1. Matthew Paul of Sisseton, South Dakota, is single and has been working as an admissions counselor at a university for five years. Matthew owns a home valued at $156,000 on which he owes $135,000. He has a two-year-old vehicle valued at $12,500 on which he owes $8000. He has about $13,800 remaining on his student loans. His retirement account has grown to $7800, and he owns some stock valued at $4400. Matthew has no life insurance and is considering buying some. How much should he buy?

2. Amy and Mack Holly from Macomb, Illinois, have been married for three years. They recently bought a home costing $212,000 using a $190,000 mortgage. They have no other debts. Mack earns $42,000 per year, and Amy earns $41,000. Each has a retirement plan valued at approximately $10,000. They recently received an offer in the mail from their mortgage lender for a mortgage life insurance policy of $190,000. Their only life insurance currently is a $20,000 cash-value survivorship joint life policy. They each would like to provide the other with support for five years if one of them should die.

(a) Assuming $10,000 in final expenses and $20,000 allocated to help make mortgage payments, calculate the amount of life insurance they need using the needs-based approach.

(b) How would their needs change if Amy became pregnant?

3. Alexandra Cunningham of College Park, Maryland, has a $100,000 participating cash-value policy written on her life. The policy has accumulated $4700 in cash value; Alexandra has borrowed $3000 of this value. The policy also has accumulated unpaid dividends of $1666. Yesterday Alexandra paid her premium of $1200 for the coming year. What is the current death benefit from this policy?