1 FIN 2063 INSURANCE FINANCIAL PLANNING Case Assignment Due Dates: Part I - Week 10 Part II - Week 12 Value: Part 1 – 10% Part II – 10% Total - 20% of final grade 1. This assignment represents a real client scenario. Create a report. a. Read the case, the requirements and the marking rubric. 2. Your report must be typed, double-spaced in Times New Roman 12 or Arial/Calibri 11. On the title page, include your name and student number. 3. As this is project is very similar in nature to a real life insurance planning scenario, present your report just as you feel you would present a real life insurance planning recommendation to a real life client. 4. The requirements at the end of the case indicate the expectations for your report, as does the marking rubric. Marks will be lost if your recommendations do not adequately meet or are not clearly aligned with the clients’ goals. If due to lack of clarity or insufficient information you feel it necessary to make an assumption, state the assumption in your report. That said, do not assume the case away. 5. Although you may discuss this with other individual in the class, your report must be unique. Any copying will result in a grade of zero. 2 Client Situation You are a financial planner with a specialty in risk management. You’ve completed the LLQP and are licensed to sell insurance products. You love your career and have built a successful practice based mainly on referrals from your satisfied clients. Jack, age 49, and Jill, age 48, are one of those referrals. Jack is Vice-President of Marketing at a mid-sized systems firm. His salary is $190,000 + bonus. Last year his bonus was $40,000. Jill is an accountant in private practice. She works from home and typically bills $150,000 a year (roughly $100,000 after expenses). They feel pretty comfortable financially but have asked you to flag any gaps that you can see in their risk management strategy. They also have specific questions that they’d like you to address. Jack and Jill are married with two children who live at home: Tracey, age 22 and Travis, age 17. Jill’s mother, Lauren age 75, is widowed. Although she is financially independent, she moved in with Jill and her family after the recent death of her husband. She contributes to the family’s expenses and is especially devoted to her granddaughter, Tracey. Tracey, a happy and outgoing woman, was born with Down Syndrome, a common genetic disorder. Otherwise, Tracey is in good health and could easily live to age 60. Jack and Jill would like to keep Tracey at home as long as possible but they are concerned about her ability to adapt if one or both of them dies unexpectedly. As a result, they’re considering moving her into a group home in their city. The group home provides full support to residents. The fee for this year is $58,250. Tracey has seen the place and likes it, in no small part b ...

1. 1
FIN 2063
INSURANCE FINANCIAL PLANNING
Case Assignment
Due Dates: Part I - Week 10 Part II - Week 12
Value: Part 1 – 10% Part II – 10% Total - 20% of final grade
1. This assignment represents a real client scenario. Create a
report.
a. Read the case, the requirements and the marking rubric.
2. Your report must be typed, double-spaced in Times New
Roman 12 or Arial/Calibri 11.
On the title page, include your name and student number.
3. As this is project is very similar in nature to a real life
insurance planning scenario, present
your report just as you feel you would present a real life

2. insurance planning
recommendation to a real life client.
4. The requirements at the end of the case indicate the
expectations for your report, as does
the marking rubric.
Marks will be lost if your recommendations do not adequately
meet or are not clearly
aligned with the clients’ goals. If due to lack of clarity or
insufficient information you feel it
necessary to make an assumption, state the assumption in your
report. That said, do not
assume the case away.
5. Although you may discuss this with other individual in the
class, your report must be
unique. Any copying will result in a grade of zero.
2
Client Situation
You are a financial planner with a specialty in risk management.
You’ve completed the LLQP and
are licensed to sell insurance products. You love your career

3. and have built a successful practice
based mainly on referrals from your satisfied clients.
Jack, age 49, and Jill, age 48, are one of those referrals. Jack is
Vice-President of Marketing at a
mid-sized systems firm. His salary is $190,000 + bonus. Last
year his bonus was $40,000. Jill is
an accountant in private practice. She works from home and
typically bills $150,000 a year
(roughly $100,000 after expenses). They feel pretty comfortable
financially but have asked you to
flag any gaps that you can see in their risk management
strategy. They also have specific questions
that they’d like you to address.
Jack and Jill are married with two children who live at home:
Tracey, age 22 and Travis, age 17.
Jill’s mother, Lauren age 75, is widowed. Although she is
financially independent, she moved in
with Jill and her family after the recent death of her husband.
She contributes to the family’s
expenses and is especially devoted to her granddaughter,
Tracey.
Tracey, a happy and outgoing woman, was born with Down
Syndrome, a common genetic
disorder. Otherwise, Tracey is in good health and could easily
live to age 60. Jack and Jill would
like to keep Tracey at home as long as possible but they are
concerned about her ability to adapt if
one or both of them dies unexpectedly. As a result, they’re
considering moving her into a group
home in their city. The group home provides full support to
residents. The fee for this year is
$58,250. Tracey has seen the place and likes it, in no small part
because her boyfriend lives there.

4. Travis will finish high school this year and start college in the
fall. He’s been accepted into a
systems engineering program, considered the top such program
in Canada. As the college is in his
home town, he’ll be able to live at home. On graduation, he
hopes to find employment locally so
he can continue to live near his sister, with whom he’s very
close. Jack and Jill have invested the
maximum in a RESP for Travis and the FMV is $71,415. Given
that they will soon start making
withdrawals from the plan, they recently switched the
investment portfolio to a mix of cash and
GICs.
While it’s been a struggle for Jack and Jill to manage the
diverse needs of both children, they love
them both deeply and want to make sure they’re set up to be
successful in life. This means ensuring
enough funds are available to support Tracey in the group home
for as long as she lives. In Travis’s
case, they intend to pay his annual tuition and related expenses
for an undergraduate degree (and
a graduate degree should he decide to pursue one). As Travis
will likely continue to live at home
during this period, they estimate the cost of his education at
$15,000 per year for the next six years.
They’d also like Travis to have extra money once he graduates,
to buy a home or start a business.
The amount they have in mind for that is $500,000. Aside from
these financial obligations, they
plan to retire in 18 years and spend all their hard-earned money
having fun!

5. 3
Current Insurance Coverages
Jack’s group benefits from his employer include the following:
commission) to a maximum of
$200,000
$5,000 on each of the
dependent children
maximum of $4,000 per month,
“regular occupation” definition for the first two years defaulting
to “any occupation”
thereafter, 180-day elimination period, benefit period to age 65
and partial disability
benefits.

6. and dependants. There are
no deductibles and no maximums. Coinsurance is 80%.
ehensive
coverage. Coinsurance is 80%. The
annual maximum for basic restorative is $2,000.
In addition to his group benefits, Jack has an individual long-
term disability policy that he bought
years ago. The benefit is $2,000 per month in the event of his
total disability, defined as the
worker’s “regular” occupation and defaulting to “any
occupation” after two years. The elimination
period is 60 days and the benefit period is to age 65. There are
partial, but no residual, benefits.
He also owns a Manulife universal life insurance policy (see
abbreviated copy attached). Jack’s
beneficiary on his life insurance policies is Jill.
Jill has no group benefits. However, she has private coverage
for life and LTD insurance. She has
a $250,000 Term 10 policy and a $25,000 participating whole
life policy that her parents took out
for her when she was a child. The dividend option on the latter
policy is “cash”. Jack is the
beneficiary of both policies. Her LTD coverage will provide a
monthly benefit of $3,800 on total
disability, defined as “regular occupation”. The policy has a
rider that extends the regular
occupation definition to age 65. The elimination period is 60
days. Like Jack’s plans, there is
partial coverage, but not residual. Both Jack and Jill pay the
premiums for all their LTD coverage.

7. Current Investment Assets
When Jill’s father died six months ago, she received $50,000
from a life insurance policy on his
life. She put the funds into a one-year GIC, which she saw as a
temporary move until she could
figure out how best to invest the money long-term. Both Jack
and Jill feel that, with the mortgage
paid off, if one of them died the survivor could manage well on
his/her continuing income plus the
couple’s joint savings.
4
Since Jack and Jill plan to spend all their invested assets in
retirement, they expect the planned
legacies for Travis and Tracey and their final expenses at death
will be covered solely by their
existing life insurance. They’re not sure if their life insurance is
sufficient, but that’s their plan.
Jack and Jill estimate the value of their home at $1,675,000.
They have a “small” mortgage of
$215,000 with BMO. This is their only debt. The mortgage is
insured with BMO and the
outstanding balance will be repaid should either Jack or Jill die.
They recently updated their home
and car insurance. They have two cars and, up until last year,
they parked both cars outside in the
driveway. But last fall, anticipating a particularly cold and wet

8. winter ahead, they added a carport
to the side of their house. During this process, they modified
and enhanced the entrance to the
home and updated the landscaping at the front of the property to
give the house more “street
appeal”. Their general agent pointed out that, because
earthquakes have happened in the GTA –
twice in the past 20 years alone, they might want to consider
adding a rider to their property
insurance policy to insure their home against earthquake-related
damages. But, thinking the odds
of this very remote, they decided their existing property
insurance was adequate and declined the
extra protection.
Retirement Planning Issues
Aside from the mortgage, which is insured with BMO, Jack and
Jill have no debts.
Their “spendable” assets, in addition to government benefits,
include the following:
Jack Jill
GIC - $ 50,000
Self-directed RRSP $ 91,025 1 $185,530
LIRA - $ 75,280 2
RPP $335,011 3 -
Investment Portfolio $495,685 4 -
CV Life Insurance 5 $ 48,361 $ 13,964
1 Due to his salary (and subsequent RPP contributions) Jack’s

9. RRSP contributions are minimal.
2 From her employment prior to working independently.
3 Defined contribution plan. Contributions are 5% of salary and
matched by employer.
4 Non-registered, diversified portfolio with focus on growth.
Originated from an inheritance Jack
received after the death of his parents.
5 Included for information purposes only. Since Jack and Jill
view their life insurance policies as
essential for meeting the financial needs of Tracey and Travis,
they don’t plan to surrender them.
Jack and Jill manage their respective investment portfolios and
Jack manages the accumulation
fund in his UL policy. They’ve been investing on their own
since they started earning money. They
feel confident and find it interesting. They believe they can
achieve a rate of return equal to 3%
a year.
5
Estate Planning Issues
Jack and Jill have mirror wills. Anticipated final expenses
include their funerals and the executors’
and accountants’ fees. They’ve estimated that $50,000 for each

10. of them should be adequate to
cover these expenses. They are each other’s beneficiary. After
both have died, the net estate
proceeds will be divided equally between Travis and a trust for
Tracy. They both also have Powers
of Attorney for Property and for Personal Care.
Tax Planning Issues
Other than investing in their RRSPs and a vague awareness of
income taxes at death, Jack and Jill
haven’t thought much about income taxes. They both have an
average tax rate of 35%. Since they
plan to spend all their money in retirement, they don’t foresee
any major tax liability on their death.
6
Requirements
Part I - 10%
1. A maximum one-page, cover letter/executive summary, in
business format that:
should take.
2. Outline the risk management process for your clients. At each

11. step, give them an example of
what you would do to ensure the step is demonstrated
adequately and professionally. For
example, list the objectives, identify the risks Jack and Jill face,
etc (6 Marks.
3. Calculate the amount of life insurance they should purchase
using the income approach.
4. Conduct a Capital Needs Analysis for Jack and Jill, assuming
they both die in a car accident
tomorrow. Make any reasonable assumptions. Include the
assumptions in report and answer
the following:
much should they
purchase and what type/s of life insurance would you
recommend? State your reasons
for selecting that type of life insurance.
plications related to:
a. The death benefit that Jill received as a beneficiary of her
father’s policy.
b. The annual increase in cash value in her whole life policy.
c. The dividends she received this year from her whole life her
policy.
d. Jack’s group life insurance premiums that are paid by his
employer.

12. when they took the loan.
Explain the drawbacks of this type of “creditor” life insurance.
7
Requirements
Part II - 10%
5. Risk of loss of income due to a long-term disability:
a. If Jack is severely injured in a car accident and cannot work
for four months, how much
will he collect in total during that 4 month period from his
disability insurance policies?
b. Would you recommend Jack and Jill buy additional LTD
coverage? Why or why not?
6. Risk due to accident or sickness:
a. Jill purchases Tracey’s medications. How much of Tracey’s
prescription would be

13. reimbursed if the total claim for the year is $1,200?
b. Whose extended healthcare plan provider is primary if:
i. Jill needs a prescription filled
ii. Travis needs a prescription filled
iii. Jack and Jill get divorced and Jill has custody of Tracey.
When Jill marries Bob,
she cancels her extended healthcare plan because she’s covered
under Bob’s.
Jack is still working and a member of his benefits plan. Tracey
needs a
prescription filled.
7. Risks related to retirement planning
Would you recommend Jack and Jill consider switching any of
their existing investments to
segregated funds? Why or why not?
8. Is the family exposed to any other personal risks? Do you
have any other recommendations?
Should they purchase homeowners’ insurance?
8
Marking Rubric

14. Section Expectations Possible Marks
Part I (10%)
1 Cover Letter Objectives
Major findings/recommendations
Business format
4
2 Risk Management
Process
Examples at each step
6
3 Income Approach Show calculations
4
4
Risk of premature death Capital needs analysis
6

15. Coverage
2
Tax implications 2
Mortgage Insurance 2
Total marks available
24
Part II (10%)
5 Risk of loss of income Calculations & Recommendations 4
6 Risk due to accident or
sickness
Hospital accommodation
Provider, calculation
4
7 Risks related to

16. retirement planning
Recommendation and rationale
2
8 Other recommendations
4
9 Final Report Business Format, Spelling Errors 2
Total marks available 16
Wax Museums at New Market and Franklinville Elementary
https://www.youtube.com/watch?v=tNWaYXA4xSk
A Living Wax Museum of Famous Americans, Past and Present
https://www.schooltube.com/media/A-Living-Wax-Museum-of-
Famous-Americans-Past-and-Present/1_dhvn7zj2