Question

Suppose that yours is a typical family. Your annual income is $60,000. Using the easy method, what should be your need for life insurance?

Answer 1

The "easy method" holds that a person will require, in life insurance, a plan that will reimburse a value equal to 70% of a person's salary over a 7-year span. In this case, 70% of a person's $60,000 income would be: (60,000 * 7 * 0.70), or $294,000. A plan would have to have at least this much in value for it to be considered worth the while for investment.