the nonworking spouse method of estimating 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. Holly and Matt want to use the "nonworking" spouse method to determine the amount of life insurance coverage they need. This method has you multiplying your annual gross income by 70% and then multiplying that by 7. Your spouse expects to continue to work after your death. Not necessarily. Life Insurance A. Adjustable life B. Home Flashcards Chapter 10 Personal Finance. refunds of$11,200 were given. It will have a lower coverage amount and a waiting period (usually 2 year). A. to work after your death. 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. I feel like its a lifeline. C. Your premium will be the same for the duration of your policy. to work after your death. NOT INSURED BY ANY STATE OR FEDERAL AGENCY. Please check your entries and try again. 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. Most participating policies are sold by: 102. Adult child living with parents. The DINK method has you adding half of all your debts to your funeral expenses. C. Her contingent beneficiaries. Canara HSBC Life Insurance Company Limited is only the name of the insurance company and Canara HSBC Life Insurance Invest 4G is only the name of the unit linked insurance contract and does not in any way indicate the quality of the contract, its future prospects or returns. They plan to purchase life insurance using this formula: (18 Youngest childs age) $10,000. T&C apply. Now, if it's just you and your spouse, you can use the DINK method. Preserved the tax advantage of annuities but curtailed deductions for IRAs. 38. A. Your premium may increase if you continue it for another term because you will be older. \textbf{(amounts in thousands)}\\ Both you and the spouse are covered throughout the policy term for your respective separate sums assured. The goal of this approach is to replace the primary breadwinner's salary for a predetermined number of years. Which of the following is NOT a feature of whole life insurance? Whole life. 2.Guaranteed Benefits - Provided all premiums have been paid as and when due and the policy is in-force. 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. D. Your policy will have the same premium as other term policies. Whole life B. Renewable term C. Convertible term D. Decreasing term E. Multiyear level. 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. Life insurance is a wise purchase of all individuals. Which statement is correct regarding mutual life. B. A. A young employee is buying individual life insurance and is worried about the impact inflation will have on his life insurance coverage. Further, you estimate that your funeral will cost $6,000. E. 60 days. The second is the DINK method. Allison is a "nonworking" spouse who devotes all of her time to household activities. Sum Assured as chosen by the Working Spouse under the Plan. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Can non-working spouses qualify for a life insurance? Your rates will vary based on your unique circumstances, just as they would if you were single. \quad\text{With donor restrictions}&\underline{\text{\hspace{5pt}229,940}}\\ Most people buy life insurance to A. Agency Problem in Finance Overview, Duties & Examples | What is the Agency Problem? Each of you About ___ of the U.S. life insurance companies are stock companies. D. You must pay interest on any outstanding policy loans. When can I switch from original Medicare to an Advantage plan? A. Using the "nonworking" spouse method, what should be the life insurance needs for a family whose youngest child is 5 years old? We look forward to speaking with you. The first is the easy method. method for him to use to calculate his insurance needs? Catherine Carey has made the choice to stay home, and raise her three kids while her husband works. 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. a) A client with amyotrophic lateral sclerosis (ALS) tells the nurse, "Sometimes I feel so frustrated. 70. Shaan and Anita are married and have two children, ages 4 and 7. Group life B. How long is the grace period for health insurance policies with monthly due premiums? 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 return on its investments. Which of the following life insurance policies should she apply for? To go deeper on the insights from Smallwood Wealth Management, request your FREE COPY of. 97. \textbf{Assets}\\ E. The policy requires that you pay a specified premium each year for the rest of your life. But from a financial perspective, it does not have to be a crisisif you have good planning. - Definition, History & Examples, Stealth Advertising: Definition & Examples, What is Crowdsourcing? 37. The rule of 70 and the rule of 72 give rough estimates of the number of years it would take for a certain variable to double. Earnings Per Share Overview & Formula | How to Calculate EPS, Capital Budgeting Decisions | Examples, Techniques & Analysis, Activity-Based Costing | Formula, Examples & Benefits. A. Amy has worked with students at all levels from those with special needs to those that are gifted. E. It is permanent life insurance. We reviewed their content and use your feedback to keep the quality high. Single adult living alone. This problem has been solved! Enrolling in a course lets you earn progress by passing quizzes and exams. Most modern insurance covers let you add your spouse under the same policy for an additional premium, often lower than your own premium. Anita is a "nonworking" spouse who devotes all of her time to household activities. You may not purchase insurance once your term ends. E. All of these affect the price. 40. 76. Course Hero is not sponsored or endorsed by any college or university. Tim and Allison are married and have two children, ages 4 and 7. What percentage of your income should you spend on life insurance? What kind of policy is he planning to purchase? Holding Period Return (HPR) Formula & Examples | What is HPR? Academic support 23,300 Pay off a mortgage. Using Exhibit 12-1, determine the life expectancy of a 40-year-old male. What will be the surrender value of LIC policy after 5 years? The provisions of Income Tax Act, 1961 are subject to amendments made by the government from time to time. \text{Net assets:}\\ You and your spouse are in good health and have reasonably secure jobs. This gives you seven years of wages at 70%. Which of the following is a poor choice for the amount of protection offered for an individual? In this episode, John continues his series on the. C. Identified annuities to be the same as certificates of deposit. You may need to change your coverage amounts when this happens. The insurer may tell you, or it may ask you to submit a form reporting the death. C. A life insurance policy allows the beneficiary to receive proceeds at some future date. Let us have a look at your work and suggest how to improve it! She may need to change her coverage as her needs change. 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. \qquad\text{Total net assets}&&\underline{\text{\hspace{5pt}333,940}}\\ \end{array} Which of the following riders should he consider? 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. $18,000 C. $50,000 D. $130,000 E. $180,000, 84. A. Waiver of premium disability benefit B. nonworking spouse whose youngest child is 5 years old? The last thing to realize is that calculating your life insurance needs can be tricky. Frank, age 38, was hit by a car and died. The recommendation is to have seven to ten years of life insurance. She was recently divorced. Which method are they using to determine their life insurance needs? For more details on risk factors, terms and conditions please read the Sales Brochure carefully before concluding a sale. The timing for payments of a variable annuity are variable. This method is used only to calculate child care needs, not the total financial needs of the family. 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. 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). What is Life Insurance? A. Easy method C. DINK method D. Family need E. Soccer mom 95. D. Life income option. E. None of these is correct. 80. Under the Multiple of Income method of estimating, life insurance needs, what important factor is excluded, 98. STEINERCOLLEGEStatementofFinancialPositionJune30,2019(amountsinthousands)\begin{array}{c} Group life C. Limited life D. Universal life E. Variable life, 49. A. Adjustable life B. 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. was specifically designed for someone in her situation? 5% B. A. Incontestability clause B. Misstatement of age provision C. Naming a beneficiary D. Policy reinstatement E. The grace period, 56. 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. The rule of 70 is a means of estimating the number of years it takes for an investment or your money to double. For a non-Working Spouse. \textbf{June 30, 2019}\\ False. $140,000 B. A. If the policy exists, you can ask if you're a beneficiary. The Policy will terminate after payment of this benefit. A. - 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? After payment was received, tuition 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. In many cases, the answer is yes. 45. \text{Investments (at fair value, cost of \$162,000)}&&\underline{\text{\hspace{5pt}158,400}}\\ A. Waiver of premium disability benefit B. Term insurance for non-working spouse in India will be of great help. E. No interest will accumulate for any loans related to life insurance. A. You pay premiums each year for the rest of your life. An error occurred trying to load this video. E. A policy whose coverage stops after a period of time. 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. You can get your paper edited to read like this. B. \quad\text{Deposits held in custody for others}&&\text{700}\\ Which method are they using to determine their life insurance needs? 25,00,000 which will remain same throughout the Policy Term. The premium so collected in advance shall only be adjusted on the due date of the premium. Term C. Credit life D. Endowment life E. Adjustable life, 53. What happens if you don't pay your health insurance deductible? Of the following, which one is the most positive feature of whole life insurance? Insurance Need: . Competition among companies with comparable policies can affect the price a company charges for life insurance. 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} A. And a term insurance cover for house makers, non-working spouses, or say a housewife, proves helpful exactly here, ensuring your family tides over the financial damages in case something unfortunate happens. Headquartered at 199 Broad Street, Red Bank NJ 07701-2056 succeed. $10,000 + ($30,000 / 2) + ($11,000 / 2) + ($5,000 / 2) = $10,000 + $15,000 + $5,500 + $2,500 = $33,000. 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. Group life C. Limited life D. Universal life E. Variable life, 52. Dividend policy B. Nonparticipating policy C. Mutual policy D. Participating policy E. Stock policy, 33. Secondly, consider the value of the unpaid work done by a spouse who spends much of their time raising children. Maximum amount that can be claimed as deduction for education loan, How to File ITR for Income under 2.5 Lakh, How to Reduce Tax Liability with Term Insurance, Know the Tax Benefit on Saving for Retirement, Need for a Life Insurance for the Non-Working Spouse, Making claim settlement easy for your beneficiaries, How has the occurrence of covid-19 affected insurance in INDIA, Factors That Affect Life Insurance Premiums, Reasons for Life Insurance Claim Rejection, Unclaimed Amount Movement To-senior Citizens Welfare Fund. Which method are they using to determine their life insurance needs? She, wants to determine her insurance needs. Group life C. Limited life D. Universal life E. Variable life, 51. Easy method B. Dual income, no kids method C. Formal calculation method D. Nonworking spouse method E. Family need method, 31. C. Administrative fee. 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. 51,84,468 which includes Guaranteed Sum Assured on Maturity, accrued Guaranteed Yearly Additions and Guaranteed Loyalty Addition. A. Waiver of premium disability benefit B. All of the following are major rating agencies for insurance except A. Variable life C. Universal life D. Adjustable life E. Decreasing term life. E. An immediate annuity allows an individual to receive payments from an annuity beginning at once. Prepare journal entries in good form to record the foregoing transactions for the year ended June 30, 2020. Using the "Nonworking" Spouse Method to Determine Life Insurance Needs. D. Decreasing term. What method would probably be the best. What is the most important part of an insurance agents job? Which of the following riders should he consider? You want to purchase a life insurance policy that pays a dividend. Yes! 3.The maturity benefit calculated for a 25 years old healthy male who has opted for Canara HSBC Life Insurance Guaranteed Savings Plan with Guaranteed Savings Option through insurers website, annual premium Rs. Sell you the highest level of coverage available. Catherine Carey has made the choice to stay home and raise her three kids while her husband works. I would definitely recommend Study.com to my colleagues. 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. The Wealth Curve Talk with John L. Smallwood. PK ! Life Insurance Underwriting Call the State Commissioner's Office for your State. Of course, it would be a tragedy were something to happen to your spouse. This is a very common type of policy taken by homeowners who want to support their children financially. If you have a multiyear level term policy, A. insurance needs for a family whose youngest child is 5 years 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. 82. 1. \textbf{Liabilities and Net Assets}\\ 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. 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. Table lamp. Do both you and your spouse need life insurance? B. E. An insurance company will calculate the annual amounts to pay each person for an annuity. 68. 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. 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. B. Dun & Bradstreet. Firstly, spouses who work part-time or who do not work have insurability interest, which should be maximized. E. Convince you to buy the policy that will pay her the highest commission. Student services 37,700 Nonworking spouse method is a type of insurance policy where without working you can support your children until they turn 18 years old. Life insurance policies, even joint policies, are rated based on your age, health conditions and coverage amount. Which of the following is NOT important when buying life insurance? After you purchase a life insurance contract, you have a "free look" period that lasts A. A. B. I highly recommend you use this site! DINK stands for double income, no kids. 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. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Here are the features of adding a Spouse Cover to your iSelect Smart360 Term Plan: Spouse Cover With the iSelect Smart360 Term Plan. In other words, if a person's death would cause you significant financial hardship, it's an insurable interest. An immediate annuity allows an individual to receive payments from an annuity beginning at once. Please consult your independent tax advisor for details. Each plans to continue to work after the other one dies. A. Incontestability clause B. Misstatement of age provision C. Naming a beneficiary D. Policy reinstatement E. The grace period, 55. 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? D. Insurer. One such cover by Canara HSBC Life Insurance Company is the iSelect Smart360 Term Plan. $86,000 C. $98,000 D. $172,000 E. $217,000. Mildred was diagnosed with terminal cancer and knows that she doesnt have long to live. Tim and Allison are married and have two children, ages 3 and 6. E. Proceeds left with the company. Endowment Plans A. Incontestability clause B. Misstatement of age provision C. Naming a beneficiary D. Policy reinstatement E. The grace period, 57. Using the sample chart that follows, find the column showing the age of the nonworking spouse 2. NOT FDIC INSURED. $343,000 C. $490,000 D. $700,000 E. $750,000, 86. Buying from a financially strong company B. See Answer It equals the cost of replacing the property. E. Weiss Research. Features of Life Insurance Important Life Insurance Policy Provisions, After-Tax Rate of Return: Definition & Formula, Standard Deviation of Returns | Overview, Investment Volatility & Formula. TERMS OF SERVICE \quad\qquad\text{Total liabilities and net assets}&&\underline{\underline{\text{\$\hspace{1pt}455,670}}}\\ B. Multiyear level term. Reasons for Life Insurance Claim Rejection, Head Office : 139 P Sector - 44,Gurugram - 122003Haryana, India, www.lifeinscouncil.org | IRDAI Registration no: 136. www.irdai.gov.in WEBNJV3CHODEC17 ENG | CIN: U66010DL2007PLC248825. Using the easy Estimate how much life insurance Tim and Allison should carry. For example, say you're the only one working in your family and your youngest child is three. A. Ben. 36. B. For example, your life insurance coverage amount will need to pay for funeral expenses, any outstanding debts, any remaining mortgage, and maybe even future financial support for a spouse or children. Answer . Your spouse expects to continue to work after your death. 5 days. Surrender charge. 26. C. It is more expensive than term insurance. 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. 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. The Rule of 72 is a calculation that estimates the number of years it takes to double your money at a specified rate of return. B. 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. Contract. 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. You can take out a life insurance policy on your spouse if you have an insurable interest. Suppose that yours is a typical family. E. Credit life. lessons in math, English, science, history, and more. Experts are tested by Chegg as specialists in their subject area. A. 41. Also, if you try to make up some of that yourself, you lose income and income potential. On occurrence of first death or diagnosis of terminal illness, to either of you, the sum assured on death corresponding to the affected life is paid and the policy continues with life cover for the other life with reduced premium. 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.