Life Insurance Basics
How does the needs approach differ from the human life value approach?
Answer and explanation
Answer: C. The needs approach adds up what survivors will actually need, such as final expenses, debt repayment, income replacement, and education, then subtracts existing resources. Human life value works from lost earnings instead, and the two ordinarily produce different figures.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, needs approach
More life insurance basics questions
- On what must a recommendation under Regulation 187 be based?
- Two clients need the same monthly survivor income. Why does the capital retention approach require a larger death benefit than capital liquidation?
- Two partners agree that on the death of either, the survivor will buy the deceased's share. How does life insurance support that?
- Under FCRA, if an insurer orders an investigative consumer report involving personal interviews regarding an applicant's character and lifestyle, when must written notice be sent to the applicant?
- What determines the effective date of coverage where no premium accompanies the application?
- What distinguishes an investigative consumer report from an ordinary consumer report?
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