Multiple Indemnity Policies Should Be Ignored as a Source of Funds

question 91

True/False

Multiple indemnity policies should be ignored as a source of funds when determining insurance needs because it offers no protection if the insured's death is due to natural causes.

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Definitions:

Year Ended

Refers to the end of an accounting period or fiscal year, marking the time for preparing financial statements and closing books.

Cash Flows

The total amount of money being transferred into and out of a business, particularly in terms of liquidity, financing, and investing activities.

Financial Statement

Documents that provide an overview of a company's financial condition, including the balance sheet, income statement, and cash flow statement, used by internal and external stakeholders.

Present Value

The present value of a future amount of money or series of cash flows, assuming a certain rate of return.