A finished ACC-663 Topic 6 coverage needs calculation example, sizing a $720,000 life insurance gap from survivors' needs, covering the at-home spouse and flagging disability and liability exposures. Searches like "acc 663 topic 6 assignment example", "acc663 topic 6 sample" and "acc-663 topic 6 example" land here.
What a finished ACC-663 Topic 6 coverage needs calculation looks like
The finished calculation lists what the survivors would need if the earner, on an illustrative $92,000 salary, died this year. Household income of $48,000 a year for fifteen years, discounted at an assumed 3 percent real return, is worth about $573,000 today. The $190,000 mortgage, an $80,000 college fund and $15,000 of final expenses bring total needs to $858,000. Resources already in place, $92,000 of group life cover and $46,000 of savings, reduce that to a $720,000 gap, and a line for Social Security survivor benefits is left to be filled from the earner's own statement. The at-home spouse is sized too: three years of childcare at $18,000 comes to about $51,000. A closing panel notes no long-term disability cover and auto liability at the state minimum.
How an ACC-663 Topic 6 example is structured
The calculation moves from exposure to gap to the form of cover. An opening paragraph states the family facts and the assumptions, each labeled: the income the survivors would need, the period, the real return and the college target. The needs section follows, with income replacement discounted to a present value and the formula shown once, then the lump-sum needs listed beneath it. A resources section subtracts existing cover and savings, leaves retirement accounts out and says why, and carries the survivor benefit line as an open item. The gap is stated next and compared with a ten-times-salary rule, which would buy $920,000 and cost premiums for $200,000 the family does not need. The at-home spouse's section prices childcare replacement. The last section recommends level term cover for the gap, gives the reason permanent cover was rejected, and lists the disability and liability gaps for the next meeting.
Needs built from the survivors' budget
Income replacement starts from what the family would spend without the earner, $48,000 a year, rather than from the salary, which also covered the earner's own costs.
Existing resources subtracted before any purchase
Group cover and savings reduce the need to $720,000, and the survivor benefit line stays open until the earner's own Social Security statement supplies the figure.
A salary multiple set aside
Ten times salary would buy $920,000 of cover, and the calculation shows that figure overshoots this family's measured gap by $200,000 of unneeded premium-bearing cover.
The at-home spouse insured too
Three years of childcare at $18,000, about $51,000 in present value, is the exposure the family would face if the non-earning spouse died first.
Cover type chosen after the amount
Level term cover for the gap is recommended over permanent cover, because the need falls as children grow and the budget cannot carry permanent premiums at this size.
Disability and liability left flagged
No long-term disability cover and state-minimum auto limits are listed as open exposures, each tied to the asset it leaves unprotected, future earnings and net worth.
Where marks go in ACC-663 Topic 6
Coverage set by a salary multiple and never tested against the family's own needs costs this calculation most, because the multiple carries no information about this household's spending, debts or children. Papers that replace the full salary overstate the need, since part of the salary paid the earner's own costs. Leaving existing group cover and savings out of the resources double-insures what is already covered. Survivor benefits handled by an invented figure draw a deduction in many sections, while a labeled open line keeps the paper honest. Ignoring the at-home spouse is a common gap: the family would buy childcare it now provides for free. Recommending permanent cover without comparing it to term, or recommending a product before sizing the exposure, reverses the order this topic marks, and disability left unmentioned leaves the largest asset, future earnings, unprotected.
Get an ACC-663 Topic 6 example written to your instructions
Send the ACC-663 Topic 6 instructions, your rubric and the family facts your section provided. We write a custom example to them, with needs built from the survivors' budget, existing resources subtracted, each assumption labeled, the cover type chosen after the amount and open exposures flagged, returned in 24 to 48 hours. The first is free and is not insurance advice.
ACC-663 Topic 6 questions, answered
Why not use a multiple of salary?
Because a multiple ignores everything particular to the family: how much the survivors would spend, how long until the children are independent, what debts and savings exist and what cover is already in place. In the example, ten times salary overshoots the measured gap by $200,000. A needs calculation takes more work and produces a figure the adviser can defend line by line.
Why use a real rate of return to discount the income need?
Because the survivors' spending will rise with prices over fifteen years. Discounting at a real rate, the assumed return after inflation, keeps the $48,000 in today's purchasing power throughout, which is simpler than inflating each year and discounting at a nominal rate. The 3 percent figure is an assumption, labeled as such; a lower rate would raise the need and a higher one would reduce it.
Does the CPA recommend a specific insurer or policy?
Not in this example. The calculation recommends an amount and a type of cover, level term for the gap, and leaves carrier and product selection to the couple and a licensed agent, since selling insurance requires a license. Because the firm takes no commissions, its sizing carries no incentive toward a larger or permanent policy, and the engagement letter says so.