Needs Approach
Personal insurance method used to analyze the amount necessary to maintain a family in its customary life-style, should the primary wage earner die. This includes such considerations as:
- immediate needs ("cleanup fund") expenses associated with final medical treatments and burial, inheritance taxes, estate taxes, probate costs, outstanding debt.
- continued income while children are still in school and depend on family support.
- continued income for the surviving spouse after children no longer depend on family support.
- continued income to pay a mortgage, education expenses, emergency expenses, and miscellaneous expenses.
- retirement fund for the surviving spouse.
Popular Insurance Terms
Rules used by state regulators to value securities on the books of insurance companies. Bonds with acceptable credit quality are carried at amortized value, which is the face value plus or ...
Coverage for numerous perils such as that found in the broad form personal theft insurance. ...
Transaction in which the property owner (for example, a pension fund) agrees to pay the insurance company a rate of return tied to the fluctuations in real estate prices. In return, the ...
Retirement plan offered by public employers and tax-exempt organizations. Under Section 403(b) of the Internal Revenue Code, certain tax-exempt organizations such as public school systems ...
Insured, or an applicant for insurance, with lower expectation of incurring a loss than the standard applicant. For example, an applicant for life insurance who does not smoke can usually ...
Term that describes commercial insurance with no administrative services attached, or alternatively, administrative services from an insurer without insurance coverage. Years ago, insureds ...
Single premium immediate annuity purchased to fund a structured settlement. This product is purchased when the injured party (the plaintiff) wishes to have a monthly income payment for life ...
Total of the number of accumulation units times the accumulation unit value for a variable annuity. Similar procedure is followed in the calculation of the current market value of a mutual ...
Maximum amount of insurance coverage that an underwriter will write on a particular class of property or risk exposure. ...
Have a question or comment?
We're here to help.