Reference no: EM133419541

Case Study: Victor, age 33, and Maggie, age 35, are married and have two children, ages ?ve and seven. Victor works for the local township earning $85,000 per year ($57,790 after taxes and deductions toward the Canada Pension Plan and Employment Insurance). After staying home for several years to care for the children, Maggie is scheduled to return to work part-time. She expects to earn $40,000 in gross annual salary, which amounts to $29,841 after taxes, CPP and EI deductions. They estimate that annual child-care expenses will increase by about $5,000 per child, for after-school programs, summer camps and extra-curricular activities, until each child turns 14. Victor and Maggie are in good health, but there is a history of breast cancer in Maggie's family. Victor's employee bene?ts include the following: life insurance in the amount of two annual salaries; 80 percent of prescription drug coverage; 80 percent of dental care coverage of up to $5,000 per year; short-term disability coverage equaling three-quarters of gross salary (non-taxable) for the ?rst 110 days, following a waiting period of 10 days; and long-term "any occupation" disability coverage equaling two-thirds of his gross salary (non-taxable), payable after 120 days, until age 65. The bene?ts keep pace

Question: Estimate the couple's income replacement needs, should either or both become disabled and be unableto work. Explain your results and make adequate product recommendations.