Chapter One: Aflac Insurance Exam

To furnish with income; especially to make a grant of money providing for the continuing support or maintaince

An individual share of something distributed; as a share in a pro rata distribution (as profits) to stockholders. Also a share of surplus allocated to a policy holder in a participating insurance policy

The assets and liabilities left by a person at death.

A tax in the form of a percentage of the taxable estate that is imposed on a property owner's right to transfer the propert to others after his or her death compare inheritance tax

Budgets for current and anticipated expenses, an takes into account other income sources as well as projections on what costs such as Health Care could amount to in the future. The analysis will tally expenses, including a factor for inflation, calulate the present value using a conservative rate of return, then offset that by existing assets. Ultimately, the net number produced reflects the amount of life insurance believed to be needed to support survivors.

Evaluates the economic life of the decendent- the monetary total of all that he or she would have produced and accumulated in a lifetime, thus the method reflects earnings potention and is not cost based.

A stock of accumulated goods especially at a specified time and in contast to encome recieved during a specific period; also the value of these accumulated goods.

A capital sum earning interest, due as a debt, or used as a fund

A charge for borrowed money generally a percentage of the amount borrowed. The profit in goods or money that is made on invested capital. An excess above what is due or expected

To liquidate debts,damages, or accounts. To determine liabilities and apportion assets toward discharging indebtedness.

The outlay of money usually for income or profit: capital outlay; also the sum invested the property purchased.

A method used to estimate the amount of life insurance to own. Under this method, teh insurance proceeds are retained and are not liquidated.

One of the two methods of calculating your familys life insurance needs under the family needs approach. It is not an independent approach. Rather. it os one of two ways to determine the lump sumof insurance proceeds the survivng spouse needs to revieve and invest to provide for ongoing family income needs. Under this approach, you estimate the necessary lump sum assuming that you will be liquidating all the proceeds over the surviving spouses remaing life expectancy. The idea is that the proceeds, or capital, will be used up either at or slightly after the end of the surviving spouses life expectancy. This way, you reduce the amount of life insurance you need to purchase while covering for your family's needs underthe most likely scenario: the surviving spouse not living significantly beyond his or her life expectancy.

The property of a deceased person subject by law to the payment of his or her debts legacies. The entire property of a person, association, corporation, or estate applicable of subject to the payment of debts.

It provides that upon the occurence of a specified "triggering event", owners are guarenteed that their interest in teh business will be purchase. It also provides that the owner's interest must be sold to the company, the remaining oweners, or a combination of the two. As well providing a mechanism whereby the purchase price may be determined by the market conditions in existence upon the occurrence of the event. And it provides a funding source, primarily through insurance policies, so that the liquidity needs of the business or its owners will not be onerous; and establishing a valuation of a deceased owner's interest in the business for estate tax purposes