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 $29,000 annually from a part-time home-based business. Daniella's annual salary is $58,000. From their income, they save $7,500 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 $61,972. 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 $5,000 annually in pension benefits until Jorge turns 80 . Jorge projects his gross annual income to be $40,000 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 $28,000 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. b. Should Jorge puechase an insurance policy? Why or why not? If so. What type of policy would you recommend for Wendy? (Select the best cheice below.) househoid senices and child care that would likely have to be replaced with paid help if he were to die. Funds need to be avalable to help Daniella cover this potential expense. Term insurance would provide pure insurance protection for Jorge at a relatively lew ess! However, Jorge undeubredly provides numerous household senices and child care that would Ikely have to be replaced weth paid belp if he were to bie. Dariella would need to gut a faise to cover this potential expense. Term insurance would provide pure insurance protection for Jorge at a relatively low cost. de. Sexend. Jorge undoubredly provides numeross housthold senices and child care that would likely have to be replaced with paid help if he ware to die. Funds eqed to be avalable to help Daniella cover this potential expense. Term insurance would provide pure insurance protection for Jorge at a relatively low cost. sover this potential expense. Term insurance would provide pure insurance protection for Jorge at a telatively low cost. c. What type of life insurance policy would you recommend that Dariela purchase? (Select the best choice below.) she needs to find an affordable policy. needs to find an aflondable policy. she needs to find an afordable policy. she nesds to find an aftordable policy. d. What would hapeen to Daniella's group lfe insurance if she leaves her present job? (Select the best cheice below) insurance protection. acid the greater risk of death occurring with no life insurance protection. money than necessary. e. What could happen to the Martinezes" children 7 Daniells or Jorge should die without adequate lee insurance coverage? (Select the best choice below) ( 0.9 . a college education). This could cause a drop in the childen's standard of living. (e.g. a college education). This would improve the children's standard of living. for in full through Social Security Survivors' Benefits. This could cause a drop in the children's standard of living. until they went to college. 1. Should the Martinezes namo the children as lidp insurance beneficianies? (Select the best choice belowe) A. Wo. Minor children generally cannot be paid lfe insurance proceeds drectly. The policy should be set up to provide income to whower will raise the children in the event of premature death, either the suniving speuse of guardian[s] for the childen. D. Yes. Minse children generally can be paid libe insurance procteds directly. The policy should be set up to provide the same amount of income to each of the children. 9. Which lite insuraned riders might the Martinezes select when purchasing a policy? Lfe insurance riders the Martinezes might select when purchasing a policy are: (Select all the choices that apply.) A. a lump-sum settlement nidet. B. a cost of living adjustment (COLA) nider. C. a change of policy bder D. a waver of premium for disability nidec. E. a living benefits nider. F. a guasanteed insurability ribet. reesucate themselves for lfe insurance shopping? (Select the best choice below.) A. Given that the chidren provide income, life insuranse would be eecessary. The primary steds are adecuase inceme replacement in the twent of aty family members beath. enough to the household income to warrant insuring them. dessnt hurt to have insurance on the chidren. 9. Mind Games, Your Financial Personality, and Your Money affect their decision to purchase lfe insurance? (Select the best choice below.) term insurance would provide immediate protection. The savings, albeit important, will accumulate a sufficient balance to protect the family in case of premature death. goals than contributing to Daniella's 401(k) plan, because the 401(K) plan money would not be given to the family in case of Daniella's premature death. may agres that the mental account of savings is a more important goal and that thoy are young and do not need to be concerned with premature death. 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 $29,000 annually from a part-time home-based business. Daniella's annual salary is $58,000. From their income, they save $7,500 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 $61,972. 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 $5,000 annually in pension benefits until Jorge turns 80 . Jorge projects his gross annual income to be $40,000 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 $28,000 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. b. Should Jorge puechase an insurance policy? Why or why not? If so. What type of policy would you recommend for Wendy? (Select the best cheice below.) househoid senices and child care that would likely have to be replaced with paid help if he were to die. Funds need to be avalable to help Daniella cover this potential expense. Term insurance would provide pure insurance protection for Jorge at a relatively lew ess! However, Jorge undeubredly provides numerous household senices and child care that would Ikely have to be replaced weth paid belp if he were to bie. Dariella would need to gut a faise to cover this potential expense. Term insurance would provide pure insurance protection for Jorge at a relatively low cost. de. Sexend. Jorge undoubredly provides numeross housthold senices and child care that would likely have to be replaced with paid help if he ware to die. Funds eqed to be avalable to help Daniella cover this potential expense. Term insurance would provide pure insurance protection for Jorge at a relatively low cost. sover this potential expense. Term insurance would provide pure insurance protection for Jorge at a telatively low cost. c. What type of life insurance policy would you recommend that Dariela purchase? (Select the best choice below.) she needs to find an affordable policy. needs to find an aflondable policy. she needs to find an afordable policy. she nesds to find an aftordable policy. d. What would hapeen to Daniella's group lfe insurance if she leaves her present job? (Select the best cheice below) insurance protection. acid the greater risk of death occurring with no life insurance protection. money than necessary. e. What could happen to the Martinezes" children 7 Daniells or Jorge should die without adequate lee insurance coverage? (Select the best choice below) ( 0.9 . a college education). This could cause a drop in the childen's standard of living. (e.g. a college education). This would improve the children's standard of living. for in full through Social Security Survivors' Benefits. This could cause a drop in the children's standard of living. until they went to college. 1. Should the Martinezes namo the children as lidp insurance beneficianies? (Select the best choice belowe) A. Wo. Minor children generally cannot be paid lfe insurance proceeds drectly. The policy should be set up to provide income to whower will raise the children in the event of premature death, either the suniving speuse of guardian[s] for the childen. D. Yes. Minse children generally can be paid libe insurance procteds directly. The policy should be set up to provide the same amount of income to each of the children. 9. Which lite insuraned riders might the Martinezes select when purchasing a policy? Lfe insurance riders the Martinezes might select when purchasing a policy are: (Select all the choices that apply.) A. a lump-sum settlement nidet. B. a cost of living adjustment (COLA) nider. C. a change of policy bder D. a waver of premium for disability nidec. E. a living benefits nider. F. a guasanteed insurability ribet. reesucate themselves for lfe insurance shopping? (Select the best choice below.) A. Given that the chidren provide income, life insuranse would be eecessary. The primary steds are adecuase inceme replacement in the twent of aty family members beath. enough to the household income to warrant insuring them. dessnt hurt to have insurance on the chidren. 9. Mind Games, Your Financial Personality, and Your Money affect their decision to purchase lfe insurance? (Select the best choice below.) term insurance would provide immediate protection. The savings, albeit important, will accumulate a sufficient balance to protect the family in case of premature death. goals than contributing to Daniella's 401(k) plan, because the 401(K) plan money would not be given to the family in case of Daniella's premature death. may agres that the mental account of savings is a more important goal and that thoy are young and do not need to be concerned with premature death