the nonworking spouse method of estimating life insurance

81. 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). \textbf{June 30, 2019}\\ B. You have no other debt. 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} 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. 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. One such cover by Canara HSBC Life Insurance Company is the iSelect Smart360 Term Plan. B. Using the DINK method, what should be your need for life insurance? 700 cartons to be stored. In this case, 18 years. Which of the following riders provided an additional benefit for his heirs? He forgot to tell them that he had a heart condition, and, as a result of that condition, he recently died. 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. One of the most common questions we hear is, Can my non-working spouse qualify for life insurance? The answer is yes! DESIGNED BY: INTERSOFT ASSOCIATES. Types of Life Insurance Which method are they using to determine their life insurance needs? When using the rule of 70, the number 70 is used in the calculation. The process standard deviaton It accumulates cash value. What is the cost of living in California? If the policy exists, you can ask if you're a beneficiary. \qquad\text{Total net assets}&&\underline{\text{\hspace{5pt}333,940}}\\ Fell free get in touch with us via phone or send us a message. C. Your premium will not increase because your policy is renewable. Donald and Charlene are married and do not have any children. Home Flashcards Chapter 10 Personal Finance. A. Waiver of premium disability benefit B. A process has specification limits of LSL 5 540 and USL 5 550. You and your spouse have the following debts: Using the nonworking spouse method, what should be the life insurance needs for a 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. False. 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. Insurance Need: . A. An individual can take out a loan on his or her term policy. For example, say. Life Insurance Which statement is correct regarding mutual life. You have to drive them to their after-school activities, preparing meals, keeping the household in order, etc. Use Exhibit 1-B. 25. B. A deferred annuity allows an individual to receive payments from a life insurance policy immediately. D. Fund expense. A. Suppose that yours is a typical family. 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. Life Insurance Underwriting How do I know if my life insurance has cash value? 5. The average cost of life insurance is $27 a month. d. 28. Which of the following riders should he consider? $10,000 + ($30,000 / 2) + ($11,000 / 2) + ($5,000 / 2) = $10,000 + $15,000 + $5,500 + $2,500 = $33,000. Investment earnings received for the period were $3,960, of which$2,070 was donor restricted for scholarships. E. A policy whose coverage stops after a period of time. Jeff and Erica have two children. Purchasing a life insurance policy is a basic and inexpensive task. \text{Liabilities:}\\ \text{Prepaid assets}&&\text{1,364}\\ Income replacement is one of the main reasons many people, especially those who have loved ones depending on them financially, have life insurance. insurance needs for a family whose youngest child is 5 years C. It is better to fund a variable annuity before fully funding your IRA, Keogh, or 401(k). Your annual income is $60,000. 27. 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. Holding Period Return (HPR) Formula & Examples | What is HPR? 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. The ending balance in Accounts Payable and Accrued Liabilities was$1,935. $30,000 B. 200 lessons. 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. This is a method that has you multiplying your annual gross income by 70% and then multiplying that by 7. The recommendation is to have seven to ten years of life insurance. Is equipment floater the same as inland marine? A. Incontestability clause B. Misstatement of age provision C. Naming a beneficiary D. Policy reinstatement E. The grace period, 55. $50,000 C. $80,000 D. $100,000 E. $180,000 B. What method. Another name for temporary life insurance is A. Student services 37,700 But life insurance rates can vary dramatically among applicants, insurers and policy types. C. You can convert your term policy to a permanent policy. This method has you multiplying your annual gross income by 70% and then multiplying that by 7. You may not purchase insurance once your term ends. You can get your paper edited to read like this. Allowed whole life insurance policies to be sold. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. A. Most participating policies are sold by: 102. Under this method, the original principal that you save will still remain at the end of the income period. Academic support 23,300 A. Renewable term B. Multiyear level term C. Decreasing term D. Limited payment E. Single year term. e. a place in which to keep products until they are needed C. Administrative fee. A. Adjustable life B. Pay off a mortgage. All other trademarks and copyrights are the property of their respective owners. Having life insurance for income replacement means if you pass away, your family could have the financial support they need to maintain the lifestyle they're used to. 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. In this case, the only type of life insurance policy you can buy is a guaranteed issue policy. Can non-working spouses qualify for a life insurance? Group life C. Limited life D. Universal life E. Variable life, 51. 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 helped me pass my exam and the test questions are very similar to the practice quizzes on Study.com. succeed. Allison is a "nonworking" spouse who devotes all of her time to household activities. 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. False. A. 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. Tim and Allison are married and have two children, ages 3 and 6. 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The "Family Need" Method. \end{array} Which of the following riders should he consider? 66. E. Made all annuities tax free. 2.Guaranteed Benefits - Provided all premiums have been paid as and when due and the policy is in-force. Call the State Commissioner's Office for your State. Stephanie is the wage earner in a "typical family" with $40,000 gross annual income. Straight life C. Ordinary life D. Term life E. Cash value life. Time Value of Money Formula & Examples | What is Time Value of Money? Which of the following provisions prevents the life insurance company from refusing to pay his beneficiaries because of his original misrepresentation? 39. Which of the following is NOT a feature of whole life insurance? Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits, 63. 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. Which of the following riders should she consider? Earnings Per Share Overview & Formula | How to Calculate EPS, Capital Budgeting Decisions | Examples, Techniques & Analysis, Activity-Based Costing | Formula, Examples & Benefits. \quad\text{Without donor restrictions}&\text{\$\hspace{1pt}104,000}\\ How to estimate life insurance requirements for a non working spouse? She does not want to take a medical exam to get coverage because she has some underlying health conditions and is concerned that she might not qualify for a policy. This gives you seven years of wages at 70%. Estimate your total $4,000. Yes! With comprehensive coverage features like accidental benefit, increasing/ decreasing cover and whole life cover, the policy also offers a Spouse cover. Mortgage = $190,000; Auto loan = $10,000; Credit card balance = $2,000; and other debts = Note: The categorization of Spouse into Working and Non-Working will be as per the Companys Board Approved Underwriting Policy (BAUP). 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. We are living in times of uncertainty. Pam just started working at XYZ Widget Company and finally wants to get insurance coverage. You own a home with a mortgage of $110,000, and Dividend policy B. Nonparticipating policy C. Mutual policy D. Participating policy E. Stock policy. Enrolling in a course lets you earn progress by passing quizzes and exams. 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. Term insurance C. Whole life insurance D. Variable annuity E. 401(k). Catherine Carey has made the choice to stay home, and raise her three kids while her husband works. Investors in the Scheme are not being offered any guaranteed / assured returns. Your premium will not increase when you renew it. 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. 46. 93. If you want to purchase term insurance, you will receive all of the following except A. D. Household with children. I would definitely recommend Study.com to my colleagues. 'QP2?^03dw 6x ;!;RTkz}Sc;)iI 25% C. 50% D. 75% E. 95%, 32. Jeff Willis has five kids and more debt than the, average family. You pay premiums each year for the rest of your life. 51,84,468 which includes Guaranteed Sum Assured on Maturity, accrued Guaranteed Yearly Additions and Guaranteed Loyalty Addition. Read this lesson to learn what methods you can use to calculate your requirements. 79. The premium so collected in advance shall only be adjusted on the due date of the premium. 47. participating policy (dividends will be used to build up the cash value of the policy). Not necessarily. 42. They have determined that their annual income is $70,000 and their net worth is now $150,000. Annuity Formula, Calculation & Examples | What is an Annuity? I feel like its a lifeline. 71. Further, you estimate that your funeral will cost $6,000. A. They have determined that their annual income is $70,000 and their net worth is now $150,000. They plan to purchase life insurance using this formula: (18 - Youngest child's age) $10,000. Which of the following is NOT a type of permanent insurance? Fred bought life insurance five years ago. A. $196,000 C. $280,000 D. $400,000 E. $430,000, 83. If one should die, they think that funeral expenses would be $12,000. Get unlimited access to over 88,000 lessons. Life insurance benefits may be used to pay off a home mortgage or other debts at the time of death. 68. Ask a Family Member's Financial Advisor. $140,000 B. 65. Yes. . 78. Each of you Using the "nonworking" spouse method, what should, be the life insurance needs for a family whose youngest, 94. 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. More thorough because it also considers employer provided insurance, Social Security benefits, and liquid assets. A. Waiver of premium disability benefit B. Deferred annuity C. Whole life insurance D. Immediate annuity E. Universal life insurance. 70. An immediate annuity allows an individual to receive payments from an annuity beginning at once. Surrender charge. Anita is a "nonworking" spouse who devotes all of her time to household activities. True. Now, you take this number and subtract your available assets from this number. D. Term. What is their total insurance need using the DINK method? C. Tell you why her product is better than the competitors. 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. C. The mortality rate it expects among its policy holders. B. 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. D. Help you select the proper kind of protection within your financial boundaries. A deferred annuity allows an individual to receive payments from an annuity immediately. Which of the following policies should she buy? It equals the cost of replacing the property. D. Limited payment. What impact do they have on your wealth potential. Allison is a "nonworking" spouse who devotes all of her time to household activities. C. Final life payment. Using the sample chart that follows, find the column showing the age of the nonworking spouse 2. This method is called the non-working spouse method. Which of the following is NOT a type of permanent life insurance? This last method is called the family need method. 97. Allison is a "nonworking" spouse who devotes all of her time to household activities. What happens if you don't pay your health insurance deductible? With an available asset of $500,000 in savings, your life insurance requirement is $1,355,000 - $500,000 = $855,000. If you have a renewable term policy, A. 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. Net deposits returned to students totaled $10. Firstly, spouses who work part-time or who do not work have insurability interest, which should be maximized. DINK stands for double income, no kids. The death benefit will be increased by the amount of an outstanding policy loan. 37. This is a very common type of policy taken by homeowners who want to support their children financially.

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