Look at this married couple with children (they also show up in project #5) and propose a life insurance program for them. Here is their story – saving you from having to look at the next project:
Married couple (H&W) in their 30s, 3 kids (ages 10, 6 and 2), own a $200,000 house with a 30 year mortgage (28 years remaining on mortgage; initial borrowing was $175,000) and 2 cars, both work and earn $125,000 annually (H earns $50,000 and W earns $75,000). They have $10,000 in retirement accounts and no other savings. They are able to afford all their annual living expenses with their after-tax salaries.
Who should be insured and why? (Be sure to deal with each of the individuals in the family).
Who should be the owner and beneficiary of each of any policies you propose?
How much insurance should be purchased for each insured and why? How did you determine the amount of needed life insurance coverage?
How long should the insurance coverage continue for each of the policies proposed?
What type of coverage would you use to fulfill your insurance program – term, permanent, both? How much of each?
What does your insurance program cost (search the internet for costs and provide links to your results)? Once you have determined an insurance program, discuss how the cost you have identified makes sense (or doesn’t make sense) based upon the financial position of the family.If it doesn’t make sense, you will need to provide an alternative insurance program.
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