a. The human life value is one method for estimating the amount of life insurance to own.
Question:
1. The discount rate used to calculate the human life value is increased.
2. The amount of average annual income going to the family is increased.
3. The period over which income is paid to the family is reduced.
b. Explain the limitations of the human life value approach as a method for determining the amount of life insurance to own.
Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...
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a 1 If the discount rate is increased the human life value is reduced A smaller amount of money is n...View the full answer
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Related Book For 
Principles of Risk Management and Insurance
ISBN: 978-0132992916
12th edition
Authors: George E. Rejda, Michael McNamara
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