The Harrises are the proud parents of 8-year-old twins. They have decided to review their life insurance needs. Tom, age 41, is the primary breadwinner, earning $45,000 a year as an electrician. Brandy earns $15,000 a year working at a part-time job, which allows her to be home most of the time with the girls.

• Both Tom and Brandy had purchased $135,000 life insurance policies when the twins were born. But eight years later, a lot has changed in their lives, and they aren’t sure if their original policies are still sufficient to meet their financial needs.
• For this planning exercise, the best way to determine if someone needs more life insurance, is to assume that the person is suddenly out of the picture—in this case, we assume that Tom dies now, at age 41.
• The process the Harrises go through to evaluate Tom’s life insurance needs begins by determining how much income Brandy and the kids would need to maintain their standard of living.

• After doing the math, they determine $45,000 a year would suffice.
• Here is the complete list of items that Brandy wants in place if she suddenly is raising the twins on her own:
• An annual income of $45,000 for a period of 10 years.
  2. The twins’ college educations fully funded right now.
  3. The mortgage and all other debts paid off in full.
• Instructions: Using the financial information in the attachment, determine if the life insurance Tom owns is enough to accomplish Brandy’s 3 financial goals.

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