The Johnsons Change Their Life Insurance Coverage Harry and Belinda Johnson spend $20 per month on life insurance in the form of a premium on a $10,000, paid-at-65 cash-value policy on Harry that his parents bought for him years ago. Belinda has a group term i-surance policy from her employer with a face amount of $200,000. By choosing a group life insurance plan from his menu of employee benefits, Harry now has $100,000 of group term life insurance. Harry and Belinda have decided that, because they have no children, they could reduce their life insurance needs by protecting one another's income for only four years, assuming the survivor would be able to fend for himself or herself after that time. They also realize that their savings fund is so low that it would have no bearing on their life insurance needs. Harry and Belinda are basing their calculations on a projected 4 percent rate of return after taxes and inflation. They also estimate the following expenses: $15,000 for final expenses, $20,000 for readjustment expenses,

and $5,000 for repayment of short-term debts.

Requirement:

(a) Should the $3,000 interest earnings from Harry's trust fund be included in his annual income for the purposes of calculating the likely dollar loss if he were to die? (See the discussions about the Johnsons in Chapter 1 beginning on page 34.) Explain your response.

(b) Based on your response to the previous question, how much more life insurance does Harry need? Use the Run the Numbers worksheet on page 366 to arrive at your answer.

(c) Repeat the calculations to arrive at the additional life insurance needed on Belinda's life.

(d) How might the Johnsons most economically meet any additional life insurance needs you have determined they may have?

e) In addition to their life insurance planning, how might the Johnsons begin to prepare for their retirement years?

Determine whether the value is a discrete random variable, continuous random variable, or not a random variable. a. Is the number of fish caught during a fishing tournament a discrete random variable, a continuous random variable, or not a random variable? O A. It is a continuous random variable. O B. It is a discrete random variable O C. It is not a random variable b. Is the number of textbook authors now sitting at a computer a discrete random variable, a continuous random vanable, or not a random variable? O A. It is a continuous random variable O B. It is a discrete random variable O C. It is not a random variable c. Is the ~NR.2 a discrete random variable, a continuous random variable, or not a random variable? O A. It is a continuous random variable, Q B. It is a discrete random variable O C. It is not a random variable\fDetermine whether the value is a discrete random variable, continuous random variable, or not a random variable. a. The distance a baseball travels in the air after being hit b. The amount of snowfall in December in City A c. The gender of college students d. The time it takes to fly from City A to City B a. The number of hits to a website in a day 1. The time required to download a file from the Internet a. Is the distance a baseball travels in the air after being hit a discrete random variable, a continuous random variable, or not a random variable? O A. I is a continuous random variable. O B. It is a discrete random variable, O C. It is not a random variable. a. Is the amount of snowfall in Decomber in City A a discrete random variable, a continuous random variable, or not a random variable? O A. It is a discrete random variable O B. It is a continuous random variable. O C. It is not a random variable c. Is the gender of college students a discrete random variable, a continuous random variable, or not a random variable? O A it is a discrete random variable. O B. Wis a continuous random wirtable. O c. It m not a random variably d. I the time i bikes to fly from City A to City B a discrete random variable, a continuous random variable, or not a random variable? O A. Wish continuous random variable. Is the number of hits to a webuto in a day a Secrete random vosable, a continues variable, or not a cardon variable? Chek to welbel your answer Boynton Later Macbook Air Q W E R T Y U A S caps lock D F G H Z X C V B N