C.25 Insurance needs analysis

Question 1

A method for calculating life insurance needs based on the present value of a person’s future earnings and financial contributions.

Answer 1

Human Life Value Approach

Question 2

A method of determining insurance needs by assessing a family’s financial obligations, income replacement needs, and existing resources.

Answer 2

Needs-Based Analysis

Question 3

A strategy where the death benefit is invested to generate income while preserving the principal for beneficiaries.

Answer 3

Capital Retention Method

Question 4

A strategy where both principal and interest are used to cover financial needs over time, often requiring less insurance than the capital retention method.

Answer 4

Capital Liquidation Method

Question 5

An assessment of the financial needs of dependents after the insured’s death, including expenses like mortgage payments, education costs, and daily living expenses.

Answer 5

Survivor Needs Analysis

Question 6

A process that evaluates the amount of disability coverage needed by considering lost income, existing benefits, and monthly expenses.

Answer 6

Disability Income Insurance Needs Analysis

Question 7

An assessment of potential long-term care costs, including nursing home care, in-home care, and assisted living, to determine appropriate insurance coverage.

Answer 7

Long-Term Care Insurance Needs Analysis

Question 8

Insurance used to protect businesses against financial loss due to the death or disability of a key employee or owner.

Answer 8

Business Continuation Insurance

Question 9

The use of life or disability insurance to fund a buy-sell agreement, ensuring business ownership transitions smoothly if an owner dies or becomes disabled.

Answer 9

Buy-Sell Agreement Funding

Question 10

An evaluation of the funds required to cover estate settlement costs, taxes, and debts to prevent the forced sale of assets.

Answer 10

Estate Liquidity Needs Analysis