nonworking spouse whose youngest child is 5 years old? to work after your death. Suppose you are 45 and have a $50,000 face amount, 15-year, limited-payment, The investment risk in investment portfolio is borne by the policyholder. The provisions of Income Tax Act, 1961 are subject to amendments made by the government from time to time. is your life insurance need based on the easy method? E. Made all annuities tax free. Francisco and Maria have three children and want to complete a detailed worksheet to determine the amount of life insurance they need to purchase. 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. 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. Its free, with no obligation. Protection against loss of life for a specified term. E. A policy whose coverage stops after a period of time. Your premium will not increase when you renew it. C. Final life payment. D. A benefit during the period it covers, such as 1, 5, 10, or 20 years. Buying from a financially strong company B. If their youngest child is 5 years old, how much do they need? Unit linked Insurance products are different from the traditional insurance products and are subject to the risk factors. What. Welcome to the Wealth Curve Talk Podcast. The recommendation is to have seven to ten years of life insurance. This is a method that has you multiplying the number of years it takes the youngest child to reach 18 by $10,000. Create your account, 18 chapters | She was recently divorced. Firstly, spouses who work part-time or who do not work have insurability interest, which should be maximized. 38. How do I know if my life insurance has cash value? Solved Problem 12-10 Using the "Nonworking" Spouse Method to | Chegg.com E. The policy requires that you pay a specified premium each year for the rest of your life. Amy has worked with students at all levels from those with special needs to those that are gifted. 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? 'QP2?^03dw 6x ;!;RTkz}Sc;)iI You can get your paper edited to read like this. This method is called the non-working spouse method. Catherine Carey has made the choice to stay home, and raise her three kids while her husband works. C. Your premium will not increase because your policy is renewable. Both you and the spouse are covered throughout the policy term for your respective separate sums assured. Allison is a "nonworking" spouse who devotes all of her time to household activities. 68. Course Hero is not sponsored or endorsed by any college or university. 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. Academic support 23,300 D. You can convert your policy to a permanent type at the end of the term. Fixed Insurance products and services offered through Ash Brokerage or Smallwood Associates, Ltd. False. Can I stay on my parents insurance if I file taxes independently? loans. Annuity Formula, Calculation & Examples | What is an Annuity? Buying from professionally qualified representatives C. Ignoring the reputations of local agencies D. Working with a representative who will help you select the proper kind of protection within your financial boundaries E. Asking family or friends for recommendations to choose an insurance company. Table lamp. This next method is for those with just one wage earner in the family. 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. Which of the following is the process of getting oxygen from the environment to the tissues of the body? The rule of 70 is a means of estimating the number of years it takes for an investment or your money to double. Let's review. If you have a conversion term policy, A. Beneficiary. \quad\text{Bonds payable}&&\underline{\text{\hspace{10pt}99,000}}\\ Pay off a mortgage. Easy method B. Dual income, no kids method C. Formal calculation method D. Nonworking spouse method E. Family needs method. We reviewed their content and use your feedback to keep the quality high. $50,000 C. $80,000 D. $100,000 E. $180,000 B. Before you purchase, be sure to talk to your financial professional about the annuitys features, benefits, and fees and whether the annuity is appropriate for you, based on your financial situation and objectives. Using the easy A. Waiver of premium disability benefit B. D. Life income option. 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. D. Insurer. In other words, if a person's death would cause you significant financial hardship, it's an insurable interest. Claim Settlement Ratio Fell free get in touch with us via phone or send us a message. 25,00,000 which will remain same throughout the Policy Term. A. $4,000. A.M. Best. Using the DINK method, what should be your need for life insurance? Polly wants the opportunity to change the amount she pays for her annual premium through the life of her insurance policy without changing her coverage. I highly recommend you use this site! The most common settlement option for a life insurance program is the lump-sum payment. C. Convertible term. If the policy exists, you can ask if you're a beneficiary. Contract. One of the most common questions we hear is, Can my non-working spouse qualify for life insurance? The answer is yes! Your needs will also change over time, so your life insurance needs may also change over time. Exam 3 Flashcards by Sam Cohen | Brainscape Each earns $45,000 annually. E. None of these. A person who is named to receive the benefits from an insurance policy is a(n) A. 25% C. 50% D. 75% E. 95%, 32. \quad\text{Total assets}&&\underline{\underline{\text{\$\hspace{1pt}455,670}}}\\[5pt] \text{Net assets:}\\ 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 . $12,000 B. Plus, get practice tests, quizzes, and personalized coaching to help you 36. Donald and Charlene are married and do not have any children. You estimate that funeral expenses will be $5,000. Look through financial records. C. Moodys. old? C. Identified annuities to be the same as certificates of deposit. The goal of this approach is to replace the primary breadwinner's salary for a predetermined number of years. If one should die, they think that funeral expenses would be $12,000. A. A. Which of the following policies would meet her needs? Marianne and Roger are in good health and have reasonably secure careers. The maturity benefit is Rs. Molly is thinking about buying a life insurance policy, but she is not sure about how much she will need in the next few years. E. All of these affect the price. MAY LOSE VALUE, INCLUDING LOSS OF PRINCIPAL. Now, if it's just you and your spouse, you can use the DINK method. Life insurance companies understand that taking care of the home is invaluable and is equally important as earning an income for the household. A. C. The mortality rate it expects among its policy holders. 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. Further, you estimate that your funeral will cost $6,000. 5. What method. In many cases, the answer is yes. Continuing a mini-series on life insurance, he discusses life insurance for spouse (who does not work or who works part-time). Work with our consultant to learn what to alter. Now, you take this number and subtract your available assets from this number. 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. B. A. Incontestability clause B. Misstatement of age provision C. Naming a beneficiary D. Policy reinstatement E. The grace period. B. C. Her contingent beneficiaries. Earnings Per Share Overview & Formula | How to Calculate EPS, Capital Budgeting Decisions | Examples, Techniques & Analysis, Activity-Based Costing | Formula, Examples & Benefits. What percentage of your income should you spend on life insurance? 44. \quad\text{Unearned revenue}&&\text{900}\\ 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. Using the "nonworking" spouse method, what should, be the life insurance needs for a family whose youngest, 94. So your life insurance requirement is 15 $10,000 = $150,000. A. Chapter 10 true and false Flashcards | Quizlet Your annual income is $100,000. Which of the following riders should he consider? This website helped me pass! 93. And, lastly, the family need method is 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 from it. You and your spouse have the following debts: Using the nonworking spouse method, what should be the life insurance needs for a GST On Life Insurance Of course, it would be a tragedy were something to happen to your spouse. What are the stages of the General Adaptation Syndrome (GAS)? Holding Period Return (HPR) Formula & Examples | What is HPR? Do both you and your spouse need life insurance? You may need to change your coverage amounts when this happens. I feel like its a lifeline. D. Your premium will not increase when you renew it. D. 30 days. The rule of 70 is a calculation to determine how many years it'll take for your money to double given a specified rate of return. Limited installment payment. Estimate how much life insurance Tim and Allison should carry. B. \quad\qquad\text{Total liabilities and net assets}&&\underline{\underline{\text{\$\hspace{1pt}455,670}}}\\ True. Sum Assured as chosen by the Working Spouse under the Plan. Under the Multiple of Income method of estimating, life insurance needs, what important factor is excluded, 98. Wendy has had a life insurance policy for five years. What kind of policy would she want to purchase? What is non working spouse method? - InsuredAndMore.com Expenses incurred resulted in the release of $7,320 in net assets with donor restrictions. $13,000 B. E. Proceeds left with the company. Which of the following allows an individual to receive a fixed amount of income over a certain period of time, or over his or her life? Group life C. Limited life D. Universal life E. Variable life, 51. Which statement is correct regarding mutual life. D. The policy features. Life Insurance Underwriting C. Tell you why her product is better than the competitors. Catherine Carey has made the choice to stay home and raise her three kids while her husband works. succeed. C. 10 days. 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. In case of death of the Life Assured during the Policy Term, Sum Assured on Death basis the Coverage option opted, less cumulative monthly income(s) already paid shall be payable. B. 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. Answered: Shaan and Anita are married and have | bartleby There are many situations to consider, and the methods you just heard about may or may not fit your needs. What is the cost of living in California? Another name for permanent life insurance is A. Megan wants to purchase a life insurance policy that will allow her to invest in stock. copyright 2003-2023 Study.com. A. Incontestability clause B. Misstatement of age provision C. Naming a beneficiary D. Policy reinstatement E. The grace period, 55. Ask a Family Member's Financial Advisor. What happens if you dont get life insurance? fhp>5UN.es r}"n ~c|A1mHNK|i^f>Gk aYT)s7z~fO9~krcVr2@)KTQirUQ!AP+jthG;l!9|R^7|o To unlock this lesson you must be a Study.com Member. Todd plans to purchase a life insurance policy from a stock life insurance company. 1. \end{array} Another name for temporary life insurance is A. The last thing to realize is that calculating your life insurance needs can be tricky. 81. B. Dun & Bradstreet. Estimate your total C. The policy owner can borrow any amount up to the cash value of the policy. D. A fixed annuity is one where the investments made into the annuity are variable. Life Insurance for Spouse (Non-Working): All You Need To Know A. Adjustable life B. Whole life. A process has specification limits of LSL 5 540 and USL 5 550. Using the nonworking spouse method, what should be the life You heard about several methods you can use to calculate your life insurance needs. Not necessarily. What happens if you don't pay your health insurance deductible? The timing for payments of a variable annuity are variable. b. the number of each item you have in stock A term insurance plan will also help to save taxes on the premiums under Section 80C of the IT Act. Best Investment Options in India Deferred annuity C. Whole life insurance D. Immediate annuity E. Universal life insurance. Or, you can call us at (800) 797-1000. The "Nonworking" spouse method of estimating life insurance includes factors such as Social Security and liquid assets. Jeff Willis has five kids and more debt than the, average family. They plan to purchase life insurance using this formula: Current income 7 70%. What kind of policy would you want to purchase? D. Fund expense. Here are the features of adding a Spouse Cover to your iSelect Smart360 Term Plan: Spouse Cover With the iSelect Smart360 Term Plan. D. An annuity is more advisable for people in poor health than for those who are likely to live longer than average. 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. Get unlimited access to over 88,000 lessons. Which of the following provisions prevents the life insurance company from refusing to pay his beneficiaries because of his original misrepresentation? Easy method B. Dual income, no kids method C. Formal calculation method D. Nonworking spouse method E. Family need method, 31. 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? 65. Whole Life Insurance Georgia was supposed to pay her premium by the 15th of the month. 2003-2023 Chegg Inc. All rights reserved. B. Limited installment payment. E. All of these. 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. You are a dual-income, no-kids family. When it comes to purchasing life insurance, you need to make sure you are purchasing enough coverage to cover all your financial needs upon your death. 41. 27. Surrender charge. 26. Competition among companies with comparable policies can affect the price a company charges for life insurance. In most cases, the life insurance offered to the stay-at-home spouse depends on the coverage and income of the earning counterpart. C. Decreasing term. They plan to purchase life insurance using this formula: (18 Youngest childs age) $10,000. C. A life insurance policy allows the beneficiary to receive proceeds at some future date. Term C. Credit life D. Endowment life E. Adjustable life, 53. What is the most important part of an insurance agents job? 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. What kind of policy is he planning to purchase? You can convert your policy to a permanent type at the end of the term. 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. 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 the DINK method, what should be your need for life insurance? \textbf{STEINER COLLEGE}\\ $30,000 B. E. Cash value life. D. Life income option. Which method are they using to determine their life insurance needs? Ask to set up a Wealth Curve conversation. E. Whole life insurance plans. $40,000 B. What impact do they have on your wealth potential. A. the income provider's salary. What will be the surrender value of LIC policy after 5 years? Answer . 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. It also collected $820 of Pledges Receivable that were unrestricted. A. Estimating Life Insurance Needs Using the DINK Method You Can someone be denied homeowners insurance? Shaan and anita are married and have two children, ages 9 and - Brainly D. Spend money. nonworking spouse whose youngest child is 6 years old? It accumulates cash value. Prepare journal entries in good form to record the foregoing transactions for the year ended June 30, 2020. Whole life B. A young employee is buying individual life insurance and is worried about the impact inflation will have on his life insurance coverage. B. You and your spouse are in good health and have reasonably secure jobs. 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. It equals the cost of replacing the property. E. It is better to fund an IRA, Keogh, or 401(k) before buying an annuity. The "Nonworking" spouse method of estimating life insurance includes factors such as Social Security and liquid assets. Cash value. During the year, charges for tuition and fees were $244,500; scholarships were$16,300; and tuition waivers for scholastic achievement were $5,100. B. A. B. For example, say. D. Allowed annuities to be purchased for individual retirement accounts. This method is used only to calculate child care needs, not the total financial needs of the family. This is a method that has you adding half of all your debts plus funeral expenses. C. Administrative fee. Amy bought a life insurance policy and named Ben as her beneficiary. Institutional support 28,500. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these funds, their future prospects and returns. 24. Using Exhibit 12-1, determine the average numbers of additional years males alive at PPTX Life Insurance Chapter Fourteen - University of Arkansas Your spouse expects to continue to work after your death. \text{Investments (at fair value, cost of \$162,000)}&&\underline{\text{\hspace{5pt}158,400}}\\ Limited installment payment. E. Proceeds left with the company. A. A. B. 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} Likewise, when using the rule of 72, the number 72 is used in the calculation. B. Mortality and expense risk charge. In this case, 18 years. Goods & Services Tax will be charged on the premium amount. Your rates will vary based on your unique circumstances, just as they would if you were single. The ending balance in Accounts Payable and Accrued Liabilities was$1,935. Certificates of deposit. Let us have a look at your work and suggest how to improve it! The return on its investments. was specifically designed for someone in her situation? Sum Assured fixed at Rs. Whole life. All other trademarks and copyrights are the property of their respective owners. Collections on Tuition and Fees Receivable totaled$222,600. 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. Which of the following provisions will affect the amount of money his beneficiaries will receive? This method is called the non-working spouse method. This is based on data provided by Quotacy for a 40-year-old buying a 20-year, $500,000 term life policy, which is the most common term length and amount sold. Benefits of Life Insurance The second is the DINK method. B. 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. \text{Short-term investments}&&\text{7,666}\\ Which of the following is NOT temporary insurance? C. It is more expensive than term insurance. Life Insurance Under this method, the original principal that you save will still remain at the end of the income period. Factors That Affect Life Insurance Premiums Which of the following statements is correct? 51,84,468 which includes Guaranteed Sum Assured on Maturity, accrued Guaranteed Yearly Additions and Guaranteed Loyalty Addition. 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. insurance needs using the DINK method. Estimate how much life insurance Shaan and Anita should carry. B. The Tax Reform Act of 1986 A. What are the four methods of determining life insurance needs? Dividend policy B. Nonparticipating policy C. Mutual policy D. Participating policy E. Stock policy. \textbf{Assets}\\ 200 lessons. When using the rule of 70, the number 70 is used in the calculation. They plan to purchase life insurance using this formula: (18 - Youngest child's age) $10,000. Fixed annuity B. Insurance Need: ? Your annual premium is $1,000. 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. If you want to purchase term insurance, you will receive all of the following except A. T&C apply. A. Adjustable life B. Life insurance companies do realize that taking care of the house is an equally important as earning an income for the household. Which of the following riders should he consider? B. Term insurance B. 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. A Limited Payment Policy is a while life policy that requires premiums to be paid for a certain period. A. It helped me pass my exam and the test questions are very similar to the practice quizzes on Study.com.