B. E. All of these. We look forward to speaking with you. Note: The categorization of Spouse into Working and Non-Working will be as per the Companys Board Approved Underwriting Policy (BAUP). A. The process standard deviaton Estimating Life Insurance Needs Using the DINK Method You All other trademarks and copyrights are the property of their respective owners. $10,000 + ($30,000 / 2) + ($11,000 / 2) + ($5,000 / 2) = $10,000 + $15,000 + $5,500 + $2,500 = $33,000. Create your account, 18 chapters | . 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. 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). If one should die, they think that funeral expenses would be $12,000. Get unlimited access to over 88,000 lessons. 101. \text{Prepaid assets}&&\text{1,364}\\ Tax benefits/savings are subject to provisions under section 80 C, 80 CCC, 80 D, 10(10A), 10(10D) and other sections of the Income Tax Act, 1961. Another name for a straight term policy is A. Renewable term. This is a method that has you adding half of all your debts plus funeral expenses. An error occurred trying to load this video. Something went wrong. Solved Problem 12-10 Using the "Nonworking" Spouse Method to | Chegg.com B. A. The rule of 70 is a means of estimating the number of years it takes for an investment or your money to double. Which of the following is a poor choice for the amount of protection offered for an individual? 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! A person who is named to receive the benefits from an insurance policy is a(n) A. If you have a multiyear level term policy, A. The most common settlement option for a life insurance program is the lump-sum payment. \textbf{(amounts in thousands)}\\ Ag;sE2/yNNF;eF]!hiV^r^l PK ! $50,000 C. $80,000 D. $100,000 E. $180,000 B. Insurance Contract Characteristics | Traits Specific to Insurance Contracts, Future Value Formula & Examples | How to Calculate Future Value. Which of the following policies would meet her needs? \quad\text{With donor restrictions}&\underline{\text{\hspace{5pt}229,940}}\\ 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. How much term does a non-working spouse get? The Tax Reform Act of 1986 A. Sum Assured as chosen by the Working Spouse under the Plan. Allison is a "nonworking" spouse who devotes all of her time to household activities. Which of the following policies should she buy? You own a home with a mortgage of $110,000, and Group life C. Limited life D. Universal life E. Variable life, 50. If you have a renewable term policy, A. 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. 5% B. 73. This is also the most thorough method. 25,00,000 which will remain same throughout the Policy Term. Is equipment floater the same as inland marine? 78. You pay premiums each year for the rest of your life. Tuition waivers of $17,300 for students serving as teaching assistants for instruction were accrued. C. Identified annuities to be the same as certificates of deposit. Read this lesson to learn what methods you can use to calculate your requirements. E. Proceeds left with the company. Contract. ht _rels/.rels ( J1!}7*"loD c2Haa-?_zwxm \text{Tuition and fees receivable (net of doubtful accounts of \$12)}&&\text{230}\\ Competition among companies with comparable policies can affect the price a company charges for life insurance. Which of the following is NOT a type of permanent life insurance? C. Ordinary life. 59. In this case, the only type of life insurance policy you can buy is a guaranteed issue policy. Insurance Need: . \text{Cash and cash equivalents}&&\text{\$\hspace{18pt}734}\\ 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. Under this method, the original principal that you save will still remain at the end of the income period. In other words, you will have to show why you want to insure the individual. A young employee is buying individual life insurance and is worried about the impact inflation will have on his life insurance coverage. Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits, 61. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Your premium will not increase when you renew it. Whether you're married, domestic partners or simply sharing a life with someone you love, taking out a pair of affordable term life insurance policies can provide both financial security and peace of mind. c. the charge per 100 pounds to ship goods by truck B. A. Estimate your total Annuities are often purchased for A. With the right term insurance policy in place, stay prepared for any adversity. \textbf{Statement of Financial Position}\\ 80. The cholesterol level in children follows a normal distribution with a mean level of 175mg/dL175 \mathrm{mg} / \mathrm{dL}175mg/dL and a standard deviation of 35mg/dL35 \mathrm{mg} / \mathrm{dL}35mg/dL. \end{array} Plus, get practice tests, quizzes, and personalized coaching to help you You and your spouse have the following debts: Using the nonworking spouse method, what should be the life insurance needs for a All of the following are major rating agencies for insurance except A. Most participating policies are sold by: 102. A. C. Temporary insurance. More thorough because it also considers employer provided insurance, Social Security benefits, and liquid assets. I highly recommend you use this site! 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One such cover by Canara HSBC Life Insurance Company is the iSelect Smart360 Term Plan. C. Individual retirement accounts (IRAs). You may need to change your coverage amounts when this happens. Further, you estimate that your funeral will cost $6,000. Life insurance companies pay out the proceeds when the insured dies and the beneficiary of the policy files a life insurance claim. E. None of these is correct. 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. 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. 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. The first is the easy method. C. Your premium will not increase because your policy is renewable. 2. Replacement value is a method for determining what an insurance company will pay you in case your property is stolen or destroyed. 5EPhGD!A'b1^:x[)(2##19pH`G0v#/(5;dI(D Term insurance C. Whole life insurance D. Variable annuity E. 401(k). You have no other debt. $4,000. Term insurance B. E. 60 days. Using the "nonworking" spouse method, what should be the life insurance need for a family whose youngest child is 10 years old? Which of the following households most likely has the greatest need for life insurance? method, what should be your need for life insurance? A. Incontestability clause B. Misstatement of age provision C. Naming a beneficiary D. Policy reinstatement E. The grace period, 55. She, wants to determine her insurance needs. C. The policy owner can borrow any amount up to the cash value of the policy. Instruction$86,100 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. This method is called the non-working spouse method. 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C. It is more expensive than term insurance. Using Exhibit 12-1, determine the life expectancy of a 40-year-old male. Table lamp. Straight life C. Ordinary life D. Term life E. Cash value life. Which of the following provisions prevents the life insurance company from refusing to pay his beneficiaries because of his original misrepresentation? E. Child. Which of the following statements is correct? Bonnie is most concerned about being able to buy additional insurance without undergoing medical exams. 5 days. Your needs will also change over time, so your life insurance needs may also change over time. 47. D. Limited payment. Features of Life Insurance
insurance needs using the DINK method. D. Spend money. Please consult your independent tax advisor for details. 2003-2023 Chegg Inc. All rights reserved. loans. This website helped me pass! Deferred annuity C. Whole life insurance D. Immediate annuity E. Universal life insurance. D. Life income option. Who will receive the benefits from her policy? 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. A. Waiver of premium disability benefit B. A. A deferred annuity allows an individual to receive payments from an annuity immediately. Another name for temporary life insurance is A. D. Term. Determine an estimated regression equation that can be used to predict the overall score given the score for Shore Excursions. At minimal, you want a policy to provide at least 5 years worth of income replacement, until you can balance out things. A process has specification limits of LSL 5 540 and USL 5 550. Life Insurance for Spouse (Non-Working): All You Need To Know Beneficiary. An individual can take out a loan on his or her term policy. Using Exhibit 12-1, determine the average numbers of additional years males alive at Estimate how much life insurance Tim and Allison should carry to cover Allison. We are living in times of uncertainty. Jeff and Erica have two children. 35. About ___ of the U.S. life insurance companies are stock companies. The timing for payments of a variable annuity are variable. 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. Solved Problem 12-10 Using the "Nonworking" Spouse Method to | Chegg.com Try refreshing the page, or contact customer support. Headquartered at 199 Broad Street, Red Bank NJ 07701-2056 D. Term life insurance plans. MAY LOSE VALUE, INCLUDING LOSS OF PRINCIPAL. Income replacement is one of the main reasons many people, especially those who have loved ones depending on them financially, have life insurance. Which of the following riders provided an additional benefit for his heirs? Whole life B. Renewable term C. Convertible term D. Decreasing term E. Multiyear level. \qquad\text{Total net assets}&&\underline{\text{\hspace{5pt}333,940}}\\ Protection against loss of life for a specified term. What kind of policy would you want to purchase? This method has you multiplying the number of years it takes the youngest child to reach 18 by $10,000. A term insurance plan will also help to save taxes on the premiums under Section 80C of the IT Act. A. Please check your entries and try again. b. the number of each item you have in stock 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. Dividend policy B. Nonparticipating policy C. Mutual policy D. Participating policy E. Stock policy, 34. This problem has been solved! 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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. method, what should be your need for life insurance? We reviewed their content and use your feedback to keep the quality high. E. An insurance company will calculate the annual amounts to pay each person for an annuity. What will be the surrender value of LIC policy after 5 years? Catherine Carey has made the choice to stay home and raise her three kids while her husband works. 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. DINK stands for double income, no kids. In contrast to the biopsychosocial model, the biomedical model views health as ___________. D. You must pay interest on any outstanding policy loans. $343,000 C. $490,000 D. $700,000 E. $750,000, 86. A. Adjustable life B. What is the cost of living in California? old? 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. 24. Which of the following products allows an individual to receive payments beginning now? Not necessarily. How to Estimate Life Insurance Requirements - Study.com Chapter 10 Personal Finance - Subjecto.com The recommendation is to have seven to ten years of life insurance. the income provider's salary. Using the nonworking spouse method what should be the life insurance Sum Assured as chosen by the Working Spouse under the Plan. Riders in Insurance
25% C. 50% D. 75% E. 95%, 32. D. A benefit during the period it covers, such as 1, 5, 10, or 20 years. Ask a Family Member's Financial Advisor. Your annual income is $60,000. Certificates of deposit. Which of the following statements is incorrect? 2.Guaranteed Benefits - Provided all premiums have been paid as and when due and the policy is in-force. B. Multiyear level term. 74. B. Renewable term. 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. Chapter 10 true and false Flashcards | Quizlet 67. E. Independently wealthy adult. Your spouse expects to continue to work after your death. The question is, how big are yours? Adult child living with parents. $18,000 C. $50,000 D. $130,000 E. $180,000, 84. A. You estimate that funeral expenses will be $5,000. Here's how to calculate the estimated life insurance need: 1. There are many situations to consider, and the methods you just heard about may or may not fit your needs. You have to drive them to and from school, oversee homework and music practice. Whole life B. Most modern insurance covers let you add your spouse under the same policy for an additional premium, often lower than your own premium. Todd plans to purchase a life insurance policy from a stock life insurance company. In many cases, the answer is yes. The Policy Term, Premium Payment Term and the premium payment mode remains the same for the Spouse, as yours. This is a method that has you multiplying the number of years it takes the youngest child to reach 18 by $10,000. You policy will continue for one year. - 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? An interest-adjusted index is a method of evaluating the cost of life insurance by taking into account the time value of money, The lower the interest-adjusted index, the lower the cost of a 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. d. a way of shipping goods to customers \text{Liabilities:}\\ 51,84,468 which includes Guaranteed Sum Assured on Maturity, accrued Guaranteed Yearly Additions and Guaranteed Loyalty Addition. Using time value of money and assuming you could invest your A. A. B. 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, for example, your account earns 4 percent, divide 72 by 4 to get the number of years it will take for your money to double. participating policy (dividends will be used to build up the cash value of the policy). 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. 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. Variable life C. Universal life D. Adjustable life E. Decreasing term life. Life insurance companies understand that taking care of the home is invaluable and is equally important as earning an income for the household. Exam 3 Flashcards by Sam Cohen | Brainscape PK ! 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. Group life C. Limited life D. Universal life E. Variable life, 51. During the year, charges for tuition and fees were $244,500; scholarships were$16,300; and tuition waivers for scholastic achievement were $5,100. NOT INSURED BY ANY STATE OR FEDERAL AGENCY. Its free, with no obligation. Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits, 64. What happens if you dont get life insurance? It's 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. \text{Short-term investments}&&\text{7,666}\\ Using the "nonworking" spouse method, what should be the life insurance needs for a family whose youngest child is 5 years old? 401(k) plans. 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. Which of the following provisions allows her to keep her coverage if she is a couple of weeks late with paying her premium? 1.5 lacs under Income Tax Act, 1961 and tax benefit may vary from assessee to assessee. When assessing a client with partial-thickness burns over 60% of the body, which finding should the nurse report immediately? This method is called the non-working spouse method. Secondly, consider the value of the unpaid work done by a spouse who spends much of their time raising children. The average cost of life insurance is $27 a month. $40,000 B. B. D. Insurer. The ending balance in Accounts Payable and Accrued Liabilities was$1,935. NOT FDIC INSURED. The DINK method has you adding half of all your debts to your funeral expenses. $12,000 in 15 years. In this case, 18 years. Jumping the Wealth Curve with Edward E. Bao Jr. Call the State Commissioner's Office for your State. D. Life income option. 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 are the stages of the General Adaptation Syndrome (GAS)? 45. is your life insurance need based on the easy method? $140,000 B. A. This is a method that has you multiplying the number of years it takes the youngest child to reach 18 by $10,000. E. None of these. 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. D. The beneficiary can borrow any amount up to the total benefit. Using the DINK method, what should be your need for life insurance? D. A fixed annuity is one where the investments made into the annuity are variable. The "Nonworking" spouse method of estimating life insurance includes factors such as Social Security and liquid assets. Your annual premium is $1,000. 25. 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. Anita is a "nonworking" spouse who devotes all of her time to household activities. The death benefit will be increased by the amount of an outstanding policy loan. C. It is better to fund a variable annuity before fully funding your IRA, Keogh, or 401(k). 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. A. Incontestability clause B. Misstatement of age provision C. Naming a beneficiary D. Policy reinstatement E. The grace period, 57.