Final answer:
The Human-Life Value Approach is a method used to calculate the amount of life insurance a person should purchase based on their potential future earnings and financial obligations. Factors such as age, current income, future income potential, and financial responsibilities should be considered. It is important to consult with a financial advisor or insurance professional for personalized advice.
Step-by-step explanation:
The Human-Life Value Approach is a method used to calculate the amount of life insurance a person should purchase based on their potential future earnings and financial obligations. To determine how much life insurance Alexa should purchase for herself, we need to consider factors such as her age, current income, future income potential, and financial responsibilities.
For example, if Alexa is a young professional with a promising career and a high income potential, she may need a larger amount of life insurance to provide financial security for her family in case of her premature death. On the other hand, if Alexa is a student with no dependents and minimal financial obligations, she may require less life insurance coverage.
It is essential to consult with a financial advisor or insurance professional to assess Alexa's specific circumstances and recommend an appropriate amount of life insurance coverage. They can consider her income, expenses, debts, and future financial goals to determine the right coverage amount.