Bellamy and Clarke are a very successful couple in their mid-30's. Bellamy is a security consultant and Clarke is the senior vice-president of marketing for an medical supplies company. They call you to discuss and advise on their insurance needs.

Bellamy's income (last calendar year) $84,000 Clarke's income (last calendar year) $83,000 Investments (current rate of interest 6.3%) $608,000 RRSP's $341,000 Real Estate $1.23 Million Cash $14,700 Mortgage $287,000 Line of Credit (loan) $225,000 Credit Cards $0 Personal loans (cars, etc.) $113,000 Investment Rate 6.30% Taxes on income 20% Inflation 2%

1. How much insurance does Clarke need using the capitalization of income approach for 20 years? $ Hint: Just based on replacing income (PMT) and using the depletion method

2. How much would be required to pay the last or final expenses of Bellamy or Clarke? $

3. If Bellamy was to acquire a disability policy with a 60% benefit, what would the monthly disability income benefit be? $