2. Life Insurance Needs for a Young Married Couple. Kyle and Laura Parker from Ypsilanti, Michigan have
Question:
2. Life Insurance Needs for a Young Married Couple.
Kyle and Laura Parker from Ypsilanti, Michigan have been married for three years. They recently bought a home costing $212,000 using a $190,000 mortgage.
They have no other debts. Kyle earns $42,000 per year and Laura $41,000. Each has a retirement plan valued at approximately $10,000. They recently received a mail off er 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 fi ve years if one of them should die.
a. Assuming $10,000 in fi nal 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 Laura became pregnant?
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