The Income Method, Used to Calculate Your Life Insurance Coverage

question 98

Multiple Choice

The income method, used to calculate your life insurance coverage, multiplies your current annual income by

• A) your expenses per month.
• B) the number of your dependents.
• C) some arbitrary number, such as 10.
• D) your life expectancy.

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Definitions:

Intangible Benefits

Benefits that cannot be physically touched or quantified easily, such as brand reputation or customer loyalty.

Required Rate Of Return

The minimum percentage return an investor expects to achieve by investing in a particular asset or project.

Tangible Costs

Costs that have a clear and direct physical presence or can be easily measured in monetary terms.

Investment Proposal

A formal suggestion for investing capital, typically encompassing projected costs, benefits, risks, and returns.