Grayson and Aubrey Reed are a two-income couple in their early 30s. They have two children, ages 6 and 3. Grayson's monthly take-home pay is $3,600, and Aubrey's is $4,200. The Reeds feel

that, because they're a two-income family, they both should have adequate life insurance coverage. Accordingly, they are now trying to decide how much life insurance each one of them needs. To begin with, they'd like to set up an education fund for their children in the amount of $120,000 to provide college funds of $15,000 a year - in today's dollars - for four years for each child. Moreover, if either spouse should die, they want the surviving spouse to have the funds to pay off all outstanding debts, including the $210,000 mortgage on their house. They estimate that they

have $25,000 in consumer installment loans and credit cards. They also project that if either of them dies, the other probably will be left with about $10,000 in final estate and burial expenses.

Regarding their annual income needs, Grayson and Aubrey both feel strongly that each should have enough insurance to replace her or his respective current income level until the younger child

turns 18 (a period of 15 years). Although neither Grayson nor Aubrey would be eligible for Social Security survivor's benefits because they both intend to continue working, both children would

qualify in the (combined) amount of around $1,800 a month. The Reeds have accumulated about $75,000 in investments, and they have a decreasing term life policy on each other in the amount of $100,000 (paid at the death of the insured), which could be used to partially pay off the mortgage. Grayson also has an $80,000 group life insurance policy at work and Aubrey a $100,000 group life insurance policy.

1. Assume that Grayson's gross annual income is $60,000 and Aubrey's is $64,000. Their insurance agent has given them a multiple earnings table showing that the earnings multiple to replace 75 percent of their lost earnings is 8.3 for Grayson and 7.6 for Aubrey. Use this approach to find the amount of life insurance each should have if they want to replace 75 percent of their lost earnings.

Life insurance needed by Grayson:

Life insurance needed by Aubrey:

2. Use Worksheet 8.1 to find the additional insurance needed on both Grayson's and Aubrey's lives. (Because Grayson and Aubrey hold secure, well-paying jobs, both agree that they won't need any additional help once the kids are grown; both also agree that they'll have plenty of income from Social Security and company pension benefits to take care of themselves in retirement. Thus, when preparing the worksheet, assume "funding needs" of zero in Periods 2 and 3.)

Additional insurance needed by Grayson:

Additional insurance needed by Aubrey:

ebook Chapter Critical Thinking Case 2 The Reeds Want to know: How Huch Is Enough? Grayson and Aubrey Reed are a two-income couple in their early 30s. They have two children ages and Grayson's monthly take home pas 53,600, and Aubrey's $4,200. The Reeds feel that, because they're a two-income family. they both should have adequate life insurance coverage. Accordingly, they are now trying to elde how much face each one of the needs To begin with they'd like to an education and for the children in the amount of $120,000 to provide college funds of $15.000 Year in today dollars for four years for each child Moreover, if either spouse should die, they want the surviving spouse to have the funds to pay off outstanding debts, ududing the 210,000 motor on the house. They estimate that they have $25,000 in consumer instalment loans and credit cards. They also project that if either of the des, the the probably will be left with about $19.000 in final estate and burial expenses Regarding their annual income needs, Grayson and Aubrey both feel strongly that each should have enough insurance to replace het op het respective content income event the younger child turne 10 ( period of 15 years). Although the Grayson nor Autrey would be digible for Social Security survivor's benefits because they both intend to continue working, both children would quality in the combined) amore of around $1,800 a month. The Reeds have accumulated about $75,000 s Investments, and they have a greasing terme policy on each other in the amount of $100.000 (paid at the death of the insured), which could be ined to partially pay off the mortgage rationale has 500.000 groupe Insurance policy at work and Aubrey a $100,000 group life insurance policy. 1. Assume that Grayson gross annual income is $60,000 and Aubrey's is $6,000. Therintage has given them multilerine table shows that the coming multiple to replace 75 percent of their fosteannig is 8.3 for Grayson and 7.6 for Aubrey. Use this approach to find the amount of March have they want to replace 75 percent the last earnings Life instance eded by Grayson $ Life Insurance needed by Aubrey 2. Use Worksheet at to find the additional insurance needed on both Grayson's and Aubrey's lives. (Bechise Grayson and Aubrey hold secure, we both gree that they won't need any additional help once the kids are grown both also agree that they have plenty of income from sodal Security and company to benefits to care of themselves in retirement. Thus, when preparing the worksheet, assume funding needs of or in periods 2 and 3) Additional insurance needed by Grayson Additional insurance needed by Autre $ 3. Is there are in your answers to Cuestions and 27, why? Which nombor do you think is more indicative of the Reds life cene in the amounts computed in med what kind of being Expert Q&A Done Grayson and Aubrey Reed are a two-income couple in their early 30s. They have two children, ages 6 and 3. Grayson's monthly take-home pay is $3,600, and Aubrey's is $4,200. The Reeds feel that, because they're a two-income family, they both should have adequate life insurance coverage. Accordingly, they are now trying to decide how much life insurance each one of them needs. To begin with, they'd like to set up an education fund for their children in the amount of $120,000 to provide college funds of $15,000 a year - in today's dollars - for four years for each child. Moreover, if either spouse should die, they want the surviving spouse to have the funds to pay off all outstanding debts, including the $210,000 mortgage on their house. They estimate that they have $25,000 in consumer installment loans and credit cards. They also project that if either of them dies, the other probably will be left with about $10,000 in final estate and burial expenses. Regarding their annual income needs, Grayson and Aubrey both feel strongly that each should have enough insurance to replace her or his respective current income level until the younger child turns 18 (a period of 15 years). Although neither Grayson nor Aubrey would be eligible for Social Security survivor's benefits because they both intend to continue working, both children would qualify in the combined) amount of around $1,800 a month. The Reeds have accumulated about $75,000 in investments, and they have a decreasing term life policy on each other in the amount of $100,000 (paid at the death of the insured), which could be used to partially pay off the mortgage. Grayson also has an $80,000 group life insurance policy at work and Aubrey a $100,000 group life insurance policy. Expert Q&A Done turns 18 (a period of 15 years). Although neither Grayson nor Aubrey would be eligible for Social Security survivor's benefits because they both intend to continue working, both children would qualify in the combined) amount of around $1,800 a month. The Reeds have accumulated about $75,000 in investments, and they have a decreasing term life policy on each other in the amount of $100,000 (paid at the death of the insured), which could be used to partially pay off the mortgage. Grayson also has an $80,000 group life insurance policy at work and Aubrey a $100,000 group life insurance policy. 1. Assume that Grayson's gross annual income is $60,000 and Aubrey's is $64,000. Their insurance agent has given them a multiple earnings table showing that the earnings multiple to replace 75 percent of their lost earnings is 8.3 for Grayson and 7.6 for Aubrey. Use this approach to find the amount of life insurance each should have if they want to replace 75 percent of their lost earnings. Life insurance needed by Grayson: Life insurance needed by Aubrey: 2. Use Worksheet 8.1 to find the additional insurance needed on both Grayson's and Aubrey's lives. (Because Grayson and Aubrey hold secure, well- paying jobs, both agree that they won't need any additional help once the kids are grown; both also agree that they'll have plenty of income from Social Security and company pension benefits to take care of themselves in retirement. Thus, when preparing the worksheet, assume "funding needs of zero in Periods 2 and 3.) Additional insurance needed by Grayson: Additional insurance needed by Aubrey: ebook Chapter Critical Thinking Case 2 The Reeds Want to know: How Huch Is Enough? Grayson and Aubrey Reed are a two-income couple in their early 30s. They have two children ages and Grayson's monthly take home pas 53,600, and Aubrey's $4,200. The Reeds feel that, because they're a two-income family. they both should have adequate life insurance coverage. Accordingly, they are now trying to elde how much face each one of the needs To begin with they'd like to an education and for the children in the amount of $120,000 to provide college funds of $15.000 Year in today dollars for four years for each child Moreover, if either spouse should die, they want the surviving spouse to have the funds to pay off outstanding debts, ududing the 210,000 motor on the house. They estimate that they have $25,000 in consumer instalment loans and credit cards. They also project that if either of the des, the the probably will be left with about $19.000 in final estate and burial expenses Regarding their annual income needs, Grayson and Aubrey both feel strongly that each should have enough insurance to replace het op het respective content income event the younger child turne 10 ( period of 15 years). Although the Grayson nor Autrey would be digible for Social Security survivor's benefits because they both intend to continue working, both children would quality in the combined) amore of around $1,800 a month. The Reeds have accumulated about $75,000 s Investments, and they have a greasing terme policy on each other in the amount of $100.000 (paid at the death of the insured), which could be ined to partially pay off the mortgage rationale has 500.000 groupe Insurance policy at work and Aubrey a $100,000 group life insurance policy. 1. Assume that Grayson gross annual income is $60,000 and Aubrey's is $6,000. Therintage has given them multilerine table shows that the coming multiple to replace 75 percent of their fosteannig is 8.3 for Grayson and 7.6 for Aubrey. Use this approach to find the amount of March have they want to replace 75 percent the last earnings Life instance eded by Grayson $ Life Insurance needed by Aubrey 2. Use Worksheet at to find the additional insurance needed on both Grayson's and Aubrey's lives. (Bechise Grayson and Aubrey hold secure, we both gree that they won't need any additional help once the kids are grown both also agree that they have plenty of income from sodal Security and company to benefits to care of themselves in retirement. Thus, when preparing the worksheet, assume funding needs of or in periods 2 and 3) Additional insurance needed by Grayson Additional insurance needed by Autre $ 3. Is there are in your answers to Cuestions and 27, why? Which nombor do you think is more indicative of the Reds life cene in the amounts computed in med what kind of being Expert Q&A Done Grayson and Aubrey Reed are a two-income couple in their early 30s. They have two children, ages 6 and 3. Grayson's monthly take-home pay is $3,600, and Aubrey's is $4,200. The Reeds feel that, because they're a two-income family, they both should have adequate life insurance coverage. Accordingly, they are now trying to decide how much life insurance each one of them needs. To begin with, they'd like to set up an education fund for their children in the amount of $120,000 to provide college funds of $15,000 a year - in today's dollars - for four years for each child. Moreover, if either spouse should die, they want the surviving spouse to have the funds to pay off all outstanding debts, including the $210,000 mortgage on their house. They estimate that they have $25,000 in consumer installment loans and credit cards. They also project that if either of them dies, the other probably will be left with about $10,000 in final estate and burial expenses. Regarding their annual income needs, Grayson and Aubrey both feel strongly that each should have enough insurance to replace her or his respective current income level until the younger child turns 18 (a period of 15 years). Although neither Grayson nor Aubrey would be eligible for Social Security survivor's benefits because they both intend to continue working, both children would qualify in the combined) amount of around $1,800 a month. The Reeds have accumulated about $75,000 in investments, and they have a decreasing term life policy on each other in the amount of $100,000 (paid at the death of the insured), which could be used to partially pay off the mortgage. Grayson also has an $80,000 group life insurance policy at work and Aubrey a $100,000 group life insurance policy. Expert Q&A Done turns 18 (a period of 15 years). Although neither Grayson nor Aubrey would be eligible for Social Security survivor's benefits because they both intend to continue working, both children would qualify in the combined) amount of around $1,800 a month. The Reeds have accumulated about $75,000 in investments, and they have a decreasing term life policy on each other in the amount of $100,000 (paid at the death of the insured), which could be used to partially pay off the mortgage. Grayson also has an $80,000 group life insurance policy at work and Aubrey a $100,000 group life insurance policy. 1. Assume that Grayson's gross annual income is $60,000 and Aubrey's is $64,000. Their insurance agent has given them a multiple earnings table showing that the earnings multiple to replace 75 percent of their lost earnings is 8.3 for Grayson and 7.6 for Aubrey. Use this approach to find the amount of life insurance each should have if they want to replace 75 percent of their lost earnings. Life insurance needed by Grayson: Life insurance needed by Aubrey: 2. Use Worksheet 8.1 to find the additional insurance needed on both Grayson's and Aubrey's lives. (Because Grayson and Aubrey hold secure, well- paying jobs, both agree that they won't need any additional help once the kids are grown; both also agree that they'll have plenty of income from Social Security and company pension benefits to take care of themselves in retirement. Thus, when preparing the worksheet, assume "funding needs of zero in Periods 2 and 3.) Additional insurance needed by Grayson: Additional insurance needed by Aubrey