Term
| unlike the needs approach, which assumes liquidation of the life insurance proceeds, this approach preserves the capital needed to provide income to the family |
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Definition
| capital retention approach |
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Term
| the income-producing assets are then available for distribution to the heirs |
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Definition
| capital retention approach |
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Term
| the first step in the capital retention approach is to prepare a personal balance sheet that |
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Definition
| lists all assets and liabilities |
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Term
| the balance sheet should include all death benefits from |
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Definition
| life insurance and other sources |
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Term
| the 2nd step in the capital retention approach is to determine the amount of |
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Definition
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Term
| this step is performed by subtracting the liabilities, cash needs, and non-income producing capital from total assets |
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Definition
| step 2 in capital retention approach - determine the amt of income producing assets |
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Term
| the final step in the capital retention approach is to determine the amt of |
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Definition
| additional capital needed |
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Term
| determining the amt of additional capital needed involves a comparison of the income objective with |
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Definition
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Term
| has the advtg of simplicity, ease of understanding, and preservation of capital |
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Definition
| capital retention approach |
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Term
| investment income earned on educational and emergency funds can be used as a partial hedge against inflation |
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Definition
| capital retention approach |
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Term
| investment income earned on educational and emergency funds can be accumulated to offset rising education costs |
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Definition
| capital retention approach |
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Term
| the major disadvtg of the capital retention approach is that a larger amt of life insurance is required to produce a |
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Definition
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