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You and your spouse are in good health and have reasonably secure careers. Each of you makes about $40,000 annually. You own a home with a mortgage of $80,000, and you owe $15,000 on car loans, $5,000 in personal debts, and $4,000 on credit card loans. You have no other debts. You have no plans to increase the size of your family in the near future. Assume funeral expenses of $10,000. Estimate your total insurance needs using the DINK method.

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jepessoa

Answer:

$62,000

Explanation:

the DINK method or double income, no kids method, makes two basic assumptions when considering insurance needs:

  • both spouses work and earn the same salaries
  • if one spouse dies, the remaining one will keep working

In order to determine total insurance needs you add funeral expenses ($10,000) + half of mortgage ($40,000) + half of auto loan ($7,500) + half of credit card debts ($2,000) + half of personal debts ($2,500) = $62,000

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