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Personal Finance 1st Edition by Jack R. Kapoor
Edition 1ISBN: 1308231393Personal Finance 1st Edition by Jack R. Kapoor
Edition 1ISBN: 1308231393Estimating Life Insurance Needs Using the DINK Method. You are a dual income, no kids family. You and your spouse have the following debts:
Mortgage 5 $190,000; Auto loan 5 $10,000; Credit card balance 5 $2,000, and other debts of $4,000. Further, you estimate that your funeral will cost $6,000. Your spouse expects to continue to work after your death. Using the DINK method, what should be your need for life insurance?
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The DINK Method – If a person has no dependents and his spouse earns as much as or more than he does, there are simple insurance needs. All that is needed is to ensure that the spouse would not be unduly burdened by debts should he die.
This method assumes that the spouse will continue to work after the person’s death.
Total insurance needs using the DINK method is equal to estimated funeral expenses, other debts and 50% of mortgage, loans and all personal debt amounts
One half of the mortgage is 0.5 times of $190,000.
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