Fin 334 Week One Assignment 1

1055 Words Apr 22nd, 2016 5 Pages
Week One Assignment 1 Sametta Rose- Pollydore FIN 334 April 9, 2016

Instructor McAndrew

Week One Assignment 1

A. Sonja fails to pay the second annual premium due on January 1. She dies 15 days later. When it comes to the premium which is the ordinary life insurance, the beneficiary will receive the proceeds of that policy because there is a grace period of 31 days to pay the overdue premium and by Sonja’s death occurring within that time frame of the grace period the beneficiary has the right to receive the proceeds from
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She is uninsurable but would like to obtain additional life insurance. In this particular situation Sonja has already attached the guaranteed purchase option to her ordinary life insurance so; therefore she doesn’t have to worry about not being insured. She also can obtain additional life insurance because she will not need to show evidence of insurability. (Rejda, George, McNamara, 2014).

E. Sonja is seriously injured in an auto accident. After six months, she is still unable to return to work. She has no income from her job, and the insurance premium payments are financially burdensome. In this case Sonja has an ordinary life insurance with the waiver-of-premium attached so after six months all premiums would be waived if Sonja is totally disabled. Under some policies, a retroactive refund of the premium paid during the first six months would be paid. (Rejda, George, McNamara, 2014).

F. Sonja has a mentally disabled son. She wants to make certain that her son will have a continuous income after her death. In this particular situation I would say to have a Trust as well as a Will. Having a Will can specifically state exactly what the decease last wishes were and by having a Trust with someone assigned to the Trust or a guardian on the Will, will make everything crystal clear with no hassles on what the last demands were. Another way is to use the fixed amount or fixed period option which