The most valuable single technique in determining how much life insurance is needed is:
A)Computing the Human Life Value.
B)Using the probability of death each year, prevailing interest rates, and assumed inflation rates to find the discounted present value of a future income stream.
C)Assessing the family's total economic needs and subtracting financial resources available to meet those needs.
D)Estimating the sum of money which, when paid in installments, will produce the same income as the person would have earned, after deducting assumed amounts for taxes and personal maintenance expenses.
E)Using a multiple of earnings adjusted for occupation.

Question

Quizplus · Accepted Answer

Assessing the family's total economic needs and subtracting financial resources available to meet those needs is the most valuable technique in determining how much life insurance is needed. This takes into account the current and future financial responsibilities of the family, such as mortgage payments, education costs, and living expenses, while also considering any existing savings, investments or other sources of income that can be used to meet those needs. This approach provides a comprehensive and personalized assessment of the required life insurance coverage for the individual's specific situation.

The Most Valuable Single Technique in Determining How Much Life