11 - Uses of Life Insurance
When calculating the amount of life insurance needed for an income earner, what has to be determined when using the Needs Approach?
The family's financial objectives if the income earner were to die or become disabled
Which of these factors is NOT taken into account when determining an applicant's life insurance needs?
automobile
Key person insurance is intended to
cover business losses due to the death of a key employee
All of these are common personal uses of life insurance EXCEPT
Fund a Buy-Sell agreement
Which of these is a method of determining the level of funds required for ongoing support in the event of the breadwinner's death?
Human life value
Which approach predicts a person's earning potential and determines how much of that amount would be devoted to dependents?
Human life value approach
The Human Life Value concept is based on
Income
Which of the following pieces of information is NOT gathered during the personal financial planning process?
An individual's civic organization memberships
Bob and Tom are partners in a business. If one of them were to die, which of the following would guarantee a market for each of their share of the business?
Buy-Sell agreement
All of the following are examples of a Business Continuation Plan EXCEPT
Deferred Compensation
Buy-sell agreements are typically funded by which two insurance products?
Life insurance and disability insurance
"Life insurance creates an immediate estate". This phrase means:
when the insured dies, a death benefit is paid