Based on the Following Information, How Much Disability Insurance Coverage

question 15

Multiple Choice

Based on the following information, how much disability insurance coverage per month would be required: • Mortgage payment -$1,600/month
• Household insurance -$100/month
• Car insurance -$200/month
• Gas and oil -$90/month ($30 commuting to and from work)
• Food -$200/month ($70 represents lunch at work which would be reduced by half if the meals were prepared at home)
Employer disability insurance would provide $500/month and it is doubtful that anything would be received from either Social Security or worker's compensation.

• A) $1,525
• B) $2,190
• C) $1,495
• D) $1,625

---

Definitions:

Exclusive Agreement

A contract between two or more parties where one party agrees to buy, sell, or promote only the products or services of the other party.

Reasonable Efforts

A legal standard that requires a party to act with fair, honest, and diligent efforts to fulfill an obligation.

Actual Authority

The specific powers that a principal has expressly given to an agent to make decisions on their behalf.

Agency Relationship

A legal and fiduciary relationship between two parties, where one person (the agent) is authorized to perform acts or make decisions on behalf of another (the principal).