Risk Management Case Study: Analyzing Wealth Protection Strategies

This case study focuses on a family's need for a wealth protection strategy, highlighting the importance of risk management in financial planning. The case involves a couple, Ronnie and Sue, with three children, facing the decision of renovating their house and taking out a loan. The primary breadwinner, Ronnie, has a high-paying job, but the couple is concerned about income security. The study explores the couple's current insurance situation, their need for additional coverage, and the development of risk management objectives using the S.M.A.R.T. framework. The objectives include maintaining their standard of living, securing income through insurance, ensuring the children's future, and securing the loan for house renovation. The case emphasizes the significance of insurance in safeguarding the family's income against unforeseen events and securing their financial future. It underscores the necessity of insurance to protect their assets and income, ensuring their children's future and their ability to meet financial obligations, particularly the home renovation loan. The case highlights the importance of financial planning for middle-aged couples with dependents and the role of insurance in mitigating financial risks.

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

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RISK MANAGEMENT
Wealth Protection Strategy
This current case study deals is in respect to Ronnie and Sue who are middle aged and
have three children namely Robbie who is 5 years old, Ava who is three years old and Maya who
is four months old. They have been residing in New Farm in Brisbane. It is seen that Ronnie
functions full time and works as a senior business analyst and earns $220,000 that is inclusive of
the super. On the other hand, his wife Sue is primarily functions household duties and she
functions part time on a contract basis as a consultant engineer and earns 16 hours per week in a
government agency. It is seen that Ronnie has a stressful job and as he has an increased salary
the couple are in the idea of renovating their house. It is due to the fact that the couple are in the
idea of taking a loan so that they can renovate their house. It is seen that the lending officer asks
them whether the couple have adequate insurance or not and it is seen that the couple have Life,
TPD and Income Protection Insurance coverage in their superannuation fund but they do not
have any idea about the amount they have invested in the insurance coverage. As primarily the
whole family is dependent on the income of Ronnie, it is seen that the couple requires to take
adequate insurance coverage as in case of stoppage of income of Ronnie, the family would not
be able to meet their commitments. Therefore, the couple have undertaken an appointment with
the financial consultant so that effective wealth protection strategy can be undertaken with would
be influential for saving their money and this would maintain their level of income and lifestyle
in case their income level ceases.
The wealth protection strategy of the couple is inclusive of the risk management objectives
that is constructed with respect to the S.M.A.R.T that includes the establishing specific,
measurable, achievable, and relevant and time sensitive. The risk management objectives are

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constructed with respect to the S.M.A.R.T and it is seen that the risk management objectives of
the couple have been provided below:
 Increasing the income of the couple effectively with time so that they can maintain their
standard of living and have a healthy life
 Recommend insurance plans to the couple that would be effective in maintaining the
level of income in case of unprecedented events.
 Increase their level of income so that the future life of their children can be insured and
can have a secured and healthy life and even have their future education secured.
 Maintain security of their income so that their loan can be granted from the bank with
respect to the renovation of their house.
The priority of the objectives has been to gain the loan from the bank for the purpose of
renovation of their house and indirectly this has led to the purchase of adequate insurance
coverage so that effective security of their income can be maintained in case of any
unprecedented events.
The couple have found it significant for considering insurance as a part of their entire
financial plan due to the fact that the couple have three children who are minors and they need to
secure their income so that the future of their children would be secured. It is seen that
undertaking the insurance would safeguard their income because in case of any unprecedented
events, their spouse and their children can be financially compensated by the insurance
organization. The couple are middle aged and therefore have sufficient amount of life left and
therefore needs to make accumulate certain amount of income with the help of which they can
have sufficient amount of income for their future. The income security with the help of the
purchase of the insurance would be influential for granting loan from the bank.