DFP2 Insurance Policies: Client Consultation, Planning & Protection

This assignment presents a client consultation scenario centered around insurance policies and financial planning. The discussion covers various concerns raised by the client, including the cost of trauma policies, mortgage payments during illness, and the suitability of income protection policies alongside superannuation funds. The consultant addresses the client's queries regarding the benefits of trauma insurance, the tax implications of income protection policies, and the rationale behind varying life and TDP coverage amounts for the client and their spouse. Furthermore, the consultation explores the possibility of switching super funds and the advantages of maintaining separate personal insurance policies. The client expresses satisfaction with the explanations provided, indicating a successful and informative consultation. Desklib offers a wealth of similar solved assignments and resources for students.

Running head: INSURANCE POLICIES
Insurance Policies
Name of the Student:
Name of the University:
Author’s Note

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INSURANCE POLICIES
Section 1
Me: Hello Mr. and Mrs. Smyth. I am pleased that you could make this meeting possible
considering your busy schedule. Its been a week time since we had a talk.
John: Yes, It’s been a week, had to discuss important matters so that meeting was important.
Me: I am under the impression that you have various questions regarding the financial planning
which you are considering.
John: Yes, we are having certain queries and also certain issues regarding the plan which is
suggested by you and we are here to discuss the same.
Me: Ok we would move into the topic of discussion shortly, but firstly tell me have you gone
through the documents regarding the insurance policies? In addition to this, have you considered
the market conditions in insurance market?
John: Yes, we have gone through the documents and completely understand the risks and
uncertainties which are present in the market.
Me: Ok, then we should proceed to the matter of concerns for which this meeting has been
scheduled and please free to put forward all your concerns and I would try mu level best to
satisfy all your concerns. By the end of this conversation, I can assure you that by the end of this
meeting that I will be able to satisfy your every concern. We will also discuss about the future
income of your wife and her plans to proceed further in life. Shall we proceed with the matters
which you wanted to discuss?

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Section 2
You: The first issue that you have highlighted is related to cost related to the trauma policies and
you are feeling that the amount which is charged for the policy is high. Another query which is
regarding the payment for mortgage at the time of short-term traumatic illness or accident. The
cost of trauma would be high in response to your question as it can pay out assets for both you
and your wife. You need to pay off the mortgage at the time of short-term traumatic illness or
accidents as if the mortgages are not paid the amount will rise and penalties will be applicable as
well. The value and price which is needed to be paid for the mortgage and insurance cover can
rise in future as well.
John: I feel that the information which is provided by you is accurate, however we need to
confirm the information and further satisfy myself. I have also had serious concerns regarding
the future life of my child and whether I would be able to meet all the requirements for my child
and provide him with appropriate lifestyle.
John: I have recently come across information that there are super funds which can cover our
trauma insurance and secure us
You: Yes in earlier times there were super funds which provided trauma insurance and the
benefits was appropriate from such funds. In earlier times, payment of premiums with super
funds which did not arises from disposable income and it also did not have any impact on the
income tax that is earned. But changes were made in law in 2014 and trauma insurance was no
more covered by super funds. Therefore, such an option in present time is not available.

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John: Ok I had received the same information but wanted reassurance from you. Oh, I wish that
policy was still running, it would have benefitted me greatly. However, I need a plan which
would provide me with similar benefits.
John: Another thing which I wanted to ask you is that whether you suggest me to take a income
protection policy when I have super fund covering the same for me
You: I did recommend a personal income protection policy considering several factors. One of
which is that even though the policy fee is paid in case of super funds but the balance will be
lower comparatively. The changes of wide coverage are also not possible in super funds as the
same are cheap funds. The income protection policy out of super funds would only reduce the
actual balance of super funds and therefore income protection policy is suggested and the income
will be protected.
John: Ok now I get it, thank you for clarifying for the same.
John: I want to know whether there is any way to reduce the costs of income protection policies
while retaining similar benefits.
You: Yes there are ways in which the expenses which are usually incurred in an income
protection policy can be reduced and also retain the benefits which were earlier discussed. You
can claim tax benefits for the premiums and the income protection policy which is selected by
you. In such a way the overall tax value which you need to pay decreases significantly. The
waiting period is suggested to be 14 to 30 days and this would further improve the income
protection plan and reduce the expenses. This will help you to claim the benefits which you want
and also reduce the expenses for such a policy.

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John: I feel satisfied with your analysis and feel whatever you are saying is absolutely correct.
John: I want to know Why I require more life and TDP coverage in comparison to my wife.
You: This question is a bit tricky and therefore I need to make you understand the situation
properly by stating the facts. As per the facts which are known to me, You are much older than
your wife and you are also more prone to sickness and other health issues which is basically the
main reason due to which you would be requiring more life and TDP coverage in comparison to
your wife. In addition to this, you are more older, so naturally you will also be retiring sooner
than your wife which is why I have suggested a high life and TDP coverage for you and plus
there is also the fact that you are earning more than your wife and therefore you are capable of
contributing more to such a policy. So, in case of any kind of unprecedented events your family
and you would be financially remunerated. In this manner your future life will be safe and
secured.
John: I see your point and I completely agree with your point and now I am certain that I need to
further consider the points which you have laid down before me and think about increasing my
net income more in coming future.
John: Last Question, Why should I switch to the same super fund as me and take out $2m
life/TPD cover.
You: I am of the opinion considering the facts which I know that you cannot switch super funds
and withdraw $ 2 million life/TDP cover due to the various benefits which you are receiving
from the current cover under which you are placed. I am also aware that the current premium
which you pay is higher than what your wife pays in current situation. The policy amount is of
$750,000, however you are able to get a personal policy of $ 2 million for the coverage which

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gives you additional benefits. In such a case you have the option of claiming $ 2 million from
personal policy as well as the insurance amount of $ 750,000. This is also an indication that the
real amount which you will be able claim will also be significantly higher as well. The other
benefit from this cover has been that the additional personal policy amount can be claimed from
your end during any point of time during the course of life. Therefore, the money can be used
effectively to improve your standard of living and meet expenses effectively.
John: I am quite happy and pleased with all your explanations and can say that this meeting was
a grand success.

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Section 3
You: I hope that I have explained and responded to each and every query of yours and was able
to satisfy you. Is there any other thing that you want to ask me in this relation?
John: No I do not have any other query at the moment and is completely happy with the
explanation which were provided by you. However, when reconsidering the plans I might come
up with certain things which I will surely get back to you for further clarifications. I will contact
you in such a case.
You: Please do so and I am happy to help you.

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Section 4
You: I am happy to help you out and in case you have any queries you are welcome to call me
and I will satisfy your doubts.
John: I am happy that I am able to consult you like this
You: I hope I was able to satisfy all your concerns
John: Yes, you did.
You: In case of any problem we can conduct such a meeting or even discussed it over phone as
per your preference.