Jon and Kate Alden are 40 years old and have one son, age 10 . Jon is the primary earner, making $65,000 per year. Kate does not currently work. The Aldens have decided to use the needs analysis method to calculate the value of a life insurance policy that would provide for Kate and their son in the event of Jon's death. Jon and Kate estimate that while their son is still living at home, monthly living expenses for Kate and their child will be about $2,900 (in current dollars). After their son leaves for college in 8 years, Kate will need a monthly income of $2,600 until she retires at age 65 . The Aldens estimate Kate's living expenses after 65 will only be $2,000 a month. The life expectancy of a woman Kate's age is 87 years, so the Alden family calculates that Kate will spend about 22 years in retirement. Using this information, complete the first portion of the needs analysis worksheet to estimate their total living expenses. Life Insurance Needs Analysis Worksheet Life Insurance Needs Analysis Worksheet Name of insured Jon and Kate Date Alden 2015 Step 1: Financial resources needed after death 1. Annual living expenses and other needs Total living expenses (add Line 1d$1,336,800 for each period to check your total): In addition to these monthly expenses, other future outlays must be accounted for. Before they had a child, Kate worked as a real estate agent, but her knowledge and skills are now somewhat outdated. Therefore, they include $20,000 for Kate to go back to school. Additionally, Jon and Kate want to create a college fund of $25,000 to fund their child's college education. They estimate that final expenses (funeral costs and estate taxes) will amount to $10,000. Finally, they have taken out a loan for home improvements of $130,000 and an automobile loan of $5,000. They own their home but still have an outstanding mortgage of $300,000. Using this information, complete the next portion of Step 1 to determine the total financial resources needed. 2. Special needs The second half of the needs analysis worksheet is not shown on this page. To complete the worksheet and determine the value of the life insurance policy the Aldens should purchase, they need to factor in additional information. True or False: Kate's annual Social Security benefit should be accounted for in the remaining portion of the form. True False