Which of the Following Statements Regarding the Multiple-Of-Earnings Method Is

question 23

Multiple Choice

Which of the following statements regarding the multiple-of-earnings method is true?

• A) The multiple-of-earnings method determines the amount of life insurance coverage needed by multiplying the net annual earnings of the insured by some selected number.
• B) The multiple-of-earnings method determines the amount of life insurance coverage needed by multiplying the gross annual earnings of the insured by some selected number.
• C) The multiple-of-earnings method considers the insured's financial obligations to compute the insurance premium amount.
• D) The multiple-of-earnings method subtracts specific financial obligations and resources from the gross annual earnings of the insured to determine the amount of annual insurance premium.
• E) The multiple-of-earnings method multiplies the amount of tax benefits available to the insured when the life insurance benefit is paid.

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Definitions:

Pressure Relief Valve

A pressure-limiting device that trips at a predetermined pressure to define circuit pressure or act as a safety device. A safety pop-off valve is one type of pressure relief valve.

High-Pressure Cut-Off Switch

A safety feature in systems that automatically stops the system when the pressure exceeds a predefined limit to prevent damage.

Muffler

A component of a vehicle's exhaust system designed to reduce noise produced by the exhaust process.

Discharge Side

The part of a system where fluid or gas exits or is expelled, often referring to pumps, compressors, and other fluid handling equipment.