Question
Insurance Needs Analysis : Bob and Sally have three children and called you to review their life insurance needs, Based on the information below, calculated
Insurance Needs Analysis :
Bob and Sally have three children and called you to review their life insurance needs, Based on the information below, calculated the amount of life insurance Bob requires.
Sallys After-tax income (last calendar year) $45,000
Bobs After- tax income (last calendar year) $55,000
Joint Investment $150,000
Sallys RRSPs $70,000
Bobs RRSPs $65,000
Bobs Vehicle $50,000
Sallys Vehicle $35,000
Primary Residence $1 Million
Cash $35,000
Mortgage $485,000
Jewelry $45,000
Antiques $30,000
Line of Credit (loan) $55,000
Credit Cards $20,000
Personal loans (cars, etc.) $45,000
Education Costs $115,000
Funeral Costs each $20,000
Continuing household expenses $60,000
They are beneficiaries of each others RRSPs
They would not liquidate the investment portfolio which generates $5,000 annually
Investment rate are at 6%.
Inflation is 2.5%
Tax rate on investments is 20%
The antiques and jewellery would not be liquidated upon the death of one.
They would sell Sallys vehicle in the event of either of their deaths
They would like the calculation based on a 20-year period.
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