Imagine that you are a financial planner and your new clients came to you with the information presented below. After reviewing and analyzing the data, please come up with a life insurance needs analysis. Draft a letter to your new clients regarding the shortfalls you see in their insurance coverage and provide recommendations to better insure them in the event of an untimely death, including how much additional coverage each spouse would need and what method(s) were used to calculate those amounts. The letter should detail the specific life insurance needs of both Bob and Rachel to provide for supplemental income for the surviving spouse to be able to continue life without any financial interruptions. The letter should be close to one page in length with any necessary calculation details included in that page. Bob, 38, works as an IT professional. He earns $120,000 per year ($85,000 after taxes). One of the benefits offered by Bobs employee is a term life insurance policy worth 1.5 times each employees annual salary. Bobs wife, Rachel, 36, owns and operates a home-based, incorporated business in interior design. She earns an after-tax income of $90,000 per year. Rachel mainly sells her services online and at trade shows. She also has an office in her basement for client meetings. The couple has a $150,000 mortgage, with fifteen years remaining on the loan. The couple plans to apply their mortgage payments to their retirement savings once the loan is paid off. The couple has six-year-old twins, Bert and Noelle. At birth, the couple set up a whole life insurance policy worth $200,000 on each of their lives, paid up to age 65. According to their insurance agent, it would build up a cash surrender value that could be used for emergency purposes, or to supplement their incomes in retirement. Should Bob or Rachel die prematurely, the survivor would need to maintain the family income to continue funding important plans, such as Registered Education Savings Plans (RESPs) and Registered Retirement Savings Plans (RRSPs). The survivor would also want to consider taking a one-year leave of absence under the circumstances. Such income will be required until Bob is 65. Any insurance proceeds could be invested in a balanced portfolio (50-50 split between equities and fixed income) at an expected return rate of 3.5 percent after fees. Expected average inflation in the future is 2 percent. The couple lacks emergency savings. Rachel and Bob own cars in their personal names, however Rachel utilizes hers mostly for business purposes. They would like to know where their risks lie, and learn about potential solutions.