Life Insurance Basics
Why can the human life value approach and the needs approach produce different amounts for the same client?
Answer and explanation
Answer: D. One method capitalises what the earner would have produced, the other adds up the specific sums the survivors will require, so the two rarely coincide. The needs approach in fact subtracts existing resources, and both apply whether or not other cover exists.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, human life value approach
More life insurance basics questions
- Which measure of survivor protection asks what income the family loses at the insured's death?
- Which New York section governs advertising by an insurance producer?
- Which of these is a cash need rather than a continuing income need in a personal needs analysis?
- Which of these is a lump-sum need in a life insurance analysis?
- Which term does New York's illustration rule prohibit in describing the application of nonguaranteed elements?
- Which three factors determine a life insurance premium?
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