Question
Alice is 40 years old and earns $35,000 annually. She earns half of the family's income. Use the multiple-of-earnings approach to determine the amount of
Alice is 40 years old and earns $35,000 annually. She earns half of the family's income. Use the
multiple-of-earnings approach to determine the amount of life insurance needed. Assume the
investment return on the insurance payout is 10%. How much insurance would you recommend
Alice have? Why? (Show all work.)
What role does life insurance play in the financial planning process?
Why is it important to have enough life insurance?
Explain the purpose of underwriting with regard to life insurance?
What are some factors that underwriters consider when evaluating a life insurance application?
Explain the circumstances under which a single college graduate would or would not need life
insurance.
Name and explain the most common financial resources needed after the death of a family
breadwinner.
What is term life insurance?
Describe the two most common types of term life insurance policies.
Explain how group life insurance differs from standard term life insurance. What do employees
stand to gain from group life?
What is a beneficiary?
What is a contingent beneficiary?
Explain why it's essential to designate a beneficiary for your policy.
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