The Most Valuable Single Technique in Personal Risk Management to Assist

question 68

Multiple Choice

The most valuable single technique in personal risk management to assist an individual in determining how much life insurance is needed 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 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 a multiple of earnings adjusted for occupation.

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Definitions:

Franchises

Business models where individuals can buy the rights to open and operate a location of a larger company.

Capital Intensive

A characteristic of businesses that require large investments in capital assets, like machinery and equipment, to produce goods or services.

Labor Intensive

Describes a process or industry that requires a large amount of labor to produce its goods or services, compared to the amount of capital used.

Manufacturing Businesses

Companies engaged in the conversion of raw materials into finished products through the use of machinery and labor, often at a large scale.