Tim and Tammy Are Updating Their Financial Plan and Are

question 30

Multiple Choice

Tim and Tammy are updating their financial plan and are concerned that they might not have enough life insurance coverage for their family, which includes two children, ages 4 and 10. They have determined that their annual income is $70,000 and their net worth is now $150,000. What is the amount of life insurance they should carry using the "nonworking" spouse method?

• A) $140,000
• B) $343,000
• C) $490,000
• D) $700,000
• E) $750,000

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Definitions:

Centration

A cognitive limitation in preoperational stage children where they can focus on only one aspect of a situation at a time.

Reversibility

The cognitive ability to understand that actions can be reversed, restoring the original state.

Egocentrism

In developmental psychology, a characteristic of young children where they are unable to see a situation from another person's point of view.

Three-Mountain Task

A cognitive developmental measure designed by Jean Piaget to study children's ability to take on another's perspective and understand that different viewpoints exist.