Life Insurance, BC Canada( HLLQP STUDY) questions with correct answers

3 phrases of Against Permanent Loss of income( Income earner dies) Answer Readjustment period, Dependency Period, Survivor life income needs Capital retention approach Answer Today's value of income needs + cash needs = insurance needs Two common method for calculate life insurance needs Answer Capitalization of income approach(life- value approach) and Capital retention approach Capitalization of income approach(life- value approach) Answer Annual Income / interest rate = life value (how much one's earning worth in today's value ). Ex, 30,000 / 0.05= 600,000 If I put 600,000 in a 5% investment, I have 30000 per year Types of Estate planning needs Answer Principal Resident,Cottage ,Investment( i)interest ii)Dividends iii) capital gain 3 factors that contribute to the coverage needed for Against Temporary Loss of Income Answer 1.Earned income (active income), 2.Other source of disability benefits, 3.Tax bracket. Note: the benefit payment amount is ""monthly"" ›Be care full when reading the question -Annual income or monthly income?