Winnie and Franc Katrani, ages 30 and 35, plan to purchase life insurance. Winnie does not have any coverage, while Franc has a $150,000 policy at work. The Katranis have two children, ages three and five. Winnie earns $28,000 from a home-based business. Francs annual salary is $55,000. They save $7,500 annually. The children will be financially dependent for another 15 years. In preparation for a visit with their insurance agent, the Katranis have estimated the following expenses if Franc were to die: - immediate needs at death: $25,000 - outstanding debt (including mortgage repayment): $90,000 - transitional funds for Winnie to expand her business: $35,000 - post-secondary expenses for their two children $50,000 Winnie projects that her annual income would be $40,000, if she were to expand her business. Once the children are self-supporting, she estimates her pre-retirement income needs at $55,000 per year, from age 45 to 65. She would also like to replace 50 percent of her income in retirement, from age 65 to age 85. She anticipates receiving a 6 percent return, compounded annually, on her investments. To date, the Katranis have accumulated a total of $107,000 of assets. This includes $10,000 in an emergency fund, $32,000 for Winnies retirement, $35,000 in joint non-registered investments, and $30,000 for Francs retirement. Using the budget method, estimate the amount of additional life insurance, if any, that the Katranis should purchase to protect Winnie and the kids if Franc should die. Winnie would like you to determine this amount on a pre-tax basis and does not need to adjust the income benefit for annual inflation. What type of life insurance policy would you recommend that Franc purchase? Should Winnie purchase a life insurance policy? Why or why not? If so, what type of policy would you recommend for Winnie?