Kate is a single parent and earns $40,000 per year.
Kate is a single parent and earns $40,000 per year. Household expenses are $28,000 per year. If she were to die, she estimates that the costs of her death would total $10,000. She has not participated in Social Security long enough to be fully insured. She would also want her life insurance to provide an education fund for her twin children who are age 10 and a lump sum to provide for their continued care, which she estimates will cost $15,000 per year until they are 18.Now answer the following, consulting text Ch. 13 as needed, and showing computations:a. Would an income approachgive Kate enough life insurance? Why or why not?b. Using a budget approach, how much life insurance would you recommend she buy?c. If Kate were fully insured under Social Security and her children would be eligible for total annual benefits of $10,000, how much difference would this make in her life insurance needs?
