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16 Cards in this Set
- Front
- Back
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Family Income need should be divided into the following 3 income periods:
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1. Famlily Dependency Period - income needs will be greatest during this period because still have young children
Pre-retirement Period - surviving spouse is not eligible for SS benefits Retirement Period - SS benfits are in effect |
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Black out period
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time between the youngest child turns 16 and when the surviving spouse turns 60
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2 methods to determine need for life insurance
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1. Human Value Approach
2. Needs Analysis Approach |
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Human Value Approach
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a rational method looking at monetary value of an individuals future earnings up to retirement
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Needs Approach
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more widely used method, concerned with the precise amount of money needed to pay the mortgage, clothes, groceries, etc
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Steps used for Needs Approack:
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1. gather info
2. est. objectives 3. analyze info 4. develop plan 5. implement plan 6. monitor/review periodically |
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intervivos trust
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revocable trust created while the ED is still alive, to hold property for the benefit of another ALSO CALLED A LIVING TRUST
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Testamentary trust
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trust created within a will -- does not take affect until death of grantor
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intestate
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when a perosn dies without leaving a will -- overseen by a probate court
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Primary uses of life insurance:
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final expenses
housing fund education fund monthly income retirement income |
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Living benefits of life insurance include:
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loan from cash values
retirement income from cash cash value withdrawals dividends paid in cash accelerated death benefits life settelments |
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3 types of business
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1. sole proprietor
2. partnership 3. corporation |
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buy sell agreement
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legal contract that requires one party to sell and another party to buy a certain ownership interest in a business in the event of the oweners death
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cross purchase buy sell agreement
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legal agreement between existing owners of a business that requires the surviving ower to purchase the deceased owners interest indirectly from his/her heirs
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entity purchase buy sell agreement
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owner agrees to sell his/her interest in the business back to the business upon death
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stock purchase plan
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each stockholder agrees to purchase a proportion of share of the deceased stockholders atock at a predetermined price
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