Question

You are a dual-income, no-kids family. You and your spouse have the following debts: Mortgage = $261,000; Auto loan = $10,000; Credit card balance = $2,150; and other debts = $6,200. Further, you estimate that your funeral will cost $9,000. Your spouse expects to continue to work after your death. Using the DINK method, what should be your need for life insurance?

Answer 1

$151,775

Step-by-step explanation:

Using DINK method

One half of mortgage, 261000 = 130500

One half of auto loan, 10000 = 5000

One half of credit card loan, 2150 = 1075

Other debt = 6200

Funeral cost = 9000

Thus,

Insurance = 130,500 + 5000 + 1075 + 6200 + 9000

= $151,775

Note that, DINK method involves adding one half of all debts plus funeral expenses. Although, one half of other debts isn't added. It's an insurance meant to keep one's spouse afloat should something happen to the other.