You have been asked to advise on the amount of life insurance cover that should be provided for the Harrison family.

Emma is 35 years old and is an accountant with an annual gross income of $120,000. Her husband Mark is 40 years old and self employed as a solicitor. He earns approximately $350,000 per annum. Both work full-time and utilise childcare for their two children, aged one and four. Both children will attend the local public school. The familys living expenses are $3,500 per month, which covers all their immediate needs. In addition, each parent requires $300 each per month and the children require $250 each per month; child care amounts to $400 per week per child until each child is of school age and then it is expected to drop to $100 per week for each child for after-school care. The children are expected to be dependent until they reach 21 years. Once the children are no longer dependent, living expenses are anticipated to fall to $2,500 per month.

Emma and Mark recently purchased their own home, valued at $1,050,000, but still have a mortgage of $550,000$350,000. Both Emma and Mark have credit cards the total balance is $20,000$18000.

They would also like to fund their childrens university education, expected to be $30,000 per child.

Emma has superannuation with insurance worth $250,000 and Mark has $375,000 in his superannuation account.

Calculate the level of term life cover needed for Emma and Mark, using both the multiple and the needs analysis approaches. Assume the following: funeral costs $10,000, final medical costs $15,000, legal costs $5,000 and required emergency funding $25,000. The investment rate is 2.5% per annum. Show all workings. (Assume that both Emma and Mark will need to be provided for till age expectancy of 82 years.)