1. How much life insurance should you purchase? Click on “Life Insurance Policies” in the right margin, then on “How Much Life Insurance do you Need?” First, three techniques are described that you should not use.
What is the major benefit of using the "Salary Multiple Method?” What is the major shortcoming of this technique?
b. What are the major problems with using the human life value method?
c. What important considerations are ignored under the "Cover Your Debts Method?”
2. The "Needs Approach" (as described in your text) is the same as the "Classic Formula" approach described in article used to answer the previous question. What are the five steps in "A Classic Formula"?
3. As this may be your first exposure to life insurance, you may have some questions about the products and life insurer underwriting and ratemaking practices. Click on the “Life Insurance Basics” link in the right margin under “Life Insurance Basics.” Use this article to answer the following questions.
a. The article describes an “orderly way” to go about shopping for life insurance. What are the steps in this process?