Life license CH 11

When calculating the amount of life insurance need 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 approach predicts a person's earning potential and determines how much of that amount would be devoted to dependents

Human life value approach

Buy-sell agreements are typically funded by who two insurance products?

Life insurance and disability insurance

The Human Life Value concept is based on

income

"Life insurance creates an immediate estate". This phrase means:

when the insure dies, a death benefit is paid.

Which of following pieces of information is NOT gathered during the personal financial planning process?

An individual's assets

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

Key person insurance is intended to

Cover business losses due to the death of a key employee

All of the following are examples of a Business Continuation Plan except

Deferred compensation

All of these are common personal uses of life insurance EXCEPT

Fund a Buy-Sell agreenment