Question

You and your spouse are in good health and have reasonably secure careers. Each of you makes about $33000 annually. You own a home with an $86000 mortgage, and you owe $31600 on car loans, $4300 in personal debts and $5800 on credit card loans. You have no other debts. You have no plans to increase the size of your family in the near future. Average funeral expenses for the area are $8400.

Estimate your total insurance needs using the DINK method.

(Round your answer to the nearest whole number. Do not include the comma, period, and "$" sign in your response.)

Answer 1

Sol:

As per DINK method (Dual income no kids) insurance needed is (Half of all Debt + Funeral Expenses)

	Debt	Debt ratio	Total value
Mortgage	86000	0.5	43000
Car loan	31600	0.5	15800
Personal debt	4300	0.5	2150
Credit card loan	5800	0.5	2900
Funeral expense	8400	1.0	8400
Total			72250

Therefore total insurance needed using the DINK method is 72250

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