Chapter 17 Question and answers verified to pass 2024/2025
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Course
WCJC
Institution
WCJC
Chapter 17 Question and answers verified to pass 2024/2025 Chapter 11 - Life Insurance
Premature death - correct answer The death of a family head with outstanding unfulfilled financial obligations, such as dependents to support, children to educate, and a mortgage to payoff.
Single Peopl...
Chapter 11 - Life Insurance
Premature death - correct answer ✔The death of a family head with
outstanding unfulfilled financial obligations, such as dependents to support,
children to educate, and a mortgage to payoff.
Single People - correct answer ✔Do not need large amounts of life
insurance, as they do not have dependents, or other financial obligations; not
likely to die prematurely.
Single-parent families - correct answer ✔The need for large amounts of life
insurance on the family head is great.
Single-Parent Families - correct answer ✔Premature death of a single-parent
can cause great economic insecurity for the surviving children.
Two income earners w/ children - correct answer ✔Both income-earners
need substantial amounts of life insurance, because the death of one income-
earner can cause economic insecurity for the surviving family members, as
both incomes provide the current standard of living.
Two income families w/o children - correct answer ✔Premature death of one
income earner is not likely to cause economic insecurity for the surviving
spouse.
Traditional families - correct answer ✔One parent is in the labor force, the
other is at home taking care of children. The working parent needs substantial
amounts of life insurance.
, Traditional Families - correct answer ✔The non-employed spouse needs life
insurance in case they die prematurely, because the cost of child-care
services can be a financial burden.
Blended Families - correct answer ✔Divorced spouse w/ children remarries,
and the new spouse also has children. The need for life insurance on both
family heads is great, because both spouse' are generally in the labor force
and the reduction of income may result in a lower standard of living.
Sandwiched Families - correct answer ✔Son/daughter with children provides
financial support to parent(s). A substantial amount of life insurance is
recommended for the working spouse. Can result in a loss of financial support
to the aged parent(s) and children.
Human Life Value Approach - correct answer ✔Present value of the family's
share of the deceased breadwinner's future earnings. Crudely measures the
economic value of a human life.
Human Life Value Approach - correct answer ✔Other sources of income are
ignored: social security survivor benefits, income from IRA's, 401k plans, and
private pension death benefits.
Human Life Value Approach - correct answer ✔In the basic model:
occupations are not considered, work earnings/expenses are assumed to be
constant, employee benefits are ignored.
Human Life Value Approach - correct answer ✔The amount of money
allocated to the family can quickly change because of divorce, birth of a child,
or death of a family member.
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