The most valuable single technique in determining how much life insurance is needed is: a Computing...

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.

Solutions

Expert Solution

Ans c) Assessing the family's total economic needs and subtracting financial resources available to meet those needs.

The most valuable single technique in determining how much life insurance is needed is assessing the family's total economic needs and subtracting financial resources available to meet those needs.

jeff jeffy answered 2 years ago

Next > < Previous

Related Solutions

The "Needs Analysis Method" of determining how much life insurance to buy, which can also be...

The "Needs Analysis Method" of determining how much life insurance to buy, which can also be used in determining the amount of disability coverage, consists of a.dividing your annual income by a market interest rate. b.multiplying your annual income by a fixed factor. c.dividing your total wealth by a market interest rate. d.determining your household's continuing economic expenses minus your household's existing financial resources if the adverse event occurs. e.determining how much inheritance is appropriate for your children. As opposed...

An owner of a football stadium is determining how much fertilizer is needed to keep the...

An owner of a football stadium is determining how much fertilizer is needed to keep the grass in the football stadium green. Thus, the owner collected the following data on how much fertilizer was used in 10 football stadiums from throughout the country. The unit of measurement is number of pounds per 1,000 square feet. Field Fertilizer 1 1.35 2 1.46 3 1.51 4 1.42 5 1.46 6 1.35 7 1.59 8 1.37 9 1.33 10 1.66 Prior to the...

Insurance companies track life expectancy information to assist in determining the cost of life insurance policies....

Insurance companies track life expectancy information to assist in determining the cost of life insurance policies. Last year the average life expectancy of all policyholders was 77 years. ABI Insurance wants to determine if their clients now have a longer life expectancy, on average, so they randomly sample some of their recently paid policies. The insurance company will only change their premium structure if there is evidence that people who buy their policies are living longer than before. Which of...

How much money on average will an insurance company make off of a 1-year life insurance...

How much money on average will an insurance company make off of a 1-year life insurance policy worth $50,000, if they charge $800.00 for the policy, and you have a 0.9999 probability of surviving the year? When I tried solving this, I ended up with $750.72 but the answer key says $795

One of the most difficult aspects of climate change policy is determining how much individuals are...

One of the most difficult aspects of climate change policy is determining how much individuals are willing to sacrifice today for a better environment in the future. What are some of the factors that may influence whether a person holds a high discount rate (putting a low value on the better environment in the future and high value on comfort today) or a low discount rate (putting a low value on comfort today and a high value on better environment...

Section I: Life Insurance Given the scenario below, please indicate whether life insurance is needed, if...

Section I: Life Insurance Given the scenario below, please indicate whether life insurance is needed, if so, what type (term, whole life, Universal or Variable Universal) and why? Anthony is an engaged mechanical engineer for Nissan Motors in Decherd, Tennessee. He spends most of his time with his fiancé, Max who owns a small cupcake bakery. Max and Anthony plan to get married in the next 6 months and would like to have children soon. Anthony makes $115,000 a year...

Determining the Selling Price of a Home Determining how much to pay for a home is...

Determining the Selling Price of a Home Determining how much to pay for a home is one of the more difficult decisions that must be made when purchasing a home. There are many factors that play a role in a home’s value. Location, size, number of bedrooms, number of bathrooms, lot size, and building materials are just a few. Fortunately, the website Zillow.com has developed its own formula for predicting the selling price of a home. This information is a...

Question