Insurance Needs Assessment Problem

Jim and Janice are conducting an insurance needs assessment. They have expressed the following goals for things they would like taken care of in the event of premature death $($for simplicity annual compounding in all TVM calculations$)$:

They have an outstanding balance on their home mortgage of $$145,000$

They have outstanding auto loans of $$10,000$

The have outstanding consumer debt of $$7,500$

A funeral in keeping with their wishes would cost approximately $$10,000.$

They want to provide a $$1,000$ fund to cover final medical expenses.

They want to provide $$5,000$ to cover the costs of probating the estates.

Jim is currently $34$ years old, and Janice is currently $32$ years old. They each earn $$48,000$ per year after taxes from their respective jobs and manage to save $$10,000$ per year. Jim and Janice have $2$ children ages $8$ and $10.$

For the period until the younger child graduates high school, the surviving spouse will need a household income equal to $90\%$ of their current expenditures in current dollars.

For the period from when the younger child graduates college for the rest of their life, the surviving spouse will require a household income $$67,200.$

Jim and Janice both plan to retire at age $67$ when they will be qualified for full Social security benefits which they estimate will be $$18,000$ each per year. When Janice retires, her pension from work is expected to provide an annual benefit of $$40,000$ after taxes. When Jim retires, his pension from work is expected to provide an annual benefit of $$38,000.$

Jim has a life expectancy to age $82.$ Janice has a life expectancy to age $85$

They expect a SSA dependency benefit of $$12,000$ per year during the period of longest dependency $($until the younger child graduates high school$).$

They would like to make sure that the necessary funds are available to provide for the education of their children. The following information is relevant:

The current cost of four years of college is estimated to be $$48,000$ and is expected to increase at an annual rate of $5\%.$

The following information is necessary for the analysis as well:

Jim and Janice believe that they can invest at a consistent long term before tax rate of return of $12\%$ and that the general inflation rate will be $2\mathrm{.}5\%.$

They are in the $25\%$ tax bracket.

Jim and Janice currently have an investment account valued at $$85,000.$

They each have group life policy at work for $$96,000.$

Jim has an individual universal life policy with a $$95,000$ death benefit. Janice has no additional insurance

Jim has a $401($k$)$ account at work in which he is fully vested valued at $$185,000.$ Janice has a $401($k$)$ account in which she is fully vested valued at $$100,000.$

Determine the insurance needs, if any, that Jim and Janice have.