You and your spouse are in good health and have reasonably secure careers. You make about $75,500 annually and have opted for life insurance coverage of three times your salary through your employer. With your spouse's income, you are able to absorb ongoing living costs of $55,500 a year. You own a home with a $290,500 mortgage. Other debts include a $15,250 car loan, $7,100 student loan, and $4,050 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 $101,000 to cover the costs of a four-year university program for each of your two children ages two and four. To date, you have accumulated $25,500 toward this goal in an RESP. Should you die, your beneficiaries would receive a $2,500 death benefit lump-sum payment from the Canada Pension Plan. You also have $35,500 in your company pension plan. Average funeral expenses are $13,600. Your other financial assets are as follows: Bank accounts Term deposits (3 months) TFSA High Interest Savings Stock investment account RRSPS $ 3,150 4,050 2,050 3,550 10,500 Use the family-need method to determine your life insurance needs. Dependents need 5 years of income as living expense. Assume that there is a desire to have a 3 month reserve based on their annual income. (Omit the "$" sign in your response.) Additional life insurance needs $
You and your spouse are in good health and have reasonably secure careers. You make about $75,500 annually and have opted for life insurance coverage of three times your salary through your employer. With your spouse's income, you are able to absorb ongoing living costs of $55,500 a year. You own a home with a $290,500 mortgage. Other debts include a $15,250 car loan, $7,100 student loan, and $4,050 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 $101,000 to cover the costs of a four-year university program for each of your two children ages two and four. To date, you have accumulated $25,500 toward this goal in an RESP. Should you die, your beneficiaries would receive a $2,500 death benefit lump-sum payment from the Canada Pension Plan. You also have $35,500 in your company pension plan. Average funeral expenses are $13,600. Your other financial assets are as follows: Bank accounts Term deposits (3 months) TFSA High Interest Savings Stock investment account RRSPS $ 3,150 4,050 2,050 3,550 10,500 Use the family-need method to determine your life insurance needs. Dependents need 5 years of income as living expense. Assume that there is a desire to have a 3 month reserve based on their annual income. (Omit the "$" sign in your response.) Additional life insurance needs $
Chapter8: Taxation Of Individuals
Section: Chapter Questions
Problem 64IIP
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Transcribed Image Text:You and your spouse are in good health and have reasonably secure careers. You
make about $75,500 annually and have opted for life insurance coverage of three
times your salary through your employer. With your spouse's income, you are able to
absorb ongoing living costs of $55,500 a year. You own a home with a $290,500
mortgage. Other debts include a $15,250 car loan, $7,100 student loan, and $4,050
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
$101,000 to cover the costs of a four-year university program for each of your two
children ages two and four. To date, you have accumulated $25,500 toward this goal
in an RESP. Should you die, your beneficiaries would receive a $2,500 death benefit
lump-sum payment from the Canada Pension Plan. You also have $35,500 in your
company pension plan. Average funeral expenses are $13,600. Your other financial
assets are as follows:
Bank accounts
Term deposits (3 months)
TFSA High Interest Savings
Stock investment account
RRSPS
$ 3,150
4,050
2,050
3,550
10,500
Use the family-need method to determine your life insurance needs. Dependents
need 5 years of income as living expense. Assume that there is a desire to have a 3
month reserve based on their annual income. (Omit the "$" sign in your response.)
Additional life insurance needs
$
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