# Risk management

John, age 30, and Mary, age 28, are married and have a son, age 3. Mary does not have a job and has no plan to work outside. John has the following income needs:

(a) 1-year Readjusted period $3000/month

(b) Dependency period $2500/month.

(c) Blackout period $1000/month.

Suppose Social Security benefits for the family are $1000 monthly paid until the child reaches age 18.

i) What is the total income needs during the readjustment period and dependency period?

ii) What is the total income needs during the blackout period?