46. John Doe, 43 years old, is planning to take care of his elderly father, Steve, who is 75 years old. His father receives $1,200 per month in social security payments and $3,200 per month from a company pension. Steve has an annuity payment of $500 per month from investments, and these figures noted are all of Steve's available income. The annuity payments will end in three (3) years in 2023. John receives $95,000 salary at his current job. He has stocks and investments valued at $125,000, and a home with a fair market value of $165,000. John's liabilities include a mortgage of $80,000 and other personal debts of $14,000. John expects Steve to live another 12 years to 2031 and wishes to provide financial security for him when Steve moves to an assisted living residence next month where expenses will be $6,500 per month. To provide for his father's living expenses, how much life insurance should John have for a 15 year term policy? (8 points) 11 LIFE INSURANCE NEEDS ANALYSIS METHOD Insured's Name Step 1: Financial resources needed after death 1. Annual living expenses and other needs: Period 1 Period 2 Period 3 Monthly living expenses Net yearly income needed (a x 12) Number of years in time period Total living need per time period (bxd) TOTAL LIVING EXPENSES (add lined for each period): 2. Special needs Spouse education fund Children's college fund Other needs 3. Final expenses (funeral, estate costs, etc.) 4. Debt liquidation House mortgage Other loans Total debt (4 a + 4b) 5. Other financial needs TOTAL FINANCIAL RESOURCES NEEDED Step 2: Financial resources available after death 1. Income Period 1 Period 2 Period Annual Social Security survivor's benefits Surviving spouse's annual income Other annual pensions and Soc. Sec. benefits Annual income Number of years in time period $ Total period income (dx e) 8. TOTAL INCOME Savings and investments Other life insurance Other resources TOTAL FINANCIAL RESOURCES AVAILABLE Step 3: Additional Life Insurance needed Step 1: Total financial resources needed Step 2: Total financial resources available ADDITIONAL LIFE INSURANCE NEEDED 46. John Doe, 43 years old, is planning to take care of his elderly father, Steve, who is 75 years old. His father receives $1,200 per month in social security payments and $3,200 per month from a company pension. Steve has an annuity payment of $500 per month from investments, and these figures noted are all of Steve's available income. The annuity payments will end in three (3) years in 2023. John receives $95,000 salary at his current job. He has stocks and investments valued at $125,000, and a home with a fair market value of $165,000. John's liabilities include a mortgage of $80,000 and other personal debts of $14,000. John expects Steve to live another 12 years to 2031 and wishes to provide financial security for him when Steve moves to an assisted living residence next month where expenses will be $6,500 per month. To provide for his father's living expenses, how much life insurance should John have for a 15 year term policy? (8 points) 11 LIFE INSURANCE NEEDS ANALYSIS METHOD Insured's Name Step 1: Financial resources needed after death 1. Annual living expenses and other needs: Period 1 Period 2 Period 3 Monthly living expenses Net yearly income needed (a x 12) Number of years in time period Total living need per time period (bxd) TOTAL LIVING EXPENSES (add lined for each period): 2. Special needs Spouse education fund Children's college fund Other needs 3. Final expenses (funeral, estate costs, etc.) 4. Debt liquidation House mortgage Other loans Total debt (4 a + 4b) 5. Other financial needs TOTAL FINANCIAL RESOURCES NEEDED Step 2: Financial resources available after death 1. Income Period 1 Period 2 Period Annual Social Security survivor's benefits Surviving spouse's annual income Other annual pensions and Soc. Sec. benefits Annual income Number of years in time period $ Total period income (dx e) 8. TOTAL INCOME Savings and investments Other life insurance Other resources TOTAL FINANCIAL RESOURCES AVAILABLE Step 3: Additional Life Insurance needed Step 1: Total financial resources needed Step 2: Total financial resources available ADDITIONAL LIFE INSURANCE NEEDED