Reference no: EM13699868

Ryan and Allison have 2 children ages 6 and 3. Ryans monthly take home pay is 3600 and Alisons is 4200. They wish to have $120,000 for their kids college fund (60,000 each). 210,000 in mortgage debt and 25,000 in credit card and installment loan debt. They project to get $10,000 in final estate and funeral costs. Both kids qualify for a combined $1800 a month. $75,000 in investments. Decreasing term life policy for $100,000. Ryan has $80,000 group policy at work, Allison has $100,000 group policy. Assume that Ryan's gross annual income is $54,000 and Alison's is $60,000. Their insurance agent has given them a multiple earnings table showing that the earnings multiple to replace 75 percent of their lost earnings is 8.4 for Ryan and 7.2 for Alison. Use this approach to find the amount of life insurance each should have if they want to replace 75 percent of their lost earnings. I would love to know the easiest way to solve this problem or a simple formula that can get me the answer. Thank you so much