What is the Meaning of Spendthrift and Exceedingly Expensive? Spendthrift is a term that most people associate with life insurances. Yet, the phrase is somewhat misleading. While insurance cost is true that the word spendthrift describes people who have allowed excessive expenditure of their money without regard to their financial security or well-being, the spendthrift clause in life ins is rarely used in life coverage contracts. The reason for this is that the clause does not actually state any limit on the amount of expenditure permitted. Spendthrift is linkedin , not a limitation. So, when car insurance that you are permitted to spend X amount of dollars within a specified period (the spendthrift period), it means that you are entirely free to spend as much money as you want. Of course, in the real world, there are limits on spending and money within a specified period can be allocated and spent in a sensible manner. So, which of the following is true regarding the spendthrift clause in life ins? A. No limit. Spending within the policy is completely unlimited. You may spend X amount of dollars at your whim and it will never make a difference to your death benefit. B. Yes, the spendthrift clause is a part of the policy document. However, it is not a blanket restriction. You can still use the policy as you wish under the spending limit guidelines provided under the policy document. Which of the following is true regarding the spendthrift clause in life ins? A. This is actually a very good question to ask. In fact, this question is an important one. Basically, you should choose your life insurance company based on the following factors: Which of the following is true regarding the spendthrift clause in life insurance? The fact that you cannot be guaranteed coverage after death is what turns most people to consider life insurance as a non-issue. However, this is a serious mistake. This policy serves as a vehicle for you to pay tribute to your loved ones, to your lifestyle, and to a career that you may have pursued. B. You should also consider the fact that you may not have been able to afford coverage after death. This is especially the case if you had retired from your job prior to obtaining life insurance. This will impact the amount of money that you will need to pay towards your policy. C. Lastly, do not forget about your future. If at all possible, you should plan for your funeral expenses well in advance. This will mean that you can have your funeral paid for using the life insurance proceeds. At the very least, it will keep the expense out of your family's budget. D. Spendthrift is simply a word that is used to describe someone who does not pay their own way through life insurance. A truly bankrupt person will have their life insurance policy cancelled for the reason that they are not paying their own way. You should avoid people who are irresponsible in all aspects of their lives. They may be irresponsible with their careers, but certainly more so with their life. Do your best to avoid any such person when applying for life insurance. E. Forsake means that the insured has made a specific decision to surrender his policy. A policy holder cannot surrender their life insurance policy for any reason whatsoever. If a policy holder were to do this, they would forfeit their claim. A. Yes. F. Exceedingly expensive means that the premium of a policy will be beyond an individual's or family's ability to pay. In the United States, the phrase excessively expensive can mean any policy that costs more than the insurance company or issuer will be willing to pay. There are policies available that will cover individuals at risk of death for only a fraction of their life insurance premiums. Individuals who qualify for these types of policies are usually very healthy. G. isfundability means that the policy will never pay out because of a lack of funding. This differs from the excessiveness, which means that a policy may cost more than the insurer will ever pay. A policy can never become bankrupt and cannot become bankrupt because it does not pay out. Both exceedingly expensive and isfundability can apply to life insurances; the terms are often used interchangeably when speaking about life insurance.
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