Life · Chapter 10 · Amount of Coverage
Multiple-of-Earnings Method
Definition
A rough estimate of insurance need: a pre-set multiple of current earnings — practitioners often use 5 or 7 × annual salary. Crude, but better than the "seat-of-the-pants" method (an arbitrarily selected amount).
Easy to confuse with
These are what this term gets tested against — if you can't tell them apart cold, drill the contrast.
Related terms