Use Worksheet 8.1. Given your current personal financial situation, do you feel you need life insurance coverage?
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Use Worksheet 8.1. Given your current personal financial situation, do you feel you need life insurance coverage? Why or why not? Use Worksheet 8.1 to confirm your answer and calculate how much additional insurance (if any) you might need to purchase.
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Worksheet 8.1, Chapter 8, Exercise 1 Insured's Name Skylar Step 1: Financial resources needed after death 1. Annual living expenses and other needs a. Monthly living expenses b. Net yearly income needed (ax 12) LIFE INSURANCE NEEDS ANALYSIS METHOD 2. Special needs a. Spouse education fund b. Children's college fund c. Other needs c. Number of years in time period $ d. Total living need per time period (bxc) TOTAL LIVING EXPENSES (add lined for each period): Step 2: Financial resources available after death 1. Income a. Annual Social Security survivor's benefits 3. Final expenses (funeral, estate costs, etc.) 4. Debt liquidation a. House mortgage b. Other loans c. Total debt (4 a + 4 b) 5. Other financial needs TOTAL FINANCIAL RESOURCES NEEDED (add right column) b. Surviving spouse's annual income c. Other annual pensions and Soc. Sec. benefits d. Annual income, (la+1b+1c) e. Number of years in time period f. Total period income (dxe) g. TOTAL INCOME 2. Savings and investments $ 2,000 $ $ 24,000.00 $ Period 1 Step 3: Additional Life Insurance needed Step 1: Total financial resources needed Step 2: Total financial resources available ADDITIONAL LIFE INSURANCE NEEDED $ $ 3 10 72,000.00 $ 600,000.00 $ 140,000 $ 5,500 Period 1 10,200.00 $ Period 2 3. Other life insurance 4. Other resources sale of condo TOTAL FINANCIAL RESOURCES AVAILABLE (1g+2+3+4) 5,000 $ 60,000.00 $ Period 2 10,200.00 $ $ 10,200.00 $ 3 10 $ 30,600.00 $ 102,000.00 $ 10,200.00 $ Date Period 3 Period 3 February 6,2020 $ 672,000.00 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 5,000 145,500.00 25,000 847,500.00 132,600.00 77,500.00 110,000.00 320,100.00 847,500.00 320,100.00 527,400.00
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Related Book For
Personal Financial Planning
ISBN: 9780357438480
15th Edition
Authors: Randy Billingsley, Lawrence J. Gitman, Michael D. Joehnk
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