Tina and Jim Smith are 38 years old and have one son, age 9. Tina is the primary wage earner, making $140,000 per year. Jim does not work. The Smiths have decided to use the needs-based approach to calculate the value of a life insurance policy that would provide for Jim and their son in the event of Tina's death. (10 pts)

Final expenses estimated at $18,000

They want to replace Tinass income until Jim is 65 (27 years)

Before they had their son, Jim was a programmer, but hes lost his knowledge would cost $40,000 to go back to school

Two auto loans of $32,200 (total) and credit card balance of $1200

12 years remaining on their mortgage but they have provided for this payment with Tinas replaced income

Family would qualify for $8200 monthly social security benefits until the son is 18

Jim would invest benefits at 3%

They dont want to use their equity in their home or their 401(k)s in their calculations

Tina has no life insurance currently