Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Definitive Guide To Blockchain For Accounting And Business

Authors: Saurav K. Dutta

1st Edition

1789738687, 9781789738681

More Books

Students also viewed these Accounting questions

Question

What was the influence of the strength of the treatment?

Answered: 1 week ago