The Most Preferred Technique for Determining How Much Life Insurance

question 78

Multiple Choice

The most preferred technique for determining how much life insurance coverage is needed for an individual 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 the 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 the multiple-of-earnings method adjusted for occupation.

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Definitions:

Postindustrial Societies

Societies characterized by an economy where the service sector produces more wealth than the industrial sector, reflecting a shift away from manufacturing-based economies.

Information Based

Pertaining to systems or processes that primarily depend on the processing, storage, and dissemination of data and information.

Division of Labor

is the allocation of different tasks and responsibilities to different individuals or groups, typically to increase efficiency and productivity.

Status Inconsistency

Occurs when an individual's social positions have both high and low ranks, leading to a disparity in their expected social status.