An employer provides all employees with term life insurance equal to their annual income. Using the income method with a factor of 5, how much additional life insurance will an employee earning $75,000 per year need?

Question

Quizplus · Accepted Answer

The income method suggests life insurance coverage should be 5 times the annual income. For an income of $75,000, this amounts to $375,000. The employer already provides $75,000, so the employee needs an additional $300,000.

An Employer Provides All Employees with Term Life Insurance Equal