Financial Planning Report: Insurance and Risk Management Analysis

This report, prepared for a financial planning consultant, analyzes the insurance needs of a client, Jordan and Jamie Kennedy, based on their current financial situation and goals. It examines their existing insurance policies, including life and health insurance, and assesses their adequacy. The report then provides detailed recommendations for improving their coverage, including suggestions for income protection, private health insurance, and additional life insurance policies. The recommendations are tailored to the client's specific needs, considering their income, expenses, and future financial objectives. The report also includes a need-based analysis, comparing the client's assets and liabilities to determine the appropriate level of insurance coverage. Finally, it suggests specific insurance products and providers, like Virgin and AIA, and explains their benefits to ensure the client's financial security. The report concludes by encouraging the clients to review the suggestions and seek professional assistance.

Running head: INSURANCE AND RISK MANAGEMENT
Insurance and Risk Management
Name of the Student:
Name of the University:
Author’s Note:

1
INSURANCE AND RISK MANAGEMENT
Table of Contents
Introduction......................................................................................................................................2
Scope of Advice...............................................................................................................................2
Current Scenario..............................................................................................................................3
Recommendation.............................................................................................................................4
Reference.........................................................................................................................................8

2
INSURANCE AND RISK MANAGEMENT
Introduction
As per information sheet which is provided by you, Jordan and Jamie Kennedy,
effectively shows your current situation. Considering your requirement, you require advice on
insurance policies which are undertaken by your family. In order to effectively understand your
needs and suggest alternative options which are available to you, we would be analysing your
current scenario as provided in the fact sheet and also the products which are available in the
market.
Scope of Advice
The advice which I would be providing would be based on the information which is
provided by your considering your requirements and long-term objectives. I would be assessing
the situation which is stated in the fact sheet thoroughly and on the basis of the same advice
would be provide in order to suit the best interest of the clients. In addition to this, the scope of
the advice would be limited to insurance products and certain areas of concern where you require
advice. It is also to be noted that the recommendations and alternative advices which is provided
by us is based on current scenarios and if the same is to be implemented after a month period
than certain revision needs to be done considering any changes which might take place in the
market.
Current Scenario
As per the fact sheet provided by you, both Jordan and Jamie are engaged in their
respective occupations. As per the information which is provided by you, Jordan you are
engaged as a high school teacher with an annual salary of $ 59,000 and Jamie, you have a
profession of a web designer and you do not have fixed salary. The average salary which is
drawn by you Jamie considering the current year is shown to be $ 66,000 in the fact sheet. The

3
INSURANCE AND RISK MANAGEMENT
current expenses of the family along with different expenses which needs to be incurred by the
management of the company would also be considered for taking a better analysis of the
situation of the clients.
Jordan, you have group term life insurance for $60,000 which is paid by the school district
while Jamie has whole life insurance policy for $ 25,000 which was set for birth. You have also
taken insurance products worth $ 35,000 for each your children. As per the planning of Jordan and
Jamie, the insurance policy which is undertaken for two children would also be helpful in their future
education planning. As per the current situation, both of have accumulated a combined savings of $
6000 in your savings account for emergency cases. In consideration of health insurance, your
employer provides a medical insurance plan which has a maximum contribution from your end of
about $ 5000. On the other hand, Jamie you have brought an AFLAC cancer policy for $ 50 per
month and an accident-only health insurance policy for $45 per month. The fact sheet also has car
insurance policy which effectively provides coverage on both the vehicles which is owned by you.
It is to be noted that on the basis of these scenario, I would be farming the advices which
could meet your best expectations and would be ensuring all your objectives are effectively met.
On the basis of the information which is provided in the fact, I am able to understand you need to
advice and amendment in the following aspects which are provided below:
 Jamie, you would be requiring a better life insurance policy for meeting the current needs
and expectations.
 A better medical insurance policy needs to be implemented for Jordan which is provided
by the employer.
 In addition to this, I would also be suggesting some insurance product which would
secure earnings and would help in meeting your current standard of living.

4
INSURANCE AND RISK MANAGEMENT
Recommendation
In order to effectively meet the requirements of the clients, I would be following a need-
based approach for ascertaining whether the current insurance policy cover which you posses are
appropriate or not. The need-based approach for estimating the insurance coverages requires to
effectively consider your needs such as mortgage and any other debts, as well as child care,
education and living expenses. On the basis of the same, I would be evaluating whether the
current coverage is appropriate or not. The need approach situation for the client is effectively
shown below in details:
Need Analysis Statement
What You will Need Jordan Kennedy Jamie Kennedy
Cash Need
Escrow Account Contributions 1341
Funeral Costs 0
Uninsured Medical Bills 0
Household Expenses
Utilities 5400
Food 7200
Insurance 1440
Entertainment 3600
Income Needs
Sepcial Needs
Mortgage Redemption 118000
Account emergencies 6000
Student Education loan 4800
Car loan 4140
Total needs 151921
What you have
Mutual Fund 47789
Credit card balances 10800
unendorsed HO-3 policy 130000
AFLAC cancer policy 600

5
INSURANCE AND RISK MANAGEMENT
accident-only health insurance policy 540
group term life insurance 60000
Children Insurance 70000
Total Asset 318589 1140
Difference 166668
The above situation effectively shows the needs of the client individually and combined
and the table which is provided above shows that total assets and needs of the clients. The table
which is shown above effectively shows the different type of insurance funds which is
undertaken by Jordan and Jaime. The analysis would be showing the fund requirements for the
clients. As per the table which is shown above, the clients are effectively cover by appropriate
policies but still I would like to suggest some strategies which effectively contribute to securing
the life style of the clients.
I would be suggesting an income protection policy which would effectively help you in
meeting your current expenses and managing your affairs appropriately. Income protection
insurance, also known as salary continuance, can help you manage your expenses if you are
unable to work for a certain amount of time. The income protection policy would provide a
coverage of 75% on an average on the gross wages which is earned by you. This would be
securing your expenses and effectively maintaining a proper standard of living. The product I
would be recommending is Virgin income protection product which I think would appropriately
meet your needs and secure your future revenue. The special features of this product are that it
would cover 85% of your income and the maximum benefit on monthly basis is $ 10,000 for the
product. The product provides the best coverage in terms of income and also has benefit period
which is of 5 years. This is recommended by me as in case of any serious injury or death of any
of you happens, then such a policy would effectively contribute to monthly earnings and
effectively help in meeting expenses of the family.

6
INSURANCE AND RISK MANAGEMENT
I would be like to suggest a medical insurance for Jamie which is Medibank insurance
product. This is a private health insurance product which would effectively serve your interest.
Private health insurance can help you pay hospital and medical costs not covered by Medicare. In
some cases, you can receive treatment sooner by electing to be treated as a private patient. The
things which are required to be considered in a private health insurance policy is the things
which are included and excluded from the policy and ensure whether the same serves your
interest effectively or not. The product provides the best features for single as well as family
cover. It is up for your opinion whether you want to opt for singles cover or family cover. The
products which is offered would be providing 60% health claims. This product would effectively
meet your requirements. As per the fact sheet, both of your health is appropriate but it would be
better to secure your health and therefore I have suggested the product. I am suggesting this
product as I have review the market effectively and the results are mostly positive and in most of
the cases, I have found that maximum of the people are satisfied with the product which means
that product is efficient. I believe that the product would meet your expectation and appropriate
provide coverage for your health.
I would also like to advise Jordan to take a life insurance policy as I am of the opinion
that the life insurance policy which is provided by the school would not be enough to meet your
requirements. Life insurance protects you or your family from financial difficulty after an
unexpected event, like an illness and injuries and even death. It is essential that the cost of
premiums for life insurance and the benefit which is provided by the product is considered
before investing in the same. There are variety of insurance policies which is available to you
with unique features. Some of the insurance which are preferred by most of the people are
trauma insurance, medical insurance, Total and permanent disability insurance and life coverage

7
INSURANCE AND RISK MANAGEMENT
insurance. I have already suggested you regarding income protection insurance and medical
insurance which I believe would be enough for you. I would be suggesting to you guys to
consider AIA Priority Protection product as the same is regarded as one of the best options which
is available in the market. The product provides life coverage, 10 years coverage and 5 years
coverage which also have appropriate benefits which I am sure would be meeting your
requirements. Some of the main benefits which are associated with the product is that it has a 28
days cooling period which allows you to consider all the possibilities of the product and ensure
that the same effectively meets your needs. The product provides unlimited coverage for certain
categories of occupations which is a plus point of the product and it also provides an amount of $
25,000 for funeral costs which is quite high these days. In addition to this, the product
appropriately helps to maintain the standard of living of the family and it is also regarded to have
lower premium rates depending on the nature of policy which is selected by you guys.
Therefore, on the basis of the current situation I have suggested the following products as
an option for Jordan and Jaime. I would recommend you to carefully consider my advice on the
different products which I have suggested and revert back to me in a week time whether you
want to proceed with my advice. In case you do, I would set up meeting with brokers and take
care of the formalities which is needed to be done from your end. I am sure that the products
which is suggested by me would be appropriate to meet up your requirements and meet your
expectations.

8
INSURANCE AND RISK MANAGEMENT
Reference
Fletschner, Diana, and Lisa Kenney. "Rural women’s access to financial services: credit, savings,
and insurance." Gender in agriculture. Springer, Dordrecht, 2014. 187-208.
Baker, Tom, and Peter Siegelman. "You Want Insurance with That; Using Behavioral
Economics to Protect Consumers from Add-on Insurance Products." Conn. Ins. LJ 20 (2013): 1.
Buchmueller, Thomas C., et al. "Preference heterogeneity and selection in private health
insurance: The case of Australia." Journal of Health Economics 32.5 (2013): 757-767.
Biagini, Francesca, and Irene Schreiber. "Risk-minimization for life insurance liabilities." SIAM
Journal on Financial Mathematics 4.1 (2013): 243-264.