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Which of the Following Statements Regarding the Multiple-Of-Earnings Method Is

Question 23

Multiple Choice

Which of the following statements regarding the multiple-of-earnings method is true?


A) The multiple-of-earnings method determines the amount of life insurance coverage needed by multiplying the net annual earnings of the insured by some selected number.
B) The multiple-of-earnings method determines the amount of life insurance coverage needed by multiplying the gross annual earnings of the insured by some selected number.
C) The multiple-of-earnings method considers the insured's financial obligations to compute the insurance premium amount.
D) The multiple-of-earnings method subtracts specific financial obligations and resources from the gross annual earnings of the insured to determine the amount of annual insurance premium.
E) The multiple-of-earnings method multiplies the amount of tax benefits available to the insured when the life insurance benefit is paid.

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