in12 - Chapter 12: Life Insurance Planning Objectives...

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Chapter 12: Life Insurance Planning
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Objectives Identify the purpose of life insurance and the reasons for buying it. Recognize that the need for life insurance varies over the course of one’s life and identify the procedures used to calculate life insurance needs.
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Objectives Distinguish among the various types of term and cash-value life insurance policies. Describe and explain the purpose of the major provisions of life insurance policies. Discuss important points to consider when choosing and buying life insurance.
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What is the Purpose of Life Insurance? To protect people who depend on you from financial loss related to your death 78% of all American households have it To make charitable bequests upon your death To save money for retirement or children’s education To leave as part of your estate To pay off a mortgage or other debts at the time of death
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The Principle of Life Insurance Mortality tables provide odds on your dying, based on your age and sex Your premium is based on the projections for the payouts for persons who die
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Determining Your Life Insurance Needs - Ask Yourself. .. Do you need life insurance? do you have people you need to protect financially? does your partner work? What are your objectives for life insurance? to accumulate money for retirement? to provide funds when you die? how much can you afford?
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Estimating the Amount of Life Insurance You Need The Easy Method typically, you will need to have enough insurance to cover 70% of your income for seven years The DINK (dual income, no kids) Method The “Nonworking” Spouse Method
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This note was uploaded on 02/11/2011 for the course FIN 3403 taught by Professor Tapley during the Spring '06 term at University of Florida.

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in12 - Chapter 12: Life Insurance Planning Objectives...

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