The present value of the insurance benefits that could provide $40,000 over the next 15 years for the Sampson family. Assume that the insurance payment could be invested to earn 6% interest over time.

Annual Amount	$40,000
Number of Years	15
Annual Interest Rate	6%
Present Value	$388,489.96

1) Considering the insurance benefits needed to provide $40,000 over the next 15 years, plus the additional $330,000 of insurance coverage, what amount of insurance coverage is needed?

2) Given the total amount of insurance coverage needed and Dave's present age (30 years old),e stimate the premium that the Sampsons would pay using an insurance Web site (such as www.insure.com or in the finance section of Yahoo.com, search for "insurance quotes").

3) Dave Sampson is a social smoker. Because he only smokes occasionally, he would like to omit this information from his life insurance application. Advise Dave on this course of action.

THE SAMPSONS-A Continuing Case The Sampsons have one remaining insurance need life insurance. They have decided to purchase term life insurance. They want a life insurance policy that will provide for the family in the event of Dave's death, since he is the major breadwinner. The Sampsons do not know how much insurance to purchase, but their goal is to have enough money for general expenses over the next 15 years. Recall that Dave's salary after taxes is about S40,000. He wants to ensure that the family would have insurance benefits that could provide $40,000 for the next 15 years. By the end of this period, the children would have completed college. Dave also wants to add an additional $330,000 of insurance coverage to provide support for Sharon through her retirement years, since they have not saved much money for retirement. Go to the worksheets at the end of chapter, and to the CD-ROM accompanying this this text, to continue this case