Jorge and Daniella Martinez, $30$ and $35,$ are considering the purchase of life insurance. Jorge doesn't have any coverage, whereas Daniella has a $$148,000$ group policy at work. The Martinez have two young children, ages $3$ and $5.$ Jorge earns $$26,000$ annually from a part$-$time home$-$based business. Daniella's annual salary is $$56,000.$ From their income, they save $$7,700$ a year. The rest goes for expenses. The couple estimates that the children will be financially dependent, except for college costs, for about another $15$ years. Once the children are in college, Jorge assumes their annual expenses will be $$59,539.$

In preparation for a visit with their insurance agent, the Martinezes have estimated the following expenses if Daniella were to die: $.$

They also anticipate, should Daniella die, Jorge will receive $$7,900$ a year in Social Security survivor's benefits until the youngest child turns $18$ and $$4,950$ annually in pension benefits until Jorge turns $80.$ Jorge projects his gross annual income to be $$41,000$ after his business expansion. Once the children are self$-$supporting, Jorge wants to plan a spousal life income$-$that is$,$ funds to make up the difference between his income and pension benefits and his expenses$-$for $15$ more years, from age $45$ to $60.$ Lastly, he wants to plan on $$30,000$ a year in retirement income for another $20$ years, from age $60$ to $80.$ He anticipates receiving a $5$ percent after$-$tax, after$-$inflation return on their investments.

To date, the Martinezes have accumulated a total of $$124,000$ of assets, not including $$46,000$ of home equity. Their assets include $$10,000$ in an emergency fund, $$12,000$ in IRA funds for Jorge, $$50,000$ in other investments, and $$52,000$ in Daniella's $$01(k)$ plan through her employer.

a$.$ What method should the Martinezes use to determine how muck insurance they need?

b$.$ Should Jorge purchase an insurance policy? Why or why not? If so$,$ what type of policy would you recommend for Jorge?

a$.$ What method should the Martinezes use to determine how much insurance they need?

In Step $1$ of estimating their life insurance needs, the amount that the Martinezes estimate will be needed for immediate needs, should Daniella die, is $ $($Type a whole number.$)$

In Step $2,$ the amount that the Martinezes estimate will be needed to eliminate debt is $$.($Type a whole number.$)$

In Step $3,$ the amount that the Martinezes estimate will be needed for immediate transitional funds is $!.($Type a whole number.$)$

In step $4,$ dependency expenses, the current household expenses are: $.($Round to the nearest dollar.$)$

For the Martinezes, the deceased's expenses would be $$,($Round to the nearest dollar.$)$

The spousal income, or Jorge's projected income after his business expansion, is $$,($Type a whole number.$)$

The amount anticipated from Social Security Survivors' Benefits is $ $($Type a whole number.$)$

Hint: Assume the same amount will be received from Social Security until the youngest child turns $18$ years old.

The amount anticipated from pension benefits is & $($Type a whole number.$)$