Reference no: EM133667290

Problem: Your clients, Jamal and Chyna Gwynn, would like you to estimate their life insurance needs based on a comprehensive needs analysis. Their son, Jarius, is currently thirteen years of age. Jamal and Chyna have high hopes for Jarius's future education. They would like to accumulate a $240,000 (in today's dollars) educational savings fund to pay for four years of college. In event of Jamal's or Chyna's passing, they will need $10,000 in transitional childcare expenses. When making your estimate, the Gwynns would like to pay off all debt and liabilities at the death of the first spouse. Use the following information to determine the life insurance need for Jamal and Chyna separately: Jamal: Age Forty-eight; Life Expectancy: Age Ninety-seven Chyna: Age Fifty; Life Expectancy: Age Ninety-five Desired Retirement Age: Age Sixty-two Full Retirement Age: Age Sixty-seven Earned Income: Jamal $145,000 Earned Income: Chyna $210,000 Bonus: Jamal $25,000 Investment Rate of Return: 7.90 Percent Inflation Rate Assumption: 3.00 Percent Marginal Federal and State Marginal Tax Rate Before Retirement: 29 Percent Marginal Federal and State Marginal Tax Rate After Retirement: 29 Percent Final Expenses: Jamal and Chyna $40,000 Each Estate Administration: Jamal and Chyna $12,000 Each Other Final Needs/Expenses: Jamal and Chyna $20,000 Each What is life insurance coverage based on human life value approach?