Jonathan Woo who is $45$ years old works at T&T enterprises. He earns an annual before tax income of

$$60,000.$ If he dies his company pension and government benefits would pay his wife and children

$$20,000$ per year. His wife Jessica, $40,$ works part time and earns before tax income of $$30,000$ per

year. Since Jessica does all the house work, if she dies, the family would need an additional $$20,000$ a

year to cover the homemaking services she currently provides for the family. The family wants to buy

enough life insurance so that in the event of premature death, the remaining family members will not

suffer any income loss. How much life insurance does the family need? Use the premium quotations in

the attached table to determine the cost of life insurance?

Assumptions: $-$ Real rate of return is $3\%$

$-$ Rule of thumb tax adjustment is $75\%$

$-$ Both plan to work till age $65$

$-$ Both are nonsmokers in excellent health

$-$ They will purchase $20$ year term policy

$-$ Family expenses will go down by $$10,000$ if Jonathan dies.

$-$ Jonathan$$s marginal tax rate is $33\%$

$-$ Jssica$$s marginal tax rate is $20\%$