Tim and Tammy are updating their financial plan and are concerned that they might not have enough life insurance coverage for their family, which includes two children, ages 4 and 10. They have determined that their annual income is $70,000 and their net worth is now $150,000. What is the amount of life insurance they should carry using the "nonworking" spouse method?

Life insurance amount carry by Tim and Tammy is $140,000

Explanation:

Given:

Ages of child = 4 years and 10 years

Annual income = $70,000

Net worth = $150,000

Method: Nonworking spouse method

Computation:

Nonworking spouse method = (18 year - Youngest child age) × $10,000

Nonworking spouse method(Life insurance) = (18 year - 4 year) × $10,000

Nonworking spouse method(Life insurance) = 14 × $10,000

Nonworking spouse method(Life insurance) = $140,000

Life insurance amount carry by Tim and Tammy is $140,000

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