Using the Information Provided in the Previous Question, Ms

question 30

Essay

Using the information provided in the previous question, Ms. Maryanne To is uncertain as to whether the 25 year term will be sufficient to meet the financial needs of her dependants given that her youngest daughter has a disability.
a) Calculate the life insurance cover required (to the nearest $'000) assuming that the payments would continue indefinitely and that Maryanne's financial dependants would withdraw their income requirements on an annual basis in arrears after receiving an initial payment of $100,000 upon her death.
b) What difference would it make to your calculations in part a) of this question if the earnings rate was increased to 8%? Why would such difference be expected?

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Definitions:

Stepfathers

Men who are married to one's mother after the divorce or separation from one's biological father and may act as a parent to her children.

Financial Resources

Assets, wealth, or capital used to support a person’s or organization's needs and objectives.

New Stepfamily

A family unit formed when one or both partners in a marriage or committed relationship bring children from previous relationships.

Stepparents

Adults who become parents to their spouse's or partner's biological or adopted children in a blended family scenario.