We need to discuss a few things before finalizing your policy. First, the beneficiary clause. Who would you like to name as your ? beneficiary, that is, the person who will receive the entire death benefit?
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Following Tony's untimely death, the executor of his estate initiates the claim for his life insurance benefit and provides adequate evidence to the insurer that the claim is payable. However, the beneficiaries of the policy dispute one another's claim to the benefit and take the case to the courts. Which of the following CORRECTLY describes how the insurer may proceed? The insurance company may pay the benefits into court. b) The insurance company may pay the benefit within 60 days. c) The insurance company may deny the claim based on the beneficiary dispute. d) The insurance company may pay the benefit to the executor who will determine the rightful beneficiary.
Jennifer S.
A person who will follow your instructions specified in your will is called a(n): trustor. executor or executrix. witness. beneficiary.
Sanchit J.
Will, age thirty-three, and Erin, age thirty-one, are a newly married couple. Will is an assistant manager at a national electronics chain store and earns $24,000 a year. Erin is a web application developer earning $53,000 annually. They own a condominium valued at $285,000, which has an outstanding mortgage of $231,000. They have two vehicles and $34,000 in car loans, as well as combined outstanding college loans of $126,000. They also have $12,000 in credit card debt, arising mostly from their recent wedding and honeymoon expenses. Will’s employer does not offer any retirement savings plan or other benefits, and, because of his and Erin’s current debt, Will is unable to put any savings into a retirement account. Erin has been with the same employer for six years and has been contributing to a 401(k) for five years. Her employer does not provide any matching contributions for the employer-sponsored defined contribution plan. The current value of Erin’s 401(k) is $17,000, including investment returns. Erin’s employer provides group universal life (GUL) coverage for her in the amount of $50,000. The couple has no personal savings, and any excess money goes to paying down their outstanding debts. Will and Erin have been considering whether to purchase life insurance, although they are concerned about the costs. They have decided to consult with a local agent to learn more about life insurance products and what their current life insurance needs would be. The agent advises the couple that she will be using the needs approach to evaluate their current financial situation, economic needs, and available resources to meet expenses in the event of their premature death. The first step in this process is to determine the couple’s cash needs in the event of either Will’s or Erin’s premature death. Final Expense Needs Funeral costs: $8,000 Estate settlement: $5,000 Federal taxes: $0 State taxes: $0 Total final expenses: $13,000 Debt Elimination Needs Satisfy outstanding mortgage(s): $231,000 Eliminate outstanding credit card debt: $12,000 Eliminate college loans: $126,000 Eliminate outstanding car loans: $34,000 Total debt elimination needs: $403,000 Family’s Living Expenses Needs Household maintenance expenses: $82,000 Other living expenses: $125,000 Total living expenses needs: $207,000 Total Expense Needs: $623,000 Based on a review of the couple’s current financial situation, the agent determines total expense needs of $623,000. The agent further decides to include an emergency fund in the amount of $15,000 to cover any unanticipated expenses following the premature death of either Will or Erin. Although the couple is still relatively young and early in their working careers, the agent will also include an amount for future retirement income funding. The calculation for the amount of retirement income would be based on age, Erin’s employer-sponsored retirement plan, and available Social Security benefits at retirement age. In this case, the agent will use an amount of $250,000 each for Will and Erin. The only assets that the couple currently has available are Erin’s $50,000 GUL and her $17,000 retirement account, for which Will is listed as the beneficiary. Neither individual would receive survivor’s benefits from Social Security until they reach retirement age. Future life insurance reviews may reflect such benefits as the couple’s financial and family situation changes over time.
Sri K.
Recommended Textbooks
Horngren’s Cost Accounting
Cost Accounting A Managerial Emphasis
Principles of Accounting Volume 1: Financial Accounting
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