Kyle and Linda are married with two children at home and a mortgage. Kyle’s net pay per year is $32,000 and Linda’s is $48,000. Their monthly expenses are $3,500. Kyle and Linda each contribute 15% of their earnings to a retirement fund and they have $5,000 in savings. They also have a $100,000 life insurance policy on Kyle, but none on Linda. As their financial advisor, what part of Kyle and Linda’s financial plan would you encourage them to work on and why?
Answers
Answer:
Concept:
A agreement among an insurance policy holder and an insurance company in which the insurer undertakes to pay a sum of money in exchange for a premium if the insured person dies or if a particular period of time passes. The fundamental goal of life insurance is to offer financial assistance to dependents in the event of an insured person's early death. When the insured dies, the policy pays the named beneficiary a predetermined amount termed a "death benefit."
Given:
Kyle and Linda have two children at home as well as a mortgage. Kyle earns $32,000 per year in net compensation, whereas Linda earns $48,000. Their monthly expenses are $3,500. Kyle and Linda each put 15% of their income into a retirement account and have $5,000 in savings. Kyle also has a $100,000 life insurance policy, but Linda does not. What component of Kyle and Linda's financial plan would you advise them to improve on, and why?
Find:
We must figure out the answer to the supplied question.
Answer:
Their plan for protecting their assets. Linda should be covered by life insurance.
=> Linda need more insurance than Kyle does since she earns more money and would suffer a greater financial loss if she died. Kyle and Linda both require more life insurance than 100k. I also require income security. They are saving a portion of their wages, which is excellent, but it is all going into a retirement fund with an additional $5,000 in cash. Diversify into real estate directly, however as a financial advisor, this is usually not where you want your clients to invest, and some gearing could help significantly.
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Answer: D - Their plan for protecting their assets.
They should have life insurance on Linda
Step-by-step explanation: 100% Edge. 2022