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Charles is 45 years old and makes [tex]$40,000 per year. If he were to die, how much would the beneficiaries of his life insurance policy receive if they need 60% of his income?

\[
\begin{array}{|c|c|c|c|c|}
\hline
\text{Current Age} & 25 \text{ Years} & 35 \text{ Years} & 45 \text{ Years} & 55 \text{ Years} \\
\hline
\text{Current Gross Earnings} & 60\% & 60\% & 60\% & 60\% \\
\hline
\$[/tex]7,500 & 3.0 & 4.0 & 5.5 & 4.5 \\
\hline
\[tex]$9,000 & 3.0 & 4.0 & 5.5 & 4.5 \\
\hline
\$[/tex]15,000 & 3.0 & 4.5 & 6.0 & 5.5 \\
\hline
\[tex]$23,500 & 4.5 & 5.5 & 6.5 & 5.5 \\
\hline
\$[/tex]30,000 & 5.0 & 6.0 & 6.5 & 5.5 \\
\hline
\[tex]$40,000 & 5.0 & 6.0 & 6.0 & 5.5 \\
\hline
\$[/tex]65,000 & 5.5 & 6.0 & 6.0 & 5.0 \\
\hline
\end{array}
\]

A. [tex]$150,000$[/tex]
B. [tex]$240,000$[/tex]
C. [tex]$188,000$[/tex]
D. [tex]$140,000$[/tex]



Answer :

GinnyAnswer
To solve this problem, we need to calculate the life insurance payout for Charles based on his age, income, and the percentage of his salary his beneficiaries would need.

Here are the steps to determine the payout:

1. Identify Charles's Age and Income:
- Charles is 45 years old.
- Charles's current gross annual income is \[tex]$40,000. 2. Determine the Required Salary Percentage: - The beneficiaries can get by on 60% of his income. 3. Consult the Multiples-of-Salary Chart: - We look for the row where the current gross earnings are \$[/tex]40,000.
- We locate the column that corresponds to the 45-year-old age group and 60% of salary.

4. Retrieve the Life Insurance Multiple:
- For a 45-year-old with 60% of his salary, the chart indicates a multiple of 6.0.

5. Calculate the Payout:
- Multiply the current gross earnings by the life insurance multiple:
[tex]\[ \$40,000 \text{ (annual income)} \times 6.0 \text{ (multiple)} = \$240,000 \][/tex]

Thus, the beneficiaries of Charles's life insurance policy would receive \[tex]$240,000. Therefore, the correct answer is: \[ \boxed{\$[/tex]240,000}
\]