticipating policy C. Mutual policy D. Participating policy E. Stock policy, 33. 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. Which method are they using to determine their life insurance needs? Which of the following riders should he consider? Instruction$86,100 Purshe Kaplan Sterling Investments and Smallwood Wealth Investment Management, LLC are not affiliated companies. C. Tell you why her product is better than the competitors. E. Cash value life. nonworking spouse whose youngest child is 5 years old? Focus on Personal Finance: Online Textbook Help, Life Insurance Companies: Definition & Types, Psychological Research & Experimental Design, All Teacher Certification Test Prep Courses, How to Estimate Life Insurance Requirements. \end{array} Which method are they using to determine their life insurance needs? For example, say. What percentage of your income should you spend on life insurance? An individual can take out a loan on his or her term policy. Life insurance companies do realize that taking care of the house is an equally important as earning an income for the household. The premium shall be adjusted on the due date even if it has been received in advance. \text{Prepaid assets}&&\text{1,364}\\ This last method is called the family need method. For a non-Working Spouse. If the policy exists, you can ask if you're a beneficiary. \text{Property, plan, and equipment (net of accumulated depreciation of \$104,240)}&&\text{281,404}\\ E. All of these affect the price. You are a dual-income, no-kids family. A. C. Individual retirement accounts (IRAs). Cross), Campbell Biology (Jane B. Reece; Lisa A. Urry; Michael L. Cain; Steven A. Wasserman; Peter V. Minorsky), Psychology (David G. Myers; C. Nathan DeWall), The Methodology of the Social Sciences (Max Weber), Civilization and its Discontents (Sigmund Freud), Principles of Environmental Science (William P. Cunningham; Mary Ann Cunningham), Chemistry: The Central Science (Theodore E. Brown; H. Eugene H LeMay; Bruce E. Bursten; Catherine Murphy; Patrick Woodward), Give Me Liberty! 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. When using the rule of 70, the number 70 is used in the calculation. 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. You have to drive them to and from school, oversee homework and music practice. This is a very common type of policy taken by homeowners who want to support their children financially. A. A. 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. You pay premiums each year for the rest of your life. 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. Suppose you are 45 and have a $50,000 face amount, 15-year, limited-payment, Yes. 401(k) plans. A. Waiver of premium disability benefit B. All rights reserved. You can convert your policy from permanent to term at any time. A. C. Pay for a vacation. 69. Protection against loss of life for a specified term. The settlement option in which the company acts as trustee and pays interest to the beneficiary is called A. Lump-sum payment. A. Adjustable life B. \text{Investments (at fair value, cost of \$162,000)}&&\underline{\text{\hspace{5pt}158,400}}\\ B. It will take your youngest child 15 more years to reach 18. Megan wants to purchase a life insurance policy that will allow her to invest in stock. 82. Contract. The policy loan provision means that A. What is their total insurance need using the DINK method? Jeff Willis has five kids and more debt than the, average family. insurance needs using the DINK method. 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. Sum Assured as chosen by the Working Spouse under the Plan. Whole life B. In many cases, the answer is yes. 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 Life expectancy for men is longer than that for women. Which of the following riders provided an additional benefit for his heirs? Limited installment payment. Jumping the Wealth Curve with Edward E. Bao Jr. 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. 25% C. 50% D. 75% E. 95%, 32. NOT INSURED BY ANY STATE OR FEDERAL AGENCY. D. Limited payment. \textbf{Statement of Financial Position}\\ The settlement option that pays the life insurance proceeds in equal periodic payments for a specified number of years after your death is called A. Lump-sum payment. This is a very common type of policy taken by homeowners who want to support their children financially. A.M. Best. \end{array} Use the easy method to determine how much insurance she should carry. Which of the following provisions should she take action on? What kind of policy would she want to purchase? 38. 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. The income replacement approach is a method of determining the amount of life insurance you should purchase. Which of the following provisions allows her to keep her coverage if she is a couple of weeks late with paying her premium? is your life insurance need based on the easy method? Adjusting entries for the period were made to increase Allowance for Doubtful Accounts by $20, to record depreciation expense of$26,400 (charged 70 percent to instruction and 30 percent to academic support), to adjust tuition revenue for an increase in unearned revenue of $10, and to recognize an increase in fair value of investments of$4,700 ($790 was related to investments restricted for scholarships,$1,610 was related to the permanent endowment, the remainder was related to net assets without donor restrictions). Fixed Insurance products and services offered through Ash Brokerage or Smallwood Associates, Ltd. Collections on Tuition and Fees Receivable totaled$222,600. Enrolling in a course lets you earn progress by passing quizzes and exams. 27. 47. Each of you False. Required Reserve Ratio Formula | How to Calculate Required Reserves, Monthly Payment Formula | How to Calculate Loan Payments. Which of the following life insurance policies should she apply for? 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. C. You can convert your term policy to a permanent policy. Fixed Annuities are long-term insurance products. 5% B. Earnings Per Share Overview & Formula | How to Calculate EPS, Capital Budgeting Decisions | Examples, Techniques & Analysis, Activity-Based Costing | Formula, Examples & Benefits. So your life insurance requirement is 15 $10,000 = $150,000. Holding Period Return (HPR) Formula & Examples | What is HPR? \textbf{STEINER COLLEGE}\\ 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. Your annual premium is $1,000. 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. Please know the associated risks and the applicable charges, from your insurance agent or the intermediary or policy document issued by the insurance company. A term insurance plan will also help to save taxes on the premiums under Section 80C of the IT Act.

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