Life Insurance Basics
A client has a large mortgage and wants the family to stay in the house. How is that reflected in the lump-sum calculation?
Answer and explanation
Answer: D. Clearing the mortgage at death is a one-time obligation, so the outstanding balance enters the lump-sum column and the family's monthly outlay falls away. The house is not a liquid resource, and lender-arranged cover is not to be assumed.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, lump-sum needs
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