Bob and Sally have three children and called you to review their life insurance needs, Based on
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Question:
Bob and Sally have three children and called you to review their life insurance needs, Based on the information below, calculated the amount of life insurance Bob requires.
Sally’s After-tax income (last calendar year) $45,000
Bob’s After- tax income (last calendar year) $55,000
Joint Investment $150,000
Sally’s RRSP’s $70,000
Bob’s RRSP’s $65,000
Bob’s Vehicle $50,000
Sally’s Vehicle $35,000
Primary Residence $1 Million
Cash $35,000
Mortgage $485,000
Jewelry $45,000
Antiques $30,000
Line of Credit (loan) $55,000
Credit Cards $20,000
Personal loans (cars, etc.) $45,000
Education Costs $115,000
Funeral Costs each $20,000
Continuing household expenses $60,000
• They are beneficiaries of each other’s RRSPs
• They would not liquidate the investment portfolio which generates $5,000 annually
• Investment rate are at 6%. • Inflation is 2.5%
• Tax rate on investments is 20%
• The antiques and jewellery would not be liquidated upon the death of one.
• They would sell Sally’s vehicle in the event of either of their deaths
• They would like the calculation based on a 20-year period.
Related Book For
Auditing A Practical Approach with Data Analytics
ISBN: 978-1119401742
1st edition
Authors: Raymond N. Johnson, Laura Davis Wiley, Robyn Moroney, Fiona Campbell, Jane Hamilton
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