Which of the Following Is True of the Multiple-Of-Earnings Method

question 17

Multiple Choice

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

• 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 divides the gross annual earnings of the insured by the insurance coverage available to the insured to determine the amount of annual insurance premium.
• E)The multiple-of-earnings method determines the amount of tax benefits available to the insured when the life insurance coverage is availed.