You and your spouse are in good health and have reasonably secure careers. You make about $65,000 annually and have opted for life insurance coverage of three times your salary through your employer. With your spouses income, you can absorb ongoing living costs of $45,000 a year. You own a home with a $280,000 mortgage. Other debts include a $10,000 car loan, a $5,000 student loan, and $3,000 charged to credit cards. In the event of your death, you wish to leave your family debt-free. One of your most important financial goals involves building an education fund of $80,000 to cover the cost of a four-year university program for your two children ages 2 and 4. To date, you have accumulated $15,000 toward this goal in a RESP. Should you die, your beneficiaries would receive a $2,500 death benefit lump sum payment from the Canada Pension Plan. You also have $25,000 in your company pension plan. The average funeral expense is $10,000. Your other financial assets are as follows:

Bank accounts $2,100

Term deposits (3 months) 3,000

TFSA High-Interest Savings 1,000

Stock investment account 2,500

RRSP's 10,500

Use the family need method to determine your life insurance needs. See below photos for a guide, to answer this question.

Exhibit 9-1 Mortality Table for Canadian Males The table provides the number of deaths expected during any year of life for a hypothetical cohort of 100,000 Canadian males. Column 1, Age, is the starting age for the given year. Column 2, Alive at Start of Year, shows how many of the cohort were alive at the start of the year at the age shown in column 1. For example, we see that in the third year, 99,457 of the original cohort were expected to be living. In the entry for Column 2, Alive at Start of Year, Age 4 is equal to Column 2 minus Column 3 from the previous line, Age 3. (99,45716)=99,441 Column 3, Deaths During Year of Survival, records the number of deaths expected to occur during the year starting on the birthday in Column 1. We see that, on average, 16 of the 99,457 alive on their third birthday are expected to die before their fourth birthday. Column 4, Probability of Survival, is calculated as (Column 2 - Column 3) Column 2, rounded to five decimal places. Thus, a threeyear-old boy has a 0.99984 probability of surviving to his next birthday. Column 5, Probability of Death, is calculated as Column 3 Column 2, rounded to five decimal places. Of course, this amount may be adjusted for a number of factors, including particular characteristics that may put a person at higher or lower risk, the various administrative fees that each company must pay, and other factors. In general, it is best to look for a company that manages its resources efficiently, as this lower company cost may translate to a lower premium for you. Exhiblt 9-2 The "Family Need" Method Worksheet to Calculate Your Life Insurance Needs \begin{tabular}{|c|c|} \hline \multicolumn{2}{|l|}{ What you have now (A) } \\ \hline Bank accounts & +$ \\ \hline Taxable investments and savings, other than your home and other real estate & +$ \\ \hline Real estate you own other than your primary residence & +$ \\ \hline Individual life insurance policies & +$ \\ \hline Group life insurance policies & +$ \\ \hline Total of what you have now & =A$ \\ \hline \multicolumn{2}{|l|}{ What your dependants may need (B) } \\ \hline \multicolumn{2}{|l|}{ Debt and expenses due at your death } \\ \hline Funeral and burial expenses & +$ \\ \hline Final income taxes & +$ \\ \hline Estate probate and administration costs & +$ \\ \hline Mortgages and loans not covered by insurance & +$ \\ \hline Credit card debt & +$ \\ \hline Subtotal & $ \\ \hline \multicolumn{2}{|l|}{ Living expenses } \\ \hline \begin{tabular}{l} 75% of your total family income (before tax) the number of years your dependants will need \\ it \end{tabular} & +$ \\ \hline Emergency fund ( 3 to 6 months of income) & +$ \\ \hline \multicolumn{2}{|l|}{ Children's education } \\ \hline Average annual potential cost average number of years in college number of children & +$ \\ \hline Total of what your dependants may need & =B$ \\ \hline Total of what your dependants may need (B) & B \$_ \\ \hline Total of what you have now (A) & A$ \\ \hline How much estimated life insurance you need (B - A) & =C$ \\ \hline \multicolumn{2}{|l|}{ If C is positive, you may need more life insurance. } \\ \hline If C is negative and your estimates are realistic, your dependants may be able to manage without ac & onal life insurance. \\ \hline \end{tabular} SOURCE: TIAA-CREF Life Insurance Company, "Four Step Guide to Life Insurance," December 2014, p. 8