Social Security Benefits Go to the Social Security Web site, at www.ssa.gov, and click on “Calculate Your Benefits.” If you’re married or have children, enter your own financial information to see what benefit you or your children could be entitled to collect. If you’re not married and don’t have children, enter hypothetical information based on what you think your financial circumstances will be 10 years from now.

Life Insurance Needs Analysis Kate is a single parent who earns \($40,000\) per year. Her household expenses are \($28,000\) per year. If she were to die, she estimates that the costs of her death would be \($10,000\). She has not participated in Social Security long enough to be fully insured. She would also want her life insurance to provide an education fund for her 10-year-old twins and a lump sum for their continued care, which she estimates at \($15,000\) annually until they are 18.

1.Would an income-multiple approach result in Kate’s purchase of sufficient life insurance?

Why or why not?

2.Using a financial needs approach, how much life insurance would you recommend that Kate buy?

3.If Kate were fully insured under Social Security and her children would be eligible for total annual benefits of \($10,000\), how much difference would this make in her life insurance needs?