Question

What are the assumptions considered while using the needs analysis method to arrive at the insurance cover amount?

It provides benefit in the period immediately following the death of the insured to offset additional expenses, it supports the normal living expenses of the dependents, it provides long term income for the retired surviving spouse, it takes into account the financial liabilities and financial responsibilities of the individual.

It provides benefit in the period immediately preceding the death of the insured to offset additional expenses, it supports the extraordinary living expenses of the dependents, it provides long term income for the retired surviving spouse, it takes into account the financial assets and financial responsibilities of the individual.

It provides benefit in the period immediately following the death of the insured to offset additional expenses, it supports the normal living expenses of the dependents, it provides short term income for the retired surviving spouse, it takes into account the financial liabilities and financial assets of the individual.

It assumes that the insured has no financial liabilities or responsibilities.

Posted under IC22 Life Insurance Underwriting

Answer: (a).It provides benefit in the period immediately following the death of the insured to offset additional expenses, it supports the normal living expenses of the dependents, it provides long term income for the retired surviving spouse, it takes into account the financial liabilities and financial responsibilities of the individual. Explanation:The needs analysis method attempts to arrive at future financial needs of the beneficiaries and then translates this into the death benefit amount. The method is based on several assumptions, including providing benefit in the period immediately following the death of the insured to offset additional expenses, supporting the normal living expenses of the dependents, providing long-term income for the retired surviving spouse, and taking into account the financial liabilities and financial responsibilities of the individual.

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Q. What are the assumptions considered while using the needs analysis method to arrive at the insurance cover amount?

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