Tarek and Samantha are thinking about starting a family. In preparation for this new phase of their life, they visited a local hospital to learn about the costs of delivery and care. They learned that the average cost for a normal birth is $$8,000.$ This took Tarek$$s breath away, until he remembered his employer$-$provided health insurance coverage, under which he and Samantha are covered. The plan features are as follows:

$$500$ per person deductible.

$20\%$ coinsurance.

$$2,500$ out$-$of$-$pocket yearly maximum.

Instructions

Based on the hospital$$s estimate and their health insurance policy, how much will Tarek and Samantha pay if Samantha gives birth in early January $($the beginning of a new insurance year$)?$ How much will the insurance company pay?

Since we last checked in with Tarek, he received a promotion and raise at work. His new annual income is $$49,000.$ Given his new promotion and the fact that he and Samantha are thinking of starting a family, he is considering buying a disability policy. Because his employer does not provide this as an employee benefit, he needs to buy a policy in the open market. How much replacement income should a policy provide? How much might this type of policy cost per year?

As a hopeful new mother, Samantha is anxious to make sure that, as a family, their financial house is in order. She is thinking about buying a life insurance policy. Right now, she has $$50,000$ in coverage from her employer. Based on the estimation procedure presented in the chapter, how much additional coverage should she shop for if her current salary is $$33,000$ per year?

What type of life insurance policy should Samantha consider if she would like to have a guaranteed cash value that she can eventually use to help pay for her child$$s college education? What$$s a potential disadvantage associated with this type of policy?

What should Tarek and Samantha do if they are most interested in buying the maximum amount of life insurance possible, for a period of $30$ years, with the lowest premium? What provisions should they consider adding to newly issued life insurance policies?

Tarek has been collecting sports memorabilia for many years. Right now, his collection is worth only $$750.$ Does he need a personal property rider $($floater$)$ at this time? Let$$s say that he continues to collect and the value of the memorabilia increases to $$3,000.$ Will he need a personal property rider at that time? If yes, approximately how much will the rider cost?