Question 4005 of 303 · California Life-Only Agent Exam

The needs approach to determining the amount of life insurance is based on

Exactly one answer is correct.

Athe insured's expected lifetime earnings discounted to present value
Bthe financial obligations the family would face if the insured died
Ca fixed multiple of the insured's current annual income
Dthe premium that the family can afford each year

Show solution

Correct answer to question 4005

B: the financial obligations the family would face if the insured died

Explanation

The needs approach adds up final expenses, debts, income needs, and education costs, then subtracts existing assets.