two-income family

Jacob and Emma McDonald are a two-income couple in their early 30s. They have two children, ages 6 and 3. Jacob’s monthly take-home pay is $3,600, and Emma’s is $4,200. The McDonalds feel that, because they’re a two-income family, they both should have adequate life insurance coverage. Accordingly, they are now trying to decide how much life insurance each one of them needs. To begin with, they’d like to set up an education fund for their children in the amount of $120,000 to provide college funds of $15,000 a year—in today’s dollars—for 4 years for each child.