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.

---

Definitions:

Carbene

A highly reactive molecule containing a carbon atom with two nonbonded electrons and bonded to two atoms typically forming a divalent species.

Relative Reactivity

A comparison of the reactivity rates of different substances under the same conditions, indicating how easily one substance reacts relative to another.

Secondary Hydrogens

Hydrogen atoms attached to a carbon atom bonded to two other carbon atoms.

1-Bromobutane

An organic compound, also known as n-butyl bromide, used in organic synthesis as an alkylating agent.