There are several good methods for determining the necessary amount of life insurance coverage. The needs-based method is thorough in that it accounts for much more than just income replacement and final expenses. To begin the conversation through this process you can use the acronym LIFE. L = Liabilities, I = Income Replacement, F = Final Expenses and E = Education. You are helping your client work on the Education calculations to input into the life insurance needs summary. Your client's child is 10 years old and will start university at 18-year-old, 8 years from now. The current cost is $11,000 for one year of the program and they are anticipating a 4-year degree. Education costs are inflating at 3.5%. Your client currently has $12,000 in an education savings account that earns 6% interest annually net of fees. We will apply the real/inflation-adjusted rate to reflect how inflation offsets investment return. How much does your client need to add to the education fund today if they want to have the entire cost of the four-year education fully funded in 8 years?

PLEASE SHOW CALCULATIONS STEP BY STEP.