Question

You and your spouse are in good health and have reasonably secure jobs. Each of you makes about $42,000 annually. You own a home with a mortgage of $165,000, and you owe $12,200 on car loans, $6,600 in personal debt, and $3,250 in credit card loans. You have no other debt. You have no plans to increase the size of your family in the near future. You estimate that funeral expenses will be $7,500. Estimate your total insurance needs using the DINK method.

Total insurance need __

Answer 1

Using the DINK method, the total insurance needs amount to $194,550 per person, based on their debts and estimated funeral expenses. For the couple combined, this amounts to $389,100 in total insurance coverage needed.

Step-by-step explanation:

Estimate your total insurance needs using the DINK method takes into consideration a couple's debts and final expenses to determine how much life insurance they should carry. In the scenario given, each spouse earns $42,000 annually, and their combined debts include a $165,000 mortgage, a $12,200 car loan, $6,600 in personal debt, and $3,250 in credit card debt. Funeral expenses are estimated at $7,500. To estimate total insurance needs, we would calculate:

• Total Debt: $165,000 + $12,200 + $6,600 + $3,250 = $187,050
• Funeral Expenses: $7,500
• Total Insurance Need: Total Debt + Funeral Expenses = $187,050 + $7,500 = $194,550 per person

Therefore, if you and your spouse both wish to be insured for these amounts, your combined total insurance need would be $194,550 times 2, which equals $389,100.