Question #3: Insurance and Risk Management (10) Having proper life and disability insurance protection is a key 'hedge' against your biggest asset - your ability to earn income throughout your working lifetime. You are considering your own insurance protection now that you have a few working years under your belt, and you want to ensure that you "right size the amount of insurance you buy. 1) What two main elements on your economic balance sheet would you need to refer to when determining what your life insurance needs are? (2) a. b. 2) What one additional element on your balance sheet might reduce the amount of insurance that you need to purchase? (1) a. 3) When considering types of life insurance to purchase, what type of life insurance makes the most financial sense for someone in their 20's to consider and why (be specific on why)? (2) a. Type: b. Why: 4 FINE 40505 - Final Exam Winter 2022 4) What is the main health consideration that would have a pronounced negative effect on your life insurance premiums? (1) 5) 22% of Canadians aged 15 years and over has had one or more disabilities (Stats Canada, 2017). Consider the following (4): a. In your own words, describe the main financial risk that long term disability insurance covers (1): b. What are the three main sources of long-term disability insurance? (1.5): C. What are the various income tax consequences associated with long term disability income benefits? (1.5) Question #3: Insurance and Risk Management (10) Having proper life and disability insurance protection is a key 'hedge' against your biggest asset - your ability to earn income throughout your working lifetime. You are considering your own insurance protection now that you have a few working years under your belt, and you want to ensure that you "right size the amount of insurance you buy. 1) What two main elements on your economic balance sheet would you need to refer to when determining what your life insurance needs are? (2) a. b. 2) What one additional element on your balance sheet might reduce the amount of insurance that you need to purchase? (1) a. 3) When considering types of life insurance to purchase, what type of life insurance makes the most financial sense for someone in their 20's to consider and why (be specific on why)? (2) a. Type: b. Why: 4 FINE 40505 - Final Exam Winter 2022 4) What is the main health consideration that would have a pronounced negative effect on your life insurance premiums? (1) 5) 22% of Canadians aged 15 years and over has had one or more disabilities (Stats Canada, 2017). Consider the following (4): a. In your own words, describe the main financial risk that long term disability insurance covers (1): b. What are the three main sources of long-term disability insurance? (1.5): C. What are the various income tax consequences associated with long term disability income benefits? (1.5)
