Complete the Life Insurance worksheet using the information from Case Study 3.

Case Study Part 3

DJ Richards wondered if he had adequate life insurance for his family if he were to pass away. He decided to complete the Life Insurance Worksheet. His current yearly income is $38,400. He would like to leave income for his dependents for 30 years. He thinks a funeral will cost about $10,000. He has $181,000 in debt and he would like to leave $90,000 for his children for college.

His Social Security Benefit statement said that if he would to die right now, his spouse and children would receive $1,370 a month in benefits and he thinks they would get that amount for around 15 years. He doesnt really have any other assets that could be used toward these expenses.

Life Insurance Needs INCOME-REPLACEMENT FOR SURVIVORS Example Yours $30,000 1. Enter 75% of your current Income. 2. Choose number of years Income Replacement will be needed 3. Total Income Replacement. 2239 $671,000 $0.00 EXPENSES Example Yours 4. Funeral expenses $10,000 5. Debt + $140,000 + + 50 + 6. Other Expenses (day care, college, readjustment period for spouse, etc.) 7. Total Income Replacement (line 3) 8. Total Expenses. $671,000 $0.00 $821,700 $0.00 FUNDS FROM OTHER SOURCES Example Yours 9. Government Benefits $207,816 10. Other Funds (current assets, income from family members, etc.) + $300,000 + 11. Total Funds from other sources. $507,816 $0.00 Take the monthly amount of Social Security survivor benefits and other benefits and multiply by twelve and then multiply by the number of years benefits will be received (Example: $1237 x 12 months x 14 years = $207,816) TOTAL INSURANCE NEEDED Example Yours 12. Total Expenses (line 8). 13. Total Funds from other sources (line 11). $821,700 $0.00 $507,816 $0.00 14. Total Insurance Needed $313,884 $0.00