Final answer:
Fred, a 30-year-old with a salary of $60,000 and no dependents, might not need life insurance currently. However, planning for future obligations could mean purchasing a small policy. Option A, $0, could be reasonable, but a modest policy might be chosen for future needs.
Step-by-step explanation:
The amount of life insurance that Fred currently needs cannot be precisely determined without more information about his debts, financial obligations, and personal goals. However, considering his situation, here are a few considerations to make: Fred is 30 years old, single, living with his parents, and earns a salary of $60,000. If he wishes to provide a safety net for his potential future spouse, Lisa, whom he plans to marry within five years, he might consider buying life insurance. It allows for financial security in the event of his unexpected death.
One traditional method of calculating life insurance needs is the 'DIME' formula, which stands for Debt, Income, Mortgage, and Education. But since Fred has no dependents, no mention of debt or mortgage, and we have no information about the need to fund education, his immediate insurance need might be lower than for someone with these obligations. Future planning could include expenses related to marriage or potential children, but these are speculative and not immediate needs.
Given these factors, an option could be a small policy that covers potential final expenses and a few years of income replacement, or he might decide he doesn't immediately need life insurance. The options listed (B, C, D) might be excessive given his current situation without dependents. Here, option A. $0 might be a reasonable answer, although Fred might still choose to have a small policy in anticipation of future obligations.