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Brad earns $50,000 per year as a manufacturer's rep and his wife, Nancy $100,000 year as an Oncologist
Brad earns $50,000 per year as a manufacturer's rep and his wife, Nancy $100,000 year as an Oncologist. When they had children, Nancy left her practice to become a full-time mother. The family's expenses are $35,000 per year, which includes an amount being saved for the children's college education. Brad and Nancy have two children, ages 2 and 5. They receive an average return of 6% on their investments. Nancy has retained her active medical license and plans to return to work full-time when the children enter school. Using the budget method, how much life insurance should the family have in the event of Brad's death?
Expert Solution
Under budget method, first the need for future expenses are determined and accordingly the insurance plans are taken.
In the given case the family has not taken any Insurance on Brad. Hence on the evenet of the death of Brad , the family will not have any life insurance.
Note that Brad is only the representative of a manufacturer. He has no personal life insurance. Hence no amount will be received in the event of death of Brad
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