Surprisel Jamie Lee and Ross were stunned to find that their family of two has grown...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Surprisel Jamie Lee and Ross were stunned to find that their family of two has grown to a family of fivel They were expecting twins, but when the babies were born, they discovered that they were actually the parents of triplets! Ross immediately had worries of being able to provide for the growing family: diapers, formula, college expenses times three! What if something happened to him or Jamie Lee? How would the surviving parent be able to provide for such a large family? Jamie Lee and Ross decided to purchase life insurance for Ross because his is the higher income at this time and because it would be more devastating if his income was lost due to his death. They have allowed $8,100 for funeral costs. Calculate their living expenses for 6 months to include all monthly expenses, excluding credit card debt and entertainment. Note that Ross's mother lives close and will be providing childcare to their triplets once Jamie Lee goes back to work at the bakery for half days. His mom will have a hired nanny to assist, which will cost them $1,250 a month. Use the table below to determine the amount Jamie Lee and Ross should use when shopping for life insurance. Each answer must have a value for the assignment to be complete. Enter "O" for any unused categories. Current Financial Situation Assets: Income: $2,600 Gross income (Jamie Lee) $46,000 Checking account Savings account $16,100 Net income after taxes (Jamie Lee) $32,200 Emergency fund savings account $19,200 Gross income (Ross) $70,000 IRA balance $25,100 Net income after taxes (Ross) $58,100 Car (Jamie Lee) $11,600 Monthly Expenses: Car (Jamie Lee) $11,600 Monthly Expenses: Car (Ross) $19,100 Mortgage $1,240 Liabilities: Property taxes $410 Student loan balance $0 Homeowners insurance $210 Credit card balance $3,600 Utilities $165 Car loans $7,100 Food $505 Gas/maintenance $280 Credit card payment $280 Car loan payment $290 Entertainment $130 Use the "family need" method to complete 1. Yearly income x 5 (1] 2. Total approximate expenses above and beyond your daily living costs for you and your dependents (e.g. tutition, care for disabled child or parent) (2) 3. Emergency fund needed (6 months of living expenses) [3] Use the "family need" method to complete 1. Yearly income x 5 [1] 2. Total approximate expenses above and beyond your daily living costs for you and your dependents (e.g. tutition, care for disabled child or parent) [2] 3. Emergency fund needed (6 months of living expenses) [3] 4. Expected funeral expenses [4] 5. Total estimate of family's financial needs (sum of lines 1- 4) [5] 6. Total liquid assets (e.g. savings account, CDs, money market funds, other life insurance, pension plan death benefits, and Social Security benefits) [6] 7. Life insurance needs (total estimate of needs minus liquid assets) [7] Surprisel Jamie Lee and Ross were stunned to find that their family of two has grown to a family of fivel They were expecting twins, but when the babies were born, they discovered that they were actually the parents of triplets! Ross immediately had worries of being able to provide for the growing family: diapers, formula, college expenses times three! What if something happened to him or Jamie Lee? How would the surviving parent be able to provide for such a large family? Jamie Lee and Ross decided to purchase life insurance for Ross because his is the higher income at this time and because it would be more devastating if his income was lost due to his death. They have allowed $8,100 for funeral costs. Calculate their living expenses for 6 months to include all monthly expenses, excluding credit card debt and entertainment. Note that Ross's mother lives close and will be providing childcare to their triplets once Jamie Lee goes back to work at the bakery for half days. His mom will have a hired nanny to assist, which will cost them $1,250 a month. Use the table below to determine the amount Jamie Lee and Ross should use when shopping for life insurance. Each answer must have a value for the assignment to be complete. Enter "O" for any unused categories. Current Financial Situation Assets: Income: $2,600 Gross income (Jamie Lee) $46,000 Checking account Savings account $16,100 Net income after taxes (Jamie Lee) $32,200 Emergency fund savings account $19,200 Gross income (Ross) $70,000 IRA balance $25,100 Net income after taxes (Ross) $58,100 Car (Jamie Lee) $11,600 Monthly Expenses: Car (Jamie Lee) $11,600 Monthly Expenses: Car (Ross) $19,100 Mortgage $1,240 Liabilities: Property taxes $410 Student loan balance $0 Homeowners insurance $210 Credit card balance $3,600 Utilities $165 Car loans $7,100 Food $505 Gas/maintenance $280 Credit card payment $280 Car loan payment $290 Entertainment $130 Use the "family need" method to complete 1. Yearly income x 5 (1] 2. Total approximate expenses above and beyond your daily living costs for you and your dependents (e.g. tutition, care for disabled child or parent) (2) 3. Emergency fund needed (6 months of living expenses) [3] Use the "family need" method to complete 1. Yearly income x 5 [1] 2. Total approximate expenses above and beyond your daily living costs for you and your dependents (e.g. tutition, care for disabled child or parent) [2] 3. Emergency fund needed (6 months of living expenses) [3] 4. Expected funeral expenses [4] 5. Total estimate of family's financial needs (sum of lines 1- 4) [5] 6. Total liquid assets (e.g. savings account, CDs, money market funds, other life insurance, pension plan death benefits, and Social Security benefits) [6] 7. Life insurance needs (total estimate of needs minus liquid assets) [7]
Expert Answer:
Answer rating: 100% (QA)
Family need method for insurance 1 Yearly Income x 5 ... View the full answer
Related Book For
Focus on Personal Finance
ISBN: 978-0077861742
5th edition
Authors: Jack R. Kapoor, Les R. Dlabay Professor, Robert J. Hughes, Melissa Hart
Posted Date:
Students also viewed these finance questions
-
Cepat Sdn. Bhd. (CSB) produces a liquid fertiliser for local farmers. The fertiliser is made in two consecutive production processes. The cost accountant has provided the following information for...
-
1. It has been suggested by Jamie Lee and Ross professional investment counselor to perform a financial check-up as the first step in investing in mutual funds, even though they are investing $50,000...
-
Jamie Lee and Ross need to evaluate their emergency fund of $21,000. Will their present emergency fund be sufficient to cover them should one of them lose their job? Show the equation for calculating...
-
The Kroger Company reported the following data in its annual report (in millions). Instructions a. Compute Kroger?s inventory turnovers for fiscal years ending January 28, 2017, and January 30, 2016,...
-
Suppose that a certain manufacturer has a monopoly on the sorority and fraternity ring business (a constant-cost industry) because he has persuaded the Greeks to give it exclusive rights to their...
-
In initial measurement of property, plant, and equipment, what costs are eligible for capitalization, and what kind of costs are not eligible?
-
Teddys daily budget constraint is shown in the following chart. Teddys employer pays him a base wage rate plus overtime if he works more than the standard hours. What is Teddys daily nonlabor income?...
-
The computer workstation furniture manufacturing that Santana Rey started in January is progressing well. As of the end of June, Business Solutions job cost sheets show the following total costs...
-
How to convert this Entity-Relationship data model into a relational database model? Contains Inventory Inventory ID Customer Cust_ID Amount Availible Cust LName Must Have Coffee_Type Cust Fname...
-
When Corona leased farmland to a strawberry farmer named Armando Munoz Juarez, it claimed a security interest in his strawberry crop. Coronas financing statement listed the farmers name as Armando...
-
Let S be the surface of the paraboloid z = 3 2x? 2y? for z > -5 oriented with the outward unit normal. Let F(x, y, z) = (x + y)i yj+ zk be the velocity field of a fluid. (a) Sketch S. (b)...
-
How can leaders cultivate resilience and mitigate burnout among team members, ensuring sustainable levels of productivity and well-being?
-
John experienced a loss after investing in the S corporation of which he was an employee. In what way do the at-risk rules affect a taxpayer? a) The at-risk rules limit the amount of losses a...
-
A block of mass m = 2.00 kg is attached to a spring of force constant k = 470 N/m as shown in the figure below. The block is pulled to a position x = 4.25 cm to the right of equilibrium and released...
-
Under Increasing leadership and organizational effectiveness, we have "In search of excellence", "The learning organization" and "Competing for the future". How do these theories showcase leadership...
-
How can leaders adeptly foster resilience and alleviate burnout among team constituents, thereby guaranteeing enduring levels of productivity and well-being?
-
1. 2. Does compression steel yield at Mn (nominal moment)? Find Mn (design moment strength.
-
Chao, Louis, and Mari, unrelated individuals, own all of the shares of Cerise Corporation. All three shareholders have been active in the management of Cerise since its inception. In the current...
-
Match the following terms with an appropriate statement. a. Coinsurance b. Stop-loss c. Hospital indemnity policy d. Exclusion and limitations e. Copayment f. Eligibility
-
Assume you have $5,000 to invest and are trying to decide between two different companies. One company is a tobacco company that has increased sales, profits, and dividends over the last five years....
-
In 2011, selected automobiles had an average cost of $16,000. The average cost of those same automobiles is now $20,000. What was the rate of increase for these automobiles between the two time...
-
On July 1, 20X3, Barker Company purchased 20 percent of Acme Companys outstanding common stock for $400,000 when the fair value of Acmes net assets was $2,000,000. Barker does not have the ability to...
-
In January 20X0, Farley Corporation acquired 20 percent of Davis Companys outstanding common stock for $800,000. This investment gave Farley the ability to exercise significant influence over Davis....
-
On January 1, 20X7, Robohn Company purchased for cash 40 percent of Lowell Companys 300,000 shares of voting common stock for $1,800,000 when 40 percent of the underlying equity in Lowells net assets...
Study smarter with the SolutionInn App