Insurance

Question 1

5 steps for Life Insurance needs Analysis

Answer 1

1 Determine cash needs at death

2 Determine ongoing income needs (annual after tax income minus ongoing spouse income)

3 Calculate capital needed to provide this level of income

4 Total of all assets available

5 Calculate the additional life insurance needed

Question 2

What are non forfeiture options?

Answer 2

options if the policyholder discontinues premium payments. Includes: take the cash value in cash, apply the cash value to purchase “reduced paid up insurance” or “extended insurance” or use the cash value as security for a loan against the policy to pay the premium or premiums due “automatic premium loan”

Question 3

How long is the grace period?

Answer 3

30 days - period of time after the due date of a premium payment during which the policy remains in force without penalty or the policy will be “lapsed”.

Question 4

What is a policy gain?

Answer 4

taxable amount=proceeds of disposition-ACB

Question 5

How to calculate ACB

Answer 5

(premiums-NCPI)-dividends-loans

Question 6

How to calculate ACB

Answer 6

premiums + interest-dividends-NCPI

Question 7

Health & dental insurance

Answer 7

Benefits are not taxable to employee

Employer paid premiums deductible for the employer

Question 8

Private disability plan

Answer 8

Individuals cannot deduct disability insurance premiums