Harry and Wanda Smith have two young children. Harry earns $80,000 a year and Wanda earns $50,000 a year. The couple has two children. The couple assumes that they could earn a modest 5 percent on investments in the current economic climate. They have $150,000 in personal investments and in their retirement plans. Use their calculations as a model for your own:
The answer you get after completing this three-step process is only a rule of thumb, but it will give you a ballpark figure that will let you know if your current insurance is adequate, or if you might actually be under-insured.
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