FINANCIAL PLANNING CASES their life insurance needs. Harry and Belinda are bas ing their calculations on a projected 4 percent rate of return after taxes and inflation. They also estimate the following expenses: $10,000 for final expenses, $6000 CASE 1 The Johnsons Change Their Life Insurance Coverage Harry and Belinda Johnson spend $15 per month on for readjustment expenses, and $5000 for repayment of life insurance in the form of a premium on a $10,000, paid-at-65 cash-value policy on Harry. Belinda has a group term insurance policy from her employer with a face amount of $85,500. By choosing a group life insur- ance plan from his menu of employee benefits, Harry now has $39,000 of group term life insurance. Harry and Belinda have decided that, because they have no children, they could reduce their life insurance needs by protecting one another's income for only four years, (b) Based on your response to the previous question. assuming the survivor would be able to fend for him- self or herself after that time. They also realize that their savings fund is so low that it would have no bearing on short-term debts. (a) Should the $3000 interest carnings from Harry's trust fund be included in his annual income for the purposes of calculating the likely dollar loss if he were to die? (See the discussions about the Johnsons in Chapter 3 beginning on page 86.) Explain your response. how much more life insurance does Harry need Use the Run the Numbers worksheet on page 353 to arrive at your