Use the needs approach method to calculate how much life insurance is needed for Jackie, who receives $50,000 gross income, and pays $8,000 in taxes and deductions.
She wants the life insurance policy to cover $50,000 in education expenses for her daughter, $20,000 to pay off the remaining mortgage balance, $10,000 for readjustment expenses for her husband and daughter, and $7,000 in final expenses. The Social Security benefit will be $2,500 a month for 12 years, and she has existing insurance of $25,000.
Consider an interest rate of 6%.