Surprise! Jamie Lee and Ross were stunned to find that their family of two has grown to a family of five! They were expecting twins, but when the babies were born, they discovered that they were actually the parents of triplets!

Ross immediately had worries of being able to provide for the growing family: diapers, formula, college expenses times three! What if something happened to him or Jamie Lee? How would the surviving parent be able to provide for such a large family?

Jamie Lee and Ross decided to purchase life insurance for Ross because his is the higher income at this time and because it would be more devastating if his income was lost due to his death. They have allowed $8,000.00 for funeral costs.

Calculate their living expenses for 6 months to include all monthly expenses, excluding credit card debt and entertainment. Note that Rosss mother lives close and will be providing childcare to their triplets once Jamie Lee goes back to work at the bakery for half days. His mom will have a hired nanny to assist, which will cost them $1,200 a month. Use the table below to determine the amount Jamie Lee and Ross should use when shopping for life insurance. Each answer must have a value for the assignment to be complete. Enter "0" for any unused categories.

Current Financial Situation

Assets:			Income:
Checking account	$2,500		Gross income (Jamie Lee)	$45,000
Savings account	$16,000		Net income after taxes (Jamie Lee)	$31,500
Emergency fund savings account	$19,100		Gross income (Ross)	$73,000
IRA balance	$25,000		Net income after taxes (Ross)	$60,800
Car (Jamie Lee)	$11,500		Monthly Expenses:
Car (Ross)	$19,000		Mortgage	$1,225
Liabilities:			Property taxes	$400
Student loan balance	$0		Homeowners insurance	$200
Credit card balance	$3,500		Utilities	$160
Car loans	$7,000		Food	$500
			Gas/maintenance	$275
			Credit card payment	$275
			Car loan payment	$289
			Entertainment	$125

Use the "family need" method to complete 1. Yearly income 5 [1] 2. Total approximate expenses above and beyond your daily living costs for you and your dependents (e.g. tutition, care [2] for disabled child or parent) 3. Emergency fund needed ( 6 months of living expenses) [3] 4. Expected funeral expenses [4] 5. Total estimate of family's financial needs (sum of lines 1- 4) [5] 6. Total liquid assets (e.g. savings account, CDs, money market funds, other life insurance, pension plan death [6] benefits, and Social Security benefits) 7. Life insurance needs (total estimate of needs minus liquid assets) [7]