Comprehensive Insurance Planning Project: Securing Lee & Kate's Future

This project analyzes the insurance planning needs of Lee and Kate, a married couple with two young children. It begins by outlining the couple's insurance objectives, including safeguarding their children's future, addressing Lee's health concerns, and ensuring financial stability in case of death or disability. The project then identifies potential problems related to death, disability, and retirement, highlighting the financial implications for the family. It examines the couple's assets, liabilities, and existing insurance coverage, including life, health, and home insurance. The project concludes by offering detailed recommendations for insurance and retirement planning, such as increasing life insurance coverage, purchasing individual insurance for the children, and obtaining additional health insurance. It also suggests adjustments to their cash flow to accommodate the recommended insurance products. The analysis considers both Lee's and Kate's financial situations, including their income, debts, and investment plans, to create a comprehensive and practical financial plan. The project emphasizes the importance of proactive insurance planning to mitigate financial risks and secure the family's long-term financial well-being.

Running head: INSURANCE PLANNING
Insurance Planning
Name of the Student:
Name of the University:
Author’s Note:

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Part 1
Lee and Kate have been married since the year 2008 and they have known each other
since their college days. They have two children named Wyatt aged 5 year and Sawyer aged 3
year. The Lee works full time and gains significant amount of income and on the other hand Kate
works part time and plans to work full time once Sawyer joins kindergarten. The couple have the
objective of planning their insurances in such a manner so that all their objectives would be met
and they along with their children would have a secured lifestyle. Hence, the insurance planning
objectives of the couple have been given below:
 The initial objective of planning the insurance has been to safeguard the future of
Wyatt and Sawyer as both of them are infants and have a long course of life ahead
of them. In this respect, insurance plans have to be taken with the help of which the
future life of their children can be secured.
 The health status of the Lee addresses that he has plantar fasciitis and occasional
joint pain. The family history of Lee even highlights the chances of bowel cancer.
The doctor has even suggested taking care of his sleeping and eating habits and has
asked not to take much stress. Hence, with these issues it is essential for Lee to
purchase an insurance that would be able to provide financial remuneration to his
family in case of death and permanent or temporary disablement. In case of any
such scenario, his family can be secured and would be able to maintain a smooth
and healthy lifestyle.
 Lee and Kate has observed that their children is quite young and have a long way to
go in their life. The couple even has the plan of making their children attend college
or universities and educate them so that they can have a successful career. In order

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to do the same, it is essential that the couple purchases an insurance plan that would
be able to meet the future educational expenses of their two children.
 The couple have individual cars and the cars need to be insured in order to
safeguard them from any sort of unprecedented events.
 Lee draws significant amount of salary annually and therefore needs to purchase
insurances that would be able to remunerate similar amount of money to his family
so that their financial scenario can be sustained.
 The other insurance objective has to safeguard their property where they reside so
that in case of any unprecedented events their children will and spouse would be
able to live properly.
 The need for insurance even revolves around the fact that the couple has an
outstanding mortgage for the house they have bought and in case of any
unprecedented events the liability to pay the mortgage would fall on their infant
children. Insurance would be helpful in paying the mortgage on their behalf.
Part 2
There are various problems that are pertinent with the death, disability or retirement of the
couple. These issues need to be highlighted so that the couple can make adequate changes in
their plans. There has been an observation that their children are infant and they require
sufficient amount of expenses with the help of which they can educate their children and can
create a healthy career for them. In case of death, disability and retirement of Lee, the permanent
income would be hampered and the family would face financial issues and therefore his plan of
educating his children and establishing a career for them would face problems. In the same
scenario if the same happens to Kate, then the level of financial issues would be lower but the

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dependency level would be higher on Lee and therefore he has to maintain various strategies
with the help of which the absence of Kate can be mitigated.
Lee works in a beer company and earns significant amount of salary with the help of which
the he can take care of his family and the associated expenses. Lee has the anticipation that few
years down the line he would even get promoted and his salary would increase. However, in case
of death, permanent disablement and retirement, this permanent source of income would cease
and thereby a huge amount of pressure would fall on Kate and her children. They would be
facing adverse financial problems. In case the employment of Kate is ceased due to retirement,
death and disability, the level of income would be hampered and she would not be able meet her
personal expenses and the investments made by her would diminish. Overall, her family would
face problems as well mentally and financially.
Lee and Kate have various assets and liabilities that are owned by them. In case Lee expires
or has permanent disablement, his permanent income would stop and thereby the investments
and the insurances purchased by them would have a serious impact due to non-payment of the
premiums. Lee has a mortgage loan for the purchase of the property where they reside and
therefore in case of permanent disablement and death the responsibility to pay the mortgage
would fall on Kate considering that their income level has fallen as well. In case of Kate, the
same issue is persistent as Lee would be burdened with extra responsibility to earn and pay the
mortgage and even taking care of their children single handed.
Kate and Lee have a mortgage on the house and have various investments in funds and banks
and therefore it is their obligation to take care of the same with the help of which the couple can
have a safe, healthy and peaceful life. Therefore, in case of death, retirement or disablement, the
obligations would fall on the family and repayment of the mortgage, additional payment in the

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investments would increase. The couple would not be able to undertake further investments as
well. Hence, this can have an impact on the financial position of Lee and Kate. The other
beneficiaries include the medical insurance in order to cover for any critical medical illness
which they may face as they grow older.
The couple have a retirement plan and have the objective of maintaining the similar lifestyle
even after their retirement. In case of disablement and death, there would be an impact on the
retirement plan as the savings that is being undertaken in the retirement savings plan would
either stop or decrease and thereby the savings amount for the future could be reduced.
Part 3
This section looks to provide the recommendations that could be given to Lee and Kate
with respect to insurance planning and retirement planning. There has been an observation that
Lee has various insurance and investments but the level investment and insurance can be
improved. It is recommended for Lee that he increases the tenure for the R&C term policy from
Sun Life. He can even increase the sum insured amount by 20% as with the advent of time there
will be rise in the cost of living and the educational expense of their children. The Group Benefit
Plan, of which Lee is a part, has coverage of his family and his children till the age of 21 or 25
years. However, Lee has to purchase an insurance that would cover the life of their children even
after they reach the age of 21 or 25 years. Both Wyatt and Sawyer need to have individual
insurance for them with the help of which they can have a secured lifestyle. Lee has another life
insurance over which a supplementary insurance is existent. The premium for this insurance is
paid by the employer. But the amount of money that is insured is significantly low as Lee has
three dependents. The amount needs to be increased in order to maintain the financial stability of
the family even after his death. Lee needs to have individual insurances for Kate as well as she is

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his wife and in case of any her death Lee can receive certain financial remuneration as well.
Maintaining individual insurance for everyone in his family is essential and therefore it is
recommended. Lee does have health care and dental care coverage that is included in the Sun
Life Assurance Company of Canada. But with the advent of time they would be growing old and
would need additional medical expenses and therefore Lee needs to purchase a medical
insurance which would remunerate for the medical expenses. In case of any hospital related
incidents Lee and his family would even receive cashless facilities and thereby would initiate
their treatment timely. Lee can purchase medical insurance from Sun Life as well that would be
covering his spouse as well so that every one of them is safe and secured. It is even
recommended that Lee undertakes a home insurance as the home they have purchased is
relatively new and they have mortgage pending as well. Therefore keeping the house insured can
assist in paying the loan back in case anything happens to the couple. The retirement plan that
Lee has can be improved as well as his income would increase and with time, issues related to
health.
There are product recommendations for Kate as well. Kate is a working woman and
looks to work full time once Sawyer starts going to kindergarten. She has the expectation that her
income would become double then. Hence, she can purchase insurance for herself that would be
inclusive of medical insurance as well. Kate can even think of purchasing retirement savings
plan so that in case of any mishaps between Lee and Kate, she can have an independent
retirement plan for herself. She needs to undertake various investments in RBC Financial Group
and thereby have her own savings as well. Both Kate and Lee have debts and therefore
investments that have to be undertaken should be inclusive of paying for the debts and the
mortgage that is existent for them.

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Part 4
The recommendations that have been suggested is affordable due to the fact that Lee has
significant amount of income and therefore this income would be significant enough with the
help of which further insurances can be purchased. Kate earns $ 24,000 annually and expects to
get her income doubled. Hence, with this level of income the two products recommended for her
can be purchased with ease.
The suggestions that have been provided is existent within the current cash flow by
adding in the expenses and adjusting the income that Lee and Kate receives. The adjustments
that have been made have been highlighted in the cash flow and these adjustments have been
made by reducing the expenses that are unwanted for the couple and their family. The reduction
in these expenses and the increasing their level of income can be useful for the development of
effective cash flow statement. This would even counter the additional insurances that would be
purchased. There are no recommendations in the restructuring of debt as the level of debt that is
present is precise and the payment amount is appropriate. The adjustments that have been made
in the cash flow statement has been highlighted in the table below and the changes have been
made in accordance to the new products that have been recommended. The assumptions that
have taken includes that the rate of interest is constant and there has been growth in the
investments and income growth.
Cash Flow Statement
Current Recommended
Particulars Lee Kate Total Lee Kate Total
Gross Income $ 83,500 $ 24,000 $ 107,500 $ 83,500 $ 24,000 $ 107,500
Canada Child Benefit $ 6,000 $ 6,000 $ 6,000 $ 6,000

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Car Allowance $ 3,600 $ 3,600 $ 3,600 $ 3,600
Premium for Insurance -$ 185 -$ 185 -$ 222 -$ 222
Premium for Disability
Coverage -$ 807 -$ 807 -$ 807 -$ 807
Contribution to Defined
Benefit Pension Plan -$ 10,020 -$ 10,020 -$ 10,020 -$ 10,020
Mortgage Payment -$ 4,428 -$ 4,428 -$ 8,856 -$ 4,428 -$ 4,428 -$ 8,856
Groceries & Pharmacies -$ 8,100 -$ 8,100 -$ 16,200 -$ 8,100 -$ 8,100 -$ 16,200
Property Tax -$ 2,400 -$ 2,400 -$ 4,800 -$ 2,400 -$ 2,400 -$ 4,800
Utilities -$ 2,250 -$ 2,250 -$ 4,500 -$ 2,250 -$ 2,250 -$ 4,500
Car Insurance -$ 1,080 -$ 1,080 -$ 2,160 -$ 1,080 -$ 1,080 -$ 2,160
Gas -$ 2,100 -$ 2,100 -$ 4,200 -$ 2,100 -$ 2,100 -$ 4,200
Clothing -$ 900 -$ 900 -$ 1,800 -$ 900 -$ 900 -$ 1,800
Entertainment -$ 1,800 -$ 1,800 -$ 3,600 -$ 1,800 -$ 1,800 -$ 3,600
Phone, Internet & Cable -$ 960 -$ 960 -$ 1,920 -$ 960 -$ 960 -$ 1,920
Home Insurance -$ 450 -$ 450 -$ 900 -$ 540 -$ 540 -$ 1,080
Group Supplementary -$ 60 -$ 60 -$ 75 -$ 75
RESP -$ 2,640 -$ 2,640 -$ 2,640 $ 2,640
Spousal RRSP -$ 2,400 -$ 2,400 -$ 2,400 -$ 2,400
Medical Insurance -$ 1,440 -$ 1,440
Net Cash Savings $ 46,520 $ 5,532 $ 52,052 $ 44,938 $ 5,442 $ 55,660

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Bibliography
Lynch, K.M., 2016. Solid risk management system should include insurance planning to protect
assets.
Parthemer, M.R. and Christie, J.C., 2016. Insurance Planning and the Possible End of Life as We
Know It: Low Interest Rates and Family Entity Discounts. Journal of Financial Service
Professionals, 70(4), pp.24-33.