Term
| once you determine you need life insurance, the next step is to |
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Definition
| calculate the amt of life insurance to own |
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Term
| some life insurers and financial planners recommend that insureds carry life insurance equal to |
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Definition
| some multiple of their earnings |
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Term
| 3 approaches to estimate the amt of life insurance to own |
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Definition
| human life value approach, needs approach, capital retention approach |
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Term
| the present value of the family's share of the deceased breadwinner's future earnings |
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Definition
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Term
| in step 1 of calculating human life value, estimate the individual's average annual earnings over his or her |
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Definition
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Term
| in step 2 of calculating human life value, deduct federal and state income taxes, social security taxes, and the costs of self-maintenance. the remaining amt is used to |
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Definition
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Term
| in step 3 of calculating human life value, determine the number of years from the person's present age to the |
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Definition
| contemplated age of retirement |
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Term
| in step 4 of calculating human life value, using a reasonable discount rate, determine the present value of the family's share of earnings for the |
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Definition
| period determined in step 3 |
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Term
| other sources of income are ignored, such as social security survivor benefits and private pensions death benefits |
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Definition
| limitation of human life value approach |
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Term
| in its simplest form, work earnings and expenses are assumed to be constant, and employee benefits are ignored |
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Definition
| limitation of human life value approach |
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Term
| the amt of money allocated to the family can quickly chance b/c of divorce, birth of a child, or death of a family member |
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Definition
| limitation of human life value approach |
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Term
| in the human life value approach, the long run discount rate is |
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Definition
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Term
| the human life value can be substantially increased by assuming what kind of discount rate? |
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Term
| a limitation of the human life value approach - inflation on earnings and expenses are |
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Definition
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