Money.cnn.com states, “The single most important reason to own life insurance is to provide support for your dependents.” Insurance4usa.com states, “Professionals suggest you have 8 to 12 times your income in life insurance.” Pat and Bonnie Marsh are calculating how much life insurance they need. They have two young children with no college fund set up. Bonnie is a 42-year-old stay-at-home mom. Pat, 44, earns $90,000 per year. (Use Table 20.1.) (for females subtract 3 years from the table). How much life insurance do you recommend each person have, assuming that you suggest that they have the minimum number of times of their income? (Note that a spouse who stays at home to raise the family generates the equivalent of a salary that needs to be taken into account. Assume Bonnie’s salary is $47,000.) What will be the cost of straight-life insurance for both policies if the lowest recommended amount is used? Note: Round your answers to the nearest cent. What is the monthly premium owed? Note: Round your answer to the nearest cent.
