Question

Surprise! Jamie Lee and Ross were stunned to find that their family of two has grown to a family of five! They were expecting twins, but when the babies were born, they discovered that they were actually the parents of triplets! Ross immediately had worries of being able to provide for the growing family: diapers, formula, college expenses times three! What if something happened to him or Jamie Lee? How would the surviving parent be able to provide for such a large family? Jamie Lee and Ross decided to purchase life insurance for Ross because his is the higher income at this time and because it would be more devastating if his income was lost due to his death. They have allowed $8,200 for funeral costs Calculate their living expenses for 6 months to include all monthly expenses, excluding credit card debt and entertainment. Note that Ross's mother lives close and will be providing childcare to their triplets once Jamie Lee goes back to work at the bakery for half days His mom will have a hired nanny to assist, which will cost them $1,300 a month. Use the table below to determine the amount Jamie Lee and Ross should use when shopping for life insurance. Each answer must have a value for the assignment to be complete. Enter "O" for any unused categories urrent Financial Situation Assets Checking account Savings account Emergency fund savings account IRA balance Car (Jamle Lee) Car (Ross) Llabllltles: Student loan balance Credit card balance Car loans Income $47000 $16,200 Net Income after taxes (Jamie Lee $32,900 $71,000 $58,900 $2,700 Gross Income (Jamie Lee) $19,300 $25,200 Gross Income (Ross) Net Income after taxes (Ross) $11,700 Monthly Expenses: $19,200 Mortgage $1,255 $420 $220 $170 $510 $285 $285 $291 $135 Property taxes $0 Homeowners Insurance $3,700 Utilities $7,200 Food Gas/malntenance Credit card payment Car loan payment Entertalnment

Answer 1

Insurance need for Ross with gross annual income of $ 71,000.

Family need method for insurance
1	Yearly Income*5		71000*5	$355,000
2	Total expenses above and beyond daily livining cost for you and your dependent		None	$0
3	Emergency Fund need(6 month living expenses)		4451*6	$26,706
4	Funeral expenses			$8,200
5	Total estimate of family financial need(sum of 1to 4)			$389,906
6	Total liquid assets			$63,400
7	Life insurance need(5-7)			$326,506
	Total Liquid asset
		Checking account	$2,700
		Saving Account	$16,200
		Emergency Fund saving Account	$19,300
		IRA Balance	$25,200
				$63,400