CPCU 553 - chapter 9 Exam Questions with 100% Correct | Verified & Updated

CPCU 553 - chapter 9 Exam Questions with 100% Correct | Verified & Updated Describe the costs (6) associated with premature death. - Answer ️️ -1. Lost income 2. Final costs (funeral costs, medical expenses...) 3. Outstanding debts (credit cards, mortage,..) 4. Unpaid long-term obligations (retirement savings, child-care, college tuitions fund, etc) 5. Estate planning costs (Estate tax, probate cost) 6. Unfulfilled family obligations (standard of living) Describe the financial impact of the premature death of either spouse in a two-income family with children. - Answer ️️ -The loss of one spouse's earnings can affect the surviving spouse's ability to properly maintain the household, provide for related expenses, fund future retirement, and ensure the financial well-being of the children beyond any governmental benefits they may receive. Describe a "sandwiched" family. - Answer ️️ -Include baby-boomers, now middle-age, who are providing financial support to both younger and older family members. Describe a traditional family. - Answer ️️ -They consist of a mother, a father, and their children. One parent is employed, while the other partner manages the household and takes care of the dependent children. Describe the needs approach to determining the appropriate amount of life insurance. - Answer ️️ -It determines the total financial requirements of the insured's surviving dependent family. From that amount, assets such as any existing life insurance benefits, governmental benefits, or other available liquid assets are applied against the family's total financial requirements, generating the amount of life insurance or additional life insurance the individual should own. List the different categories (6) needs and benefits/assets would fall into. - Answer ️️ -1. Final expenses needs 2. Debt elimination needs 3. Family living expense needs 4. Special needs 5. Retirement income needs 6. Life insurance and other assets Describe the human life approach to determining the appropriate amount of life insurance. - Answer ️️ -It estimates an individual's income for his or her remaining working life and factors in other items, such as the individual's age in relation to retirement and the cost of self- maintenance. The surplus amount is the remaining wages that go to the family to meet its needs. This surplus is the human life value, which would r