2. How much life insurance do you need? Calculating needs - Parti Jason and Eleanor Stein are 52 years old and have one daughter, age 14. Jason is the primary earner, making $80,000 per year. Eleanor does not currently work. The Steins have decided to use the needs analysis method to calculate the value of a life insurance policy that would provide for Eleanor and their daughter in the event of Jason's death. Jason and Eleanor estimate that while their daughter is still living at home, monthly living expenses for Eleanor and their child will be about $3,300 (in current dollars). After their daughter leaves for college in 4 years, Eleanor will need a monthly income of $2,750 until she retires at age 65. The Steins estimate Eleanor's living expenses after 65 will only be $2,300 a month. The life expectancy of woman Eleanor's age is 87 years, so the Stein family calculates that Eleanor will spend about 22 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 Name of insured Date Jason and Eleanor Stein July 31, 2015 Step 1: Financial resources needed after death 1. Annual living expenses and other needs Period 2 Period 3 Period 1 $3,300 Monthly living expenses Name of insured Jason and Eleanor Date July 31, 2015 Stein Step 1: Financial resources needed after death 1. Annual living expenses and other needs Period 1 Period 2 Period 3 a $3,300 b. s Monthly living expenses Net yearly income needed (1a x 12) Number of years in time period Total living needs per time period (16 x 1c) C 22 d $1,062,600 Total living expenses (add Line 1d for each period to check your total): In addition to these monthly expenses, other future outlays must be accounted for. Before they had a child, Eleanor worked as a mechanical engineer, but her knowledge and skills are now somewhat outdated. Therefore, they include $25,000 for Eleanor to go back to schod. Additionally, Jason and Eleanor want to create a college fund of $30,000 to fund their child's college education. They estimate that final expenses (funeral costs and estate taxes) will amount to $12,000. Finally, they have taken out a loan for home improvements of $130,000 and an automobile loan of $5,000. They own their home but still have an outstanding mortgage of $300,000 Using this information, complete the next portion of Step 1 to determine the total financial resources needed 2. Special needs 5 S 50 3 4. Spouse's education fund Chad's college rund Other needs Final expenses (funeral costs and estate taxes) Det lidation House mortgage Other loans Tot debt (434) Other financial needs Total france resources needed right-hand column plus the Total Living perses you calculated): 30 IS The second half of the needs analysis worksheet is not shown on this page. To complete the worksheet and determine the value of the feinsurance policy the Steins should purchase, they need to factor is ditional information True or False Josons future salary te he does not e) rould be accounted for in the remaining portion of the form True Grade It Now Save & Continue Continue without Sing 80 :: DU 10 FO 11 $ 4 & 7 % 5 2 60 3 6 9 Q W E R T Y U 1 S D F G H J . Z V 00 N M 2. How much life insurance do you need? Calculating needs - Parti Jason and Eleanor Stein are 52 years old and have one daughter, age 14. Jason is the primary earner, making $80,000 per year. Eleanor does not currently work. The Steins have decided to use the needs analysis method to calculate the value of a life insurance policy that would provide for Eleanor and their daughter in the event of Jason's death. Jason and Eleanor estimate that while their daughter is still living at home, monthly living expenses for Eleanor and their child will be about $3,300 (in current dollars). After their daughter leaves for college in 4 years, Eleanor will need a monthly income of $2,750 until she retires at age 65. The Steins estimate Eleanor's living expenses after 65 will only be $2,300 a month. The life expectancy of woman Eleanor's age is 87 years, so the Stein family calculates that Eleanor will spend about 22 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 Name of insured Date Jason and Eleanor Stein July 31, 2015 Step 1: Financial resources needed after death 1. Annual living expenses and other needs Period 2 Period 3 Period 1 $3,300 Monthly living expenses Name of insured Jason and Eleanor Date July 31, 2015 Stein Step 1: Financial resources needed after death 1. Annual living expenses and other needs Period 1 Period 2 Period 3 a $3,300 b. s Monthly living expenses Net yearly income needed (1a x 12) Number of years in time period Total living needs per time period (16 x 1c) C 22 d $1,062,600 Total living expenses (add Line 1d for each period to check your total): In addition to these monthly expenses, other future outlays must be accounted for. Before they had a child, Eleanor worked as a mechanical engineer, but her knowledge and skills are now somewhat outdated. Therefore, they include $25,000 for Eleanor to go back to schod. Additionally, Jason and Eleanor want to create a college fund of $30,000 to fund their child's college education. They estimate that final expenses (funeral costs and estate taxes) will amount to $12,000. Finally, they have taken out a loan for home improvements of $130,000 and an automobile loan of $5,000. They own their home but still have an outstanding mortgage of $300,000 Using this information, complete the next portion of Step 1 to determine the total financial resources needed 2. Special needs 5 S 50 3 4. Spouse's education fund Chad's college rund Other needs Final expenses (funeral costs and estate taxes) Det lidation House mortgage Other loans Tot debt (434) Other financial needs Total france resources needed right-hand column plus the Total Living perses you calculated): 30 IS The second half of the needs analysis worksheet is not shown on this page. To complete the worksheet and determine the value of the feinsurance policy the Steins should purchase, they need to factor is ditional information True or False Josons future salary te he does not e) rould be accounted for in the remaining portion of the form True Grade It Now Save & Continue Continue without Sing 80 :: DU 10 FO 11 $ 4 & 7 % 5 2 60 3 6 9 Q W E R T Y U 1 S D F G H J . Z V 00 N M