1- You and your spouse are in good health and have reasonably secure jobs. Each of you makes about $49,000 annually. You own a home with a $95,000 mortgage, and you owe $15,600 on car loans, $6,800 in personal debt, and $3,950 in credit card loans. You have no other debt. You have no plans to increase the size of your family in the near future. You estimate that funeral expenses will be $8,000. Estimate your total insurance needs using the DINK method.

2- Tim and Allison are married and have two children, ages 5 and 12. Allison is a "nonworking" spouse who devotes all of her time to household activities. Estimate how much life insurance Tim and Allison should carry to cover Allison.

3- Suppose you are 46 and have a $190,000 face amount, 14-year, limited-payment, participating policy (dividends will be used to build up the cash value of the policy). Your annual premium is $665. The cash value of the policy is expected to be $7,600 in 14 years. Using time value of money and assuming you could invest your money elsewhere for a 8 percent annual yield, calculate the net cost of insurance. Use (Exhibit 1-A, Exhibit 1-B, Exhibit 1-C, Exhibit 1-D)