Steve Buckner, 45, is an electrician. For the past 10 years, he has successfully operated his own business. Steves income from the business is $400,000 per year. Steves wife, Susan, is 36 and was a banking adviser for 10 years. There are two children: Julie, aged 5, and Peter, aged 7. It is Steves and Susans desire that their children have the opportunity to go to university after attending high school. They estimate that schooling will last from age 13 to 25. To provide for this, they estimate that $70,000 should be set aside for both children. The children would be dependent until they turn 25 so, the Buckner family wish to set aside $400 per child per month to meet their personal needs.

Susans mother, Bella, is living with the family. She is 68 and receives a small pension that covers her incidental expenses. Steve and Susan meet her other expenses, which amount to $350 per month. The familys basic living expenses are $2,000 per month excluding mortgage and other loan payments. Each parent spends additional $500 per month for personal expenses.

In addition, in the event of Susan dying, Steve wishes to have available additional funds of $500 for both children per month (i.e. $300 pm for each child) for assistance in managing the household. This means that Julie would need care for 8 years and Peter for 6 years. However, if Peter were to die prematurely, Susan would need sufficient funds to payout debts and other expenses and maintain living expenses.

The Buckners own their own house which has a value of $750,000 and a mortgage of $350,000. Credit cards and personal loans amount to $25,000. It has been agreed that, in the event of Susans death, Steves income will be sufficient to meet the familys needs (including Bellas expenses), though debts, would need to be paid out and other lump sum amounts met including childrens all costs.

The life expectancy is to be taken as 80 for males and 85 for females.

There is a self-funded superannuation plan which will provide sufficient income from age 65 for either or both the Buckners. There is in force a policy on Steves life for $450,000 and $155,000 on Susans. Funeral and associated costs are expected to amount to $15,000, and final medical expenses will amount to $25,000. Legal and estate costs are anticipated to be $5,000. Additionally, they believe they would need emergency funds of $25,000 at the time of either Steve or Susans death.

Required: From the information provided, calculate the amount of cover necessary if separate life covers were to be effected for Steve and Susan. (Ignore the present value of an annuity formula)