Objective 1 : Premature Death Loss Exposure

Question 1

most life insurers statistically consider a premature death to be

Answer 1

any death that occurs before age sixty-five.

Question 2

Singles Without Children

Answer 2

• more than 2/3 of today’s middle-income taxpayers

-could be
an unmarried individual in his late 20-30
a divorced person,
a person over age 65 whose spouse has died.

-may not need life insurance to reduce the financial impact of the premature death loss exposure if no one financially depends on him. just a small amount of life insurance may be required to cover funeral expenses and any uninsured medical expenses

Question 3

Single-Parent Families

Answer 3

Frequently have little or no life insurance, relying instead on government insurance resources such as Social Security survivors benefits.

Question 4

Two-Income Families Witout Children

Answer 4

may not be severely affected by the premature death of one wage earner.

Question 5

“Traditional” Families

Answer 5

consist of a mother, a father, and their children.

only one parent is employed, while the other partner manages the household and takes care of the dependent children.

Question 6

Blended Families

Answer 6

one or both partners bring with them dependent children from a prior relationship. One or both partners in the blended family may be employed.

Children may be born into the blended relationship, extending the timeline for child-care costs

Question 7

“Sandwiched” Families

Answer 7

include baby boomers, now middle-aged, who are providing financial support to both younger and older family members.

Question 8

Costs Associated With Premature Death

Answer 8

(1) Lost income

(2) Final costs
- Funeral costs, medical expenses, and so forth.

(2) Outstanding debts
- Credit card debts, mortgage

(3) Unpaid long-term obligations
- retirement savings , college tuitions,

(4) Estate planning costs
- Estate taxes, probate costs, lost charitable contribution

(5) Unfulfilled family obligations
- Family standard of living