Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

2. Yvette and Tim Cohen are 38 years old and have one son, age 9. Yvette is the primary wage earner, making $140,000 per year.

2. Yvette and Tim Cohen are 38 years old and have one son, age 9. Yvette is the primary wage earner, making $140,000 per year. Tim does not work. The Cohens have decided to use the needs-based approach to calculate the value of a life insurance policy that would provide for Tim and their son in the event of Yvettes death. (10 pts)

Final expenses estimated at $18,000

They want to replace Yvettes income until Tim is 65 (27 years)

Before they had their son, Tim was a programmer, but hes lost his knowledge would cost $40,000 to go back to school

Two auto loans of $32,200 (total) and credit card balance of $1200

12 years remaining on their mortgage but they have provided for this payment with Yvettes replaced income

Family would qualify for $8200 monthly social security benefits until the son is 18

Tim would invest benefits at 3%

They dont want to use their equity in their home or their 401(k)s in their calculations

Yvette has no life insurance currently

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

An Introduction To Socio-Finance

Authors: Jørgen Vitting Andersen, Andrzej Nowak

2013th Edition

3642419437, 978-3642419430

More Books

Students also viewed these Finance questions