finance homework

NAME(S) __________________________________ DATE ________________

LIFE INSURANCE NEEDS

ITEM EXAMPLE YOUR AMOUNT

1. INCOME -REPLACEMENT Enter 75% of your current income. $30,000 $______________ 2. YEARS INCOME WILL BE NEEDED YEARS 10 15 20 25 30 40 FACTOR 8.98 12.84 16.35 19.52 22.39 31.42

Enter the factor number x 22.39 x______________ 3. SUBTOTAL 671,700 ______________ 4. FUNERAL EXPENSES Enter the amount for funeral expenses and other final-expense needs. + 10,000 +______________ 5. DEBT Enter the total amount of all debt owed. +140,000 +______________ 6. OTHER Consider other needs such as college-expenses, a readjustment-period for a spouse, or day care. + 0 +______________ 7. TOTAL EXPENSES Add lines 3, 4, 5, and 6. 821,700 ______________ 8. GOVERNMENT BENEFITS Take the monthly amount of Social Security survivor benefits and other benefits and multiply them by twelve and then multiply by the number of years they will be received. Subtract that amount ($1237 x 12 months x 14 years). - 207,816 - ______________ 9. OTHER Subtract other items such as current assets or added income from family members for the same time period as above. - 300,000 - ______________ 10. TOTAL This is how much insurance is needed to cover the needs of your survivors. $313,884 $______________