EBK PFIN
EBK PFIN
6th Edition
ISBN: 8220103648844
Author: Billingsley
Publisher: CENGAGE L
Question
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Chapter 8, Problem 1FPE

a)

Summary Introduction

To discuss: The advice given by person X for person M.

b)

Summary Introduction

To discuss: The factors considered in purchasing extra life insurance.

c)

Summary Introduction

To discuss: The kinds of policy person M will purchase.

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Deciding if additional life insurance is needed and, if so, appropriate type.   Use Worksheet 8.1. Harvey Cook, 45, is a recently divorced father of two children, ages 10 and 7. He currently earns $95,000 a year as an operations manager for a utility company. The divorce settlement requires him to pay $1,500 a month in child support and $400 a month in alimony to his ex-wife.  She currently earns $35,000 annually as a schoolteacher.  Harvey is now renting an apartment, and the divorce settlement left him with about $100,000 in savings and retirement benefits. His employer provides a $75,000 life insurance policy. Harvey’s ex-wife is currently the beneficiary listed on the policy.   What advice would you give to Harvey? What factors should he consider in deciding whether to buy additional life insurance at this point in his life? If he does need additional life insurance, what type of policy or policies should he buy? Use Worksheet 8.1 to help answer these questions for Harvey.
Danny and Sandy have come to your office to discuss some retirement planning issues.  Danny will be turning age 65 in five months and Sandy is currently 63. Danny has not started collecting Social Security benefits yet because he is still working, and he is unsure whether he will retire this year or wait a few more years. Sandy has never worked outside the home.  If he continues to work, Danny will have health insurance for both himself and Sandy through his employer with a $250 annual per person deductible, a 90% coinsurance, and a maximum out-of-pocket limit of $5,000.  Danny’s share of the premium is $50 per pay.  Many of their retirement questions have to do with Medicare and health insurance because both Danny and Sandy have existing health issues.  All the following statements are proper advice for you to give Danny and Sandy, EXCEPT: Danny should delay enrollment in Medicare Part B until he is no longer covered under his employer’s health plan. Sandy will be eligible for…
6. Jessa is 19 and is trying to determine the annual premium for her auto insurance. She finds that she will pay $223 for $50,000 in property damage coverage, $44 for uninsured motorist coverage, $68 for comprehensive coverage, and $98 for collision coverage. The youthful-operator factor is 2.35 because she has been through a driver training course. What is Jessa's annual premium? O $914.15 O $1,017.55 O$909.30 O$433.00
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