Question

A married man with a wife, a 10-year-old son, and a job that brings in $57,000 a year purchases life insurance. He uses the single parent method to determine how much to insure his wife's life. How much should the policy pay out

Answer 1

$80,000

Step-by-step explanation:

The calculation is fairly simple, just subtract the child's age from 18 = 18 - 10 = 8 years, and then multiply by $10,000.

The single parent method generally recommends that the parent that stays at home (in this case the wife) must be insured for approximately $10,000 for each year that the child needs to reach 18 and become an adult.