Solve for Zac and Mary’s life insurance needs using the following approaches:
· Human-Life Value Approach
· Needs Approach
· Capitalized-Earnings Approach
Zac and Mary Johnson are 36 and 34 respectively. Zac has recently been offered a new job as an IT engineer with a newly created software company that helps churches fully integrate their giving, attendance, and member data software where he can earn $102,000 per year. Mary currently stays home and homeschools their two children (Brayden (10) and Cora (7)) although she holds a CPA license in the state of Indiana. Zac and Mary also have two Mastiffs (Fun and Games). Zac and Mary have been married for 14 years and currently live in a rural area outside Indianapolis IN. 
With great excitement, Zac and Mary have just realized that they will be expected their third child. Knowing his type A personality, Zac begins to feel anxious that he has not done an adequate job of protecting his family should something happen to him, especially with the anticipation of a third child. 
Zac approaches you in your local men’s bible study and asks to meet with you regarding a review of his current insurance. He seems rather bothered by where he stands, specifically not knowing how much life insurance he really should have. 
In the course of your follow-up meeting, he gives you the following information:
v Current salary: $102,000
v Annual salary increase: 3.0%
v Retirement Age: 67
v Expected inflation rate: 3%
v Final expenses: $30,000
v Income Tax bracket: 25%
v Total monthly social security benefit per child until the child reaches 18: $3200
v College education costs $25,000 per year per child in today’s dollars starting at age 18 for four years.
v Education inflation rate: 5%
v Monthly income needs for spouse until last child is age 22: $5500
v Personal Consumption: 20% of income
v Investment returns expected to be 6%
v Mortgage and debt repayment (as it stands today) is: $285,000


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