the nonworking spouse method of estimating life insurance

It will take your youngest child 15 more years to reach 18. 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. Which of the following statements is correct? 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. 1.5 lacs under Income Tax Act, 1961 and tax benefit may vary from assessee to assessee. The premium so collected in advance shall only be adjusted on the due date of the premium. Certificates of deposit. They plan to purchase life insurance using this formula: (18 - Youngest child's age) $10,000. $140,000 B. Find the CpC_pCp and CpkC_{pk}Cpk capability indexes if. participating policy (dividends will be used to build up the cash value of the policy). 60. D. The policy features. You must pay interest on any loans. Your spouse expects to continue to work after your death. 1. Student services 37,700 Its like a teacher waved a magic wand and did the work for me. She has since died. \end{array} When calculating an amount, ask yourself what it will cost to hire someone to replace your spouse and perform all the tasks your non-working spouse does throughout the day. 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. It is important to replace all of the income lost when an employed family member dies when using the human-life approach. You have no other debt. Of course, it would be a tragedy were something to happen to your spouse. The last thing to realize is that calculating your life insurance needs can be tricky. What kind of policy is he planning to purchase? \text{Pledges receivable (net of doubtful accounts of \$280)}&&\text{5,872}\\ Donald and Charlene are married and do not have any children. The settlement option in which the company acts as trustee and pays interest to the beneficiary is called A. Lump-sum payment. \text{Cash and cash equivalents}&&\text{\$\hspace{18pt}734}\\ Note: The categorization of Spouse into Working and Non-Working will be as per the Companys Board Approved Underwriting Policy (BAUP). C. Your premium will not increase because your policy is renewable. e. a place in which to keep products until they are needed E. None of these is correct. 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. In most cases in India, the non-working spouse is a woman and it may be unimaginable to account for the financial implications in case of their absence, keep aside the emotional damage. 79. In this case, the only type of life insurance policy you can buy is a guaranteed issue policy. Expert Answer 100% (1 rating) Step 1 Non-working spouse method: This method is form of insurance coverage that allows you to s View the full answer Previous question Next question Which of the following provisions prevents the life insurance company from refusing to pay his beneficiaries because of his original misrepresentation? Please consult your independent tax advisor for details. Accidental death benefit C. Guaranteed insurability option D. Cost-of-living protection E. Accelerated benefits, 62. The maturity benefit is Rs. E. Made all annuities tax free. Contract. Insurance Need: ? Term insurance B. Fred bought life insurance when he was 47, although he told the insurance company that he was 42. Anita is a "nonworking" spouse who devotes all of her time to household activities. What kind of policy would she want to purchase? A. A term insurance plan will also help to save taxes on the premiums under Section 80C of the IT Act. Secondly, consider the value of the unpaid work done by a spouse who spends much of their time raising children. Let's review. 36. This is a method that has you adding half of all your debts plus funeral expenses. C. Final life payment. 69. TERMS OF SERVICE A. copyright 2003-2023 Study.com. Buying from a financially strong company B. C. 10 days. D. Limited payment. The sooner a person is likely to die, the lower the premiums he or she will pay. Which of the following is NOT a type of permanent insurance? One such cover by Canara HSBC Life Insurance Company is the iSelect Smart360 Term Plan. You and your spouse have the following debts: Using the nonworking spouse method, what should be the life insurance needs for a A. How to estimate life insurance requirements for a non working spouse? A. B. You estimate that funeral expenses will be $5,000. D. Your premium will not increase when you renew it. A. Waiver of premium disability benefit B. 97. If you have a renewable term policy, A. Fixed Annuities are long-term insurance products. Diffusion Let us complete them for you. the near future. Life insurance companies understand that taking care of the home is invaluable and is equally important as earning an income for the household. D. A benefit during the period it covers, such as 1, 5, 10, or 20 years. Fell free get in touch with us via phone or send us a message. 2.Guaranteed Benefits - Provided all premiums have been paid as and when due and the policy is in-force. Income replacement is one of the main reasons many people, especially those who have loved ones depending on them financially, have life insurance. D. A fixed annuity is one where the investments made into the annuity are variable. 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. 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. This is a very common type of policy taken by homeowners who want to support their children financially. 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. 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. NOT FDIC INSURED. Your annual income is $100,000. Whole life. I would definitely recommend Study.com to my colleagues. a) A client with amyotrophic lateral sclerosis (ALS) tells the nurse, "Sometimes I feel so frustrated. 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. Read this lesson to learn what methods you can use to calculate your requirements. $12,000 B. the income provider's salary. Life insurance companies issue a lot of paperwork. You own a home with a mortgage of $110,000, and E. Proceeds left with the company. Using the DINK method, what should be your need for life insurance? refunds of$11,200 were given. Fred bought life insurance five years ago. This is a method that has you multiplying the number of years it takes the youngest child to reach 18 by $10,000. What impact do they have on your wealth potential. How long is the grace period for health insurance policies with monthly due premiums? It equals the cost of replacing the property. This is a method that has you adding half of all your debts plus funeral expenses. Dividend policy B. Nonparticipating policy C. Mutual policy D. Participating policy E. Stock policy, 34. C. The policy will return all premiums if you survive to the end of the policy. Which of the following households most likely has the greatest need for life insurance? In order to have a valid policy, the owner must: To clearly illustrate your insurable interest. He forgot to tell them that he had a heart condition, and, as a result of that condition, he recently died. ^Individual death claims settled and reported in public disclosures for FY 2021-22. NOT BANK GUARANTEED. The second is the DINK method. 3 days. Estimate how much life insurance Tim and Allison should carry. E. Weiss Research. A. Estimate your total Suppose you are 45 and have a $50,000 face amount, 15-year, limited-payment, Types of Life Insurance The most common settlement option for a life insurance program is the lump-sum payment. Sum Assured as chosen by the Working Spouse under the Plan. Group life C. Limited life D. Universal life E. Variable life, 52. Estimate how much life insurance Tim and Allison should carry to cover Allison. Frank, age 38, was hit by a car and died. Whole Life Insurance A. C. Ordinary life. Can you buy life insurance for someone who is dying? 96. Using Exhibit 12-1, determine the average numbers of additional years males alive at Which of the following riders should she consider? C. It is more expensive than term insurance. insurance needs for a family whose youngest child is 5 years E. Whole life insurance plans. With comprehensive coverage features like accidental benefit, increasing/ decreasing cover and whole life cover, the policy also offers a Spouse cover. A. Waiver of premium disability benefit B. Allison is a "nonworking" spouse who devotes all of her time to household activities. A. 37. Quickly and professionally. Jumping the Wealth Curve with Edward E. Bao Jr. D. A deferred annuity allows an individual to receive payments from a life insurance policy at some future date. Multiply the number of years until the youngest child reaches 18 by $10,000. Annuity Formula, Calculation & Examples | What is an Annuity? DINK stands for double income, no kids. 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. \textbf{Liabilities and Net Assets}\\ A. 101. D. An annuity is more advisable for people in poor health than for those who are likely to live longer than average. Of course, it would be a tragedy were something to happen to your spouse. A deferred annuity allows an individual to receive payments from an annuity at some future date. A. Dividend policy B. Nonparticipating policy C. Mutual policy D. Participating policy E. Stock policy, 33. 80. Wendy has had a life insurance policy for five years. A. This is also the most thorough method. You pay premiums each year for the rest of your life. B. When assessing a client with partial-thickness burns over 60% of the body, which finding should the nurse report immediately? You'll get a detailed solution from a subject matter expert that helps you learn core concepts. E. None of these is correct. C. Final life payment. 40. This communication strictly intended for individuals residing in the states of CA, CO, CT, DC, DE, FL, GA, IL, LA, MA, ME, NC, NH, NJ, NM, NY, OH, PA, RI, SC, TX, UT, VA. No offers may be made or accepted from any resident outside these states due to various regulations and registration requirements regarding investment products and services. B. If the policy exists, you can ask if you're a beneficiary. 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. A. d. 28. \qquad\text{Total net assets}&&\underline{\text{\hspace{5pt}333,940}}\\ True The "Family Need" method of estimating life insurance includes factors such as Social Security and liquid assets False Mutual life insurance companies specialize in the sale of nonparticipating policies False 73. You have a spouse, two kids, a dog and a mortgage - a typical family. 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. 48. See Answer B. A. Incontestability clause B. Misstatement of age provision C. Naming a beneficiary D. Policy reinstatement E. The grace period. 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. The premium shall be adjusted on the due date even if it has been received in advance. 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? Further, making sure that your non-working or part-time working spouse has the maximum amount of coverage based upon your coverage is a fundamental of good planning. Further, you estimate that your funeral will cost $6,000. Whole life B. Renewable term C. Convertible term D. Decreasing term E. Multiyear level. \qquad\text{Total liabilities}&&\text{127,730}\\[3pt] A. $50,000 C. $80,000 D. $100,000 E. $180,000 B. Now, you take this number and subtract your available assets from this number. Which of the following is a poor choice for the amount of protection offered for an individual? More thorough because it also considers employer provided insurance, Social Security benefits, and liquid assets. Jeanne wants to purchase a life insurance policy with guaranteed premiums. 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. $13,000 B. old? You are a dual-income, no-kids family. Your annual income is $60,000. Which method are they using to determine their life insurance needs? Suppose that yours is a typical family. E. Independently wealthy adult. Amy bought a life insurance policy and named Ben as her beneficiary. 76. succeed. Academic support 23,300 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. Nonworking spouse method is a type of insurance policy where without working you can support your children until they turn 18 years old. Using Exhibit 12-1, determine the life expectancy of a 40-year-old male. Sum Assured fixed at Rs. 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. Beneficiary. \text{Tuition and fees receivable (net of doubtful accounts of \$12)}&&\text{230}\\ D. Insurer. Tim and Allison are married and have two children, ages 3 and 6. GST On Life Insurance D. 30 days. This method has you multiplying your annual gross income by 70% and then multiplying that by 7. What are the stages of the General Adaptation Syndrome (GAS)? Which of the following is the process of getting oxygen from the environment to the tissues of the body? Yes! \quad\text{Unearned revenue}&&\text{900}\\ Which of the following riders would allow her to receive cash now? \quad\text{Accounts payable and accrued liabilities}&&\text{\$\hspace{5pt}21,130}\\ The return on its investments. T&C apply. The cash value of the policy is expected to be She, wants to determine her insurance needs. The DINK method has you adding half of all your debts to your funeral expenses. Sell you the highest level of coverage available. A. Incontestability clause B. Misstatement of age provision C. Naming a beneficiary D. Policy reinstatement E. The grace period, 57. B. The "Nonworking" spouse method of estimating life insurance includes factors such as Social Security and liquid assets. Insurance Need: . Stephanie is the wage earner in a "typical family" with $40,000 gross annual income. old? Multiply the income . Limited installment payment. Preserved the tax advantage of annuities but curtailed deductions for IRAs. B. 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. The rule of 70 is a means of estimating the number of years it takes for an investment or your money to double. 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. Which method are they using to determine their life insurance needs? You have a gross annual income of $62,000. PERSONAL FINANCE TIPS DELIVERED DIRECTLY IN YOUR INBOX, By submitting your name and email you are allowing us to store your personal data and send you emails.

the nonworking spouse method of estimating life insurance 2023