the nonworking spouse method of estimating life insurance

Your spouse expects to continue to work after your death. You own a home with a mortgage of $110,000, and D. Her parents. Deferred annuity C. Whole life insurance D. Immediate annuity E. Universal life insurance. Further, you estimate that your funeral will cost $6,000. Which of the following is NOT a factor that affects the price a company charges for a life insurance policy? \text{Liabilities:}\\ A. The "Family Need" Method. You have a spouse, two kids, a dog and a mortgage - a typical family. 'QP2?^03dw 6x ;!;RTkz}Sc;)iI Whole Life Insurance 700 cartons to be stored. Riders in Insurance \text{Prepaid assets}&&\text{1,364}\\ B. This is a very common type of policy taken by homeowners who want to support their children financially. makes about $38,000 annually. to work after your death. copyright 2003-2023 Study.com. 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? For example, say. Which of the following provisions should she take action on? Experts are tested by Chegg as specialists in their subject area. Academic support 23,300 He has since died. Use the easy method to determine how much insurance she should carry. d. 28. All guarantees are based on the continued claims paying ability of the issuing company. Easy method B. Dual income, no kids method C. Formal calculation method D. Nonworking spouse method E. Family needs method, 30. Under this method, the original principal that you save will still remain at the end of the income period. D. A deferred annuity allows an individual to receive payments from a life insurance policy at some future date. Using the nonworking spouse method, what should be the life insurance needs for a With an available asset of $500,000 in savings, your life insurance requirement is $1,355,000 - $500,000 = $855,000. 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. Wendy has had a life insurance policy for five years. Buying from a financially strong company B. 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. Investment Advisory Services provided by Smallwood Wealth Investment Management, LLC, an SEC registered investment advisor. Group life C. Limited life D. Universal life E. Variable life, 50. The maturity benefit is Rs. Ask a Family Member's Financial Advisor. This method has you multiplying the number of years it takes the youngest child to reach 18 by $10,000. Let us have a look at your work and suggest how to improve it! Answer . Using Exhibit 12-1, determine the average numbers of additional years males alive at A. Answer: 111, Using the "nonworking" spouse method, what should be the life insurance needs for a nonworking spouse whose youngest child is 5 years old? Variable life C. Universal life D. Adjustable life E. Decreasing term life. The premium shall be adjusted on the due date even if it has been received in advance. They plan to purchase life insurance using this formula: (18 - Youngest child's age) $10,000. Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits, 64. 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. E. Child. They have determined that their annual income is $70,000 and their net worth is now $150,000. Which of the following provisions prevents the life insurance company from refusing to pay his beneficiaries because of his original misrepresentation? DINK stands for double income, no kids. Using the "nonworking" spouse method, what should be the life insurance need for a family whose youngest child is 10 years old? Using the "nonworking" spouse method, what should, be the life insurance need for a family whose youngest, 95. Which statement is correct regarding mutual life. 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. The first is the easy method. 1.5 lacs under Income Tax Act, 1961 and tax benefit may vary from assessee to assessee. 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. 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What kind of policy would you want to purchase? Which of the following riders should he consider? D. Term life insurance plans. This is a method that has you multiplying the number of years it takes the youngest child to reach 18 by $10,000. The DINK method has you adding half of all your debts to your funeral expenses. A. Adjustable life B. The Policy Term, Premium Payment Term and the premium payment mode remains the same for the Spouse, as yours. Quickly and professionally. 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. Anita is a "nonworking" spouse who devotes all of her time to household activities. To unlock this lesson you must be a Study.com Member. a) A client with amyotrophic lateral sclerosis (ALS) tells the nurse, "Sometimes I feel so frustrated. D. Allowed annuities to be purchased for individual retirement accounts. Related to the expenses incurred: prepaid assets of $534 were used,$4,776 of the expenses were accrued, and the remaining expenses were paid. 47. Insurance Need: . A. True. B. Stephanie is the wage earner in a "typical family" with $40,000 gross annual income. Allison is a "nonworking" spouse who devotes all of her time to household activities. A. U ^s1xRpbD#rYNrJC.aeD=U]Sik@X6G[:b4(uH%-+0A?t>vT9. D. Limited payment. Catherine Carey has made the choice to stay home, and raise her three kids while her husband works. Which of the following life insurance policies should she apply for? This method is called the non-working spouse method. \quad\text{Deposits held in custody for others}&&\text{700}\\ Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits, 63. The "Nonworking" spouse method of estimating life insurance includes factors such as Social Security and liquid 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 . Your spouses cover must be useful to pay for childcare expenses and all the help you need around the house. 27. Whole life. The cash value of the policy is expected to be 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. Your premium will not increase when you renew it. D. An annuity is more advisable for people in poor health than for those who are likely to live longer than average. I feel like its a lifeline. 81. This term life policy will guarantee that you will pay the same premium for the duration of your policy. loans. Collection of advance premium shall be allowed within the same financial year for the premium due in that financial year However, where the premium due in a financial year is being collected in previous financial year, the premium may be collected for a maximum period of three months in advance of the due date of the premium. 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. What are the stages of the General Adaptation Syndrome (GAS)? $13,000 B. 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. succeed. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. 48. Use Which of the following is NOT important when buying life insurance? Jumping the Wealth Curve with Edward E. Bao Jr. 38. 5 days. Frank, age 38, was hit by a car and died. Using the nonworking spouse method, what should be the life E. Convince you to buy the policy that will pay her the highest commission. An individual can take out a loan on his or her term policy. Or, you can call us at (800) 797-1000. There are many situations to consider, and the methods you just heard about may or may not fit your needs. 59. 51,84,468 which includes Guaranteed Sum Assured on Maturity, accrued Guaranteed Yearly Additions and Guaranteed Loyalty Addition. Easy method B. Dual income, no kids method C. Formal calculation method D. Nonworking spouse method E. Family need method, 31. Judy and James have a 4-year-old child. A. Best Investment Options in India The question is, how big are yours? Read this lesson to learn what methods you can use to calculate your requirements. If you have a multiyear level term policy, A. Group life C. Limited life D. Universal life E. Variable life, 51. Agency Problem in Finance Overview, Duties & Examples | What is the Agency Problem? Which of the following statements is correct? What is Life Insurance? Income replacement is one of the main reasons many people, especially those who have loved ones depending on them financially, have life insurance. Francisco and Maria have three children and want to complete a detailed worksheet to determine the amount of life insurance they need to purchase. 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. \quad\text{Unearned revenue}&&\text{900}\\ 5% B. What is the amount of life insurance they should carry using the easy method? - 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? 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. This website helped me pass! D. Life income option. 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. This last method is called the family need method. age 35 may expect to live. A. A. Adjustable life B. When assessing a client with partial-thickness burns over 60% of the body, which finding should the nurse report immediately? Pam just started working at XYZ Widget Company and finally wants to get insurance coverage. Also, if you try to make up some of that yourself, you lose income and income potential. Your annual income is $100,000.

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