When the capital retention approach is used to determine how much life insurance to purchase,all of the following are subtracted from total assets to calculate the capital available to produce income EXCEPT

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When using the capital retention approach to determine life insurance needs, items that are not income producing or necessary for daily living expenses are subtracted from the total assets. This includes items such as cars and homes, but not investments in stocks and bonds which can produce income. Auto loans and credit card debt would also be subtracted to determine the net amount available for producing income. However, the amount needed to pay off the mortgage would be subtracted as it is a liability that would need to be paid off with the capital available.

When the Capital Retention Approach Is Used to Determine How