5. The family need method described below gives the most accurate estimate of the amount of life insurance you need. We assume your personal annual income is $60,000. First, you will need five times that in life insurance. Next, add 6 months of your familys living expenses as an emergency fund. We will assume your familys living expenses amount to $36,000 a year. Then, add $10,000 to cover your funeral expenses. Finally, we assume you have $150,000 in liquid assets such as money in savings accounts, money market funds, death benefits from other life insurance policies and Social Security survivor benefits which must be deducted from the sum of five times your annual income plus six months of your familys living expenses plus your funeral expenses. What is your need for life insurance under this method? (Hint: The amount of life insurance needed is the difference between the sum of five times the annual income, six months of living expenses and funeral expenses minus the amount of liquid assets.)

a. $178,000 b. $185,000 c. $190,000 d. $195,000