A method of determining the amount of life insurance coverage needed by multiplying gross annual earnings by some selected number is called:

Question

Quizplus · Accepted Answer

The method described is the Multiple of earnings method, which is a popular and simple way to estimate the amount of life insurance needed to protect against loss of income due to premature death. This method typically involves multiplying gross annual earnings by a certain number (such as 10 or 20) to arrive at a recommended coverage amount. However, this method may not take into account other important factors, such as outstanding debts, future expenses, and inflation, which are addressed more fully in the Need analysis method.

A Method of Determining the Amount of Life Insurance Coverage