Julian, age 27 has 2 children, ages 4 and 3, from his first marriage. He is now married to Margaret. The children live with their mother, Alice. Julian and Margaret each make $26,000 per year and have recently bought a house for $100,000, with a $95,000 mortgage. They have the following life, health, and disability insurance coverage:

	Policy A	Policy B	Policy C
Insured	Julian	Julian	Margaret
Face Amount	250,000	78,000	20,000
Type	20 year level term	Group term	Group term
Annual Premium	$250	$156	$50
Who pays premium	Trustee	Employer	Employer
Beneficiary	Trustee	Alice	Julian
Policy owner	Trust	Julian	Margaret

Health Insurance: Julian and Margaret are covered under Julians employer plan, which is a Preferred Physicians Plan (PPO) with a $500 in network deductible per person per year co-insurance clause with a family annual out of pocket maximum of $2,500 and an out of network 60/40 coinsurance clause with a family out of pocket maximum of $4,500.

Long Term Disability Insurance: Julian is covered by an own occupation policy, with premiums paid by the employer. The benefit equals 60% of his gross pay after a 180 day elimination period. The policy covers both sickness and accidents. The benefit period is 5 years (60 months). Margaret is not covered by disability income insurance.

Assume Julian dies. Who would receive the proceeds of the life insurance policies?

Does Julian have adequate life insurance?

Is Julians health and disability coverage adequate? If not, why not?

Should Margaret have disability income insurance? Why or why not?

Are any of the premiums or benefits received from the life, health, or disability income insurance taxable to Julian and Margaret?