Question

You are a dual income, no kids family. You and your spouse have the following debts (total): mortgage, $171,000; auto loan, $10,500; credit card balance, $2,000; and other debts of $6,750. Further, you estimate that your funeral will cost $3,250. Your spouse expects to continue to work after your death. Using the DINK method, what should be your need for life insurance?

A. $225,000

B. Over $225,000

C. $193,500

D. $101,750

E. $216,000

Answer 1

Solution:

DINK method rule:

The DINK method has you adding half of all your debts to your funeral expenses.

So, the calculation for life insurance need

Need for life insurance Dink Method = Funeral + 0.5 * Debt

= $3,250 + 0.5 *($171,000 + $10,500 + $2,000 + $6,750)

= $3,250 + $95,125

= $98,375.

Note:

I am solved this question under DINK method rule. But given choices are not matched to my answer.