Chapter 11 RSM Exam | Questions with 100%
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Life insurance sold through savings banks
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1 Savings Bank Life Insurance (SBLI) 2 Premature death
3 Dependency period income 4 Reasons U.S. life expectancy lags
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Terms in this set (70)
Premature death Death of a family head with outstanding financial
obligations, causing loss of income, added
expenses, and financial hardship for dependents
, Economic impact of premature death Loss of future earnings, funeral/estate costs,
reduced standard of living, and financial instability
for surviving family
Noneconomic costs of premature Emotional suffering such as grief experienced by
death surviving family members
Why premature death is less severe Increased life expectancy has reduced the overall
today economic impact
Reasons U.S. life expectancy lags Obesity and sedentary lifestyle
When life insurance is financially When the insured has earned income and
justified dependents rely on that income
Life insurance needs by family type Vary based on structure (single, single-parent,
dual-income, traditional, blended, sandwiched
families)
Human life value approach Estimates life insurance need as the present value
of future earnings lost due to premature death
Steps in human life value approach Estimate earnings → subtract taxes and expenses
→ discount future income to present value
Needs approach Determines life insurance need based on financial
obligations that must be met after death
Estate clearance fund Funds needed for funeral costs, debts, and estate
settlement
Readjustment period income Income needed for 1-2 years after death for family
adjustment
Correct Answers | Verified | Latest Update 2026
Save
Practice questions for this set
Learn 1 /7 Study using Learn
Life insurance sold through savings banks
Choose an answer
1 Savings Bank Life Insurance (SBLI) 2 Premature death
3 Dependency period income 4 Reasons U.S. life expectancy lags
Don't know?
Terms in this set (70)
Premature death Death of a family head with outstanding financial
obligations, causing loss of income, added
expenses, and financial hardship for dependents
, Economic impact of premature death Loss of future earnings, funeral/estate costs,
reduced standard of living, and financial instability
for surviving family
Noneconomic costs of premature Emotional suffering such as grief experienced by
death surviving family members
Why premature death is less severe Increased life expectancy has reduced the overall
today economic impact
Reasons U.S. life expectancy lags Obesity and sedentary lifestyle
When life insurance is financially When the insured has earned income and
justified dependents rely on that income
Life insurance needs by family type Vary based on structure (single, single-parent,
dual-income, traditional, blended, sandwiched
families)
Human life value approach Estimates life insurance need as the present value
of future earnings lost due to premature death
Steps in human life value approach Estimate earnings → subtract taxes and expenses
→ discount future income to present value
Needs approach Determines life insurance need based on financial
obligations that must be met after death
Estate clearance fund Funds needed for funeral costs, debts, and estate
settlement
Readjustment period income Income needed for 1-2 years after death for family
adjustment
