QUESTION 2

1. Zanele (45) and Kabelo (47) have been married for 10 years and they have two children. Kabelo would like to make sure that Zanele is financially secure in the event of his death.
2. Assumptions atKabelo's death:

• He would like to provide for his family until his wife is 75 years old by taking out a life policy.
• The monthly income that will be required at his death is 75% of the family's living expenses.
• He has an ABSA money market investment with a current value of R500 000 that should
• be taken into account to supplementhis family'sincome requirements.
• The annual inflation rate is 6.5%.
• The annual investment growth rate is 10.75%.
• Thefamily'scurrent total monthly living expenses are R40 000.

REQUIRED:

Calculate the estimated life cover amount that will be required atKabelo'sdeath.