the nonworking spouse method of estimating life insurance the nonworking spouse method of estimating life insurance

C. The policy will return all premiums if you survive to the end of the policy. Your spouse expects to continue to work after your death. 96. D. Spend money. 2003-2023 Chegg Inc. All rights reserved. How to Buy Life Insurance: Steps & Choices, App. If the policy exists, you can ask if you're a beneficiary. Securities offered through Purshe Kaplan Sterling Investments, MemberFINRA/SIPCHeadquartered at 80 State Street, Albany, NY 12207. Non-Working Spouse Method. All other trademarks and copyrights are the property of their respective owners. A. Adjustable life B. A person who is named to receive the benefits from an insurance policy is a(n) A. 68. $86,000 C. $98,000 D. $172,000 E. $217,000. Your annual premium is $1,000. You have no plans to increase the size of your family in 36. Sum Assured fixed at Rs. The first method is called the easy method. Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits, 63. 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. 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. Protection against loss of life for a specified term. So your life insurance requirement is 15 $10,000 = $150,000. What is the amount of life insurance they should carry using the "nonworking" spouse method? Steiner is a private college. copyright 2003-2023 Study.com. Were your family to lose that, you lose all of that labor. What is the amount of life insurance they should carry using the easy method? You and your spouse have the following debts: Using the nonworking spouse method, what should be the life insurance needs for a Each plans to continue to work after the other one dies. Using the DINK method, what should be your need for life insurance? The first is the easy method. Estimate how much life insurance Tim and Allison should carry. If you find the policy or discover paperwork that indicates a policy exists, contact the insurer. GST On Life Insurance Factors That Affect Life Insurance Premiums - Definition & Examples, Strategies for Effective Consumer Relations, Cross-Selling in Retail: Techniques & Examples, Working Scholars Bringing Tuition-Free College to the Community. Pam just started working at XYZ Widget Company and finally wants to get insurance coverage. A. PDF Life Insurance Needs: Rules of Thumb - Wickham Services Frank, age 38, was hit by a car and died. A. Is equipment floater the same as inland marine? Look through financial records. C. Convertible term. 2,10,000, (excluding taxes) premium payment term 10 years and policy term 20 years. 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. 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. loans. 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 of the following statements is correct? The maturity benefit is Rs. Beneficiary. With an available asset of $500,000 in savings, your life insurance requirement is $1,355,000 - $500,000 = $855,000. 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. E. All of these affect the price. The Wealth Curve Talk with John L. Smallwood. D. Insurer. \textbf{STEINER COLLEGE}\\ Watch on to see what they are. Term insurance B. Single adult living alone. C. Tell you why her product is better than the competitors. The Tax Reform Act of 1986 A. Use Exhibit 1-B. Marianne and Roger are in good health and have reasonably secure careers. Collections on Tuition and Fees Receivable totaled$222,600. B. the income provider's salary. Suppose that yours is a typical family. What happens if you don't pay your health insurance deductible? Life insurance companies issue a lot of paperwork. 5. participating policy (dividends will be used to build up the cash value of the policy). 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. Under this plan option, a Monthly Survival Income shall be payable at the beginning of each month, starting from the Policy Anniversary coinciding with or following the Life Assured attaining age 60 years (last birthday) which shall continue till the end of the Policy Term or the death of the Life Assured whichever is earlier. This method is meant for those with typical families where both spouses work, are in good health, with average debt, and with no more than three kids. One of the most common questions we hear is, Can my non-working spouse qualify for life insurance? The answer is yes! \text{Prepaid assets}&&\text{1,364}\\ Prepare journal entries in good form to record the foregoing transactions for the year ended June 30, 2020. Term insurance C. Whole insurance D. Variable annuity E. 401(k), 77. 27. 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. Sum Assured fixed at Rs. B. Dun & Bradstreet. All of the following are major rating agencies for insurance except A. Ask a Family Member's Financial Advisor. 2. Solved Problem 12-10 Using the "Nonworking" Spouse Method to | Chegg.com A. 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. A. 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. 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. The sooner a person is likely to die, the lower the premiums he or she will pay. A. Incontestability clause B. Misstatement of age provision C. Naming a beneficiary D. Policy reinstatement E. The grace period, 57. Which of the following is NOT temporary insurance? Work with our consultant to learn what to alter. B. Dividend policy B. Nonparticipating policy C. Mutual policy D. Participating policy E. Stock policy. What is the cost of living in California? This term life policy will guarantee that you will pay the same premium for the duration of your policy. \text{Short-term investments}&&\text{7,666}\\ \quad\text{Without donor restrictions}&\text{\$\hspace{1pt}104,000}\\ Annuities are often purchased for A. 38. Its free, with no obligation. Group life C. Limited life D. Universal life E. Variable life, 51. Related to the expenses incurred: prepaid assets of $534 were used,$4,776 of the expenses were accrued, and the remaining expenses were paid. 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. Welcome to the Wealth Curve Talk Podcast. b. the number of each item you have in stock Earnings Per Share Overview & Formula | How to Calculate EPS, Capital Budgeting Decisions | Examples, Techniques & Analysis, Activity-Based Costing | Formula, Examples & Benefits. The insurance industry rule of thumb that a typical, family will need 70% of salary for seven years in order to, adjust for the financial consequences of a wage-earner's, death is known as which of the following estimation. 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. A. A. NOT INSURED BY ANY STATE OR FEDERAL AGENCY. The premiums & funds are subject to certain charges related to the fund or to the premium paid. B. T&C apply. 12-3 You are a dual-income, no-kids family. Call the State Commissioner's Office for your State. This method has you multiplying your annual gross income by 70% and then multiplying that by 7. A. Waiver of premium disability benefit B. 66. Life insurance policies, even joint policies, are rated based on your age, health conditions and coverage amount. method for him to use to calculate his insurance needs? ^Individual death claims settled and reported in public disclosures for FY 2021-22. The return on its investments. 25% C. 50% D. 75% E. 95%, 32. What happens if you dont get life insurance? C. It is better to fund a variable annuity before fully funding your IRA, Keogh, or 401(k). you owe $11,000 on car loans, $2,000 in personal debt, and $3,000 in credit card \quad\text{Total assets}&&\underline{\underline{\text{\$\hspace{1pt}455,670}}}\\[5pt] The rule of 70 is a means of estimating the number of years it takes for an investment or your money to double. d. 28. Group life C. Limited life D. Universal life E. Variable life, 52. Which of the following provisions should she take action on? Bill is worried about being able to pay his premium if he is totally and permanently disabled before age 60. NOT BANK GUARANTEED. B. 42. B. Multiyear level term. Dividend policy B. Nonparticipating policy C. Mutual policy D. Participating policy E. Stock policy, 34. How long is the grace period for health insurance policies with monthly due premiums? A. In this case, 18 years. Insurance Need: ? A. Adjustable life B. E. 60 days. \qquad\text{Total liabilities}&&\text{127,730}\\[3pt] Allison is a "nonworking" spouse who devotes all of her time to household activities. Most participating policies are sold by: 102. D. An annuity is more advisable for people in poor health than for those who are likely to live longer than average. 81. 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. A. Incontestability clause B. Misstatement of age provision C. Naming a beneficiary D. Policy reinstatement E. The grace period, 55. Multiply the number of years until the youngest child reaches 18 by $10,000. Agency Problem in Finance Overview, Duties & Examples | What is the Agency Problem? \textbf{June 30, 2019}\\ This is a very common type of policy taken by homeowners who want to support their children financially. Ag;sE2/yNNF;eF]!hiV^r^l PK ! Under this method, the original principal that you save will still remain at the end of the income period. Of course, it would be a tragedy were something to happen to your spouse. Estimate your total 25,00,000 which will remain same throughout the Policy Term. It is better to fund a fixed annuity before fully funding your IRA, Keogh, or 401(k). False. C. The mortality rate it expects among its policy holders. Can non-working spouses qualify for a life insurance? A. Adjustable life B. Fixed Annuities are long-term insurance products. old? Using the DINK method, what should be your need for life insurance? One of our associate will call you back shortly. E. The policy requires that you pay a specified premium each year for the rest of your life. Whole life B. Both you and the spouse are covered throughout the policy term for your respective separate sums assured. Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits, 62. \qquad\text{Total net assets}&&\underline{\text{\hspace{5pt}333,940}}\\ \end{array} It helped me pass my exam and the test questions are very similar to the practice quizzes on Study.com. When can I switch from original Medicare to an Advantage plan? If you have a renewable term policy, A. Home Flashcards Chapter 10 Personal Finance. $12,000 in 15 years. Use the easy method to determine how much insurance she should carry. \quad\text{Bonds payable}&&\underline{\text{\hspace{10pt}99,000}}\\ Which of the following products allows an individual to receive payments beginning now? Here's how to calculate the estimated life insurance need: 1. Investors in the Scheme are not being offered any guaranteed / assured returns. money elsewhere for a 7 percent annual yield, calculate the net cost of insurance. U ^s1xRpbD#rYNrJC.aeD=U]Sik@X6G[:b4(uH%-+0A?t>vT9. 1. 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} Using the sample chart that follows, find the column showing the age of the nonworking spouse 2. The investment risk in investment portfolio is borne by the policyholder. Is life insurance for married couples cheaper? Sell you the highest level of coverage available. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Buying from a financially strong company B. Under the Multiple of Income method of estimating, life insurance needs, what important factor is excluded, 98. D. Life income option. Further, you estimate that your funeral will cost $6,000. If you have a multiyear level term policy, A. Chapter 10 True False Flashcards | Quizlet The "Nonworking" spouse method of estimating life insurance includes factors such as Social Security and liquid assets. How to Estimate Life Insurance Requirements - Study.com Which of the following households most likely has the greatest need for life insurance? The Policy Term, Premium Payment Term and the premium payment mode remains the same for the Spouse, as yours. 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. \text{Tuition and fees receivable (net of doubtful accounts of \$12)}&&\text{230}\\ T&C Apply. Allison is a "nonworking" spouse who devotes all of her time to household activities. PPTX Life Insurance Chapter Fourteen - University of Arkansas 48. Net deposits returned to students totaled $10. Life insurance companies understand that taking care of the home is invaluable and is equally important as earning an income for the household. D. Term. This method is called the non-working spouse method. determine the minimum amount of life insurance you should carry. 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. What method would probably be the best. D. Life income option. 401(k) plans. Nonworking spouse method is a type of insurance policy where without working you can support your children until they turn 18 years old. The "Nonworking" spouse method of estimating life insurance includes factors such as Social Security and liquid assets. $10,000 + ($30,000 / 2) + ($11,000 / 2) + ($5,000 / 2) = $10,000 + $15,000 + $5,500 + $2,500 = $33,000. You can get your paper edited to read like this. 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! Not necessarily. D. Limited payment. C. Individual retirement accounts (IRAs). 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. insurance needs using the DINK method. Shaan and Anita are married and have two children, ages 4 and 7. In most cases, the life insurance offered to the stay-at-home spouse depends on the coverage and income of the earning counterpart. Let's review. 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. refunds of$11,200 were given. D. A deferred annuity allows an individual to receive payments from a life insurance policy at some future date. E. Credit life. D. Household with children. D. You must pay interest on any outstanding policy loans. We are living in times of uncertainty. A young employee is buying individual life insurance and is worried about the impact inflation will have on his life insurance coverage. Easy method B. Dual income, no kids method C. Formal calculation method D. Nonworking spouse method E. Family needs method, 30. Sum Assured as chosen by the Working Spouse under the Plan. d. a way of shipping goods to customers The total debts of you and your spouse include the following: mortgage, $200,000; auto loan, $16,000; credit card balance, $2,000; and personal debts of $4,000. A. Yes. Wendy has had a life insurance policy for five years. Anita is a "nonworking" spouse who devotes all of her time to household activities. 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. It accumulates cash value. We want to help you with that. $12,000 B. makes about $38,000 annually. A. 73. The timing for payments of a variable annuity are variable. Surrender charge. 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. You may not purchase insurance once your term ends. 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. At minimal, you want a policy to provide at least 5 years worth of income replacement, until you can balance out things. 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. Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits, 64. 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Chapter 10 true and false Flashcards | Quizlet A. Note: The categorization of Spouse into Working and Non-Working will be as per the Companys Board Approved Underwriting Policy (BAUP). Easy method B. Dual income, no kids method C. Formal calculation method D. Nonworking spouse method E. Family needs method, 28. This method is called the non-working spouse method. Experts are tested by Chegg as specialists in their subject area. This website helped me pass! Using Exhibit 12-1, determine the average numbers of additional years males alive at B. 37. Georgia was supposed to pay her premium by the 15th of the month. Course Hero is not sponsored or endorsed by any college or university. Bonnie is most concerned about being able to buy additional insurance without undergoing medical exams. You can take out a life insurance policy on your spouse if you have an insurable interest.