2. How much life insurance do you need? Calculating needs Part 1 Kathy and Kevin Woo are 52 years old and have one daughter, age 14. Kathy is the primary earner making $80,000 per year. Kevin does not currently work. The Woos have decided to use the needs analysis method to calculate the value of a life insurance policy that would provide for Kevin and their daughter in the event of Kathy's death. Kathy and Kevin estimate that while their daughter is still living at home, monthly living expenses for Kevin and their child will be about $3,300 (in current dollars). After their daughter leaves for college in 4 years, Kevin will need a monthly income of $2,750 until he retires at age 65. The Woos estimate Kevin's living expenses after 65 will only be $2,300 a month. The life expectancy of a man Kevin's age is 82 years, so the Woo family calculates that Kevin will spend about 17 years in retirement. Using this information, complete the first portion of the needs analysis worksheet to estimate their total living expenses: Life Insurance Needs Analysis Worksheet Kevin and Kathy Woo Name of Insured Date July 31, 2015 Step 1: Financial Resources Needed after Death 1. Annual Living Expenses and other Needs Period 3 Period 1 Period 2 a. Monthly living expenses 3,300 b. Net yearly income needed (la x 12) c. Number of years in time period 4 9 17 d. Total living needs per time period (1b x 1c $924,600 Total Living Expenses (add Line 1d for each period to check your total): Aa Aa