Question

You and your spouse are in good health and have reasonably secure jobs. Each of you makes about $45,000 annually. You own a home with a $150,000 mortgage, and you owe $11,600 on car loans, $7,200 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 $8,000. Estimate your total insurance needs using the DINK method.

Answer 1

The Insurance needs using DINK method is $94,025

Step-by-step explanation:

In order to calculate the total insurance needs using the DINK method, we would have to use the following formula:

Insurance needs using DINK method = Funeral expense + 0.5 × Mortgage + 0.5 × Car loan + 0.5 × Personal debt + 0.5 × credit card loans

= $8,000 + 0.5 ×$150,000 + 0.5 ×$11,600 + 0.5× $7,200 + 0.5 × $3,250

= $8,000+$75,000+$5,800+$3,600+$1625

=$94,025

Hence, the Insurance needs using DINK method is $94,025