Karl and Jennifer have come to you to assess their insurance needs. Karl is a supervisor in a manufacturing company and earns $70,000 per year, and Jennifer works as a assistant in a financial firm earning $30,000 per year. Both are covered for life insurance at work for two times their annual salaries. Both of them have disability benefits from a group policy that would pay them a 60% disability benefit. They have around $150,000 of mortgage outstanding, and they have investments worth $20,000. They have a car loan outstanding of $5,000. They estimate that funeral expenses would be $15,000, If one of them were to die, they reckon that they would require 60% of their combined income to run their house. They have two children, aged eight years and six. They would like to make sure $100,000 will be left to the surviving spouse to fund the children's education. How much insurance do they need if investments earn a return of 5%, rounded to the nearest thousand?

Answer rating: 100% (QA)

To calculate the insurance needs for Karl and Jennifer we need to consider various factors such as t... View the full answer