Insurance Accounting

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Sam and Susan Scully have come to financial planner Lissa Cardenas to ask about the adequacy of their life insurance coverage. They have two children ages 4 and 2. They are each 35 years old. Sam works full-time in a management position in a manufacturing company. He earns $95,000 p.a. and does not expect further promotions, but does expect his salary will keep pace with inflation. His take home pay is $70,000 after all deductions. Susan spends much of her time as a homemaker, but she earns $15,000 p.a. in part-time jobs, which is also her take home pay. She expects she will continue to do that in the future. They plan to retire when Sam reaches age 65.

They would like to continue to support the children for the first few years after high school; they are saving a small amount every year in an RESP for them. The balance in the RESP is now $10,000. They live in Wawanesa, Manitoba. They also have $40,000 in TFSAs, $10,000 in bank accounts and $4,000 in an RRSP. Sam will get a reasonably good employer pension, but Susan will get only CPP when she retires. If Sam predeceases her, she would get a top-up of CPP that would take her to the maximum CPP. They own their own home in Wawanesa, Manitoba, with a mortgage of $200,000 and an estimated market value of $400,000. They pay off the credit cards completely every month and have no other debts. Their budget is balanced, but after paying normal living expenses, the mortgage and small contributions to the RESP and $5,000 to the TFSA, they will not have money for much else. They are in excellent health and do not smoke.

Susan gets no benefits from her work, other than the mandatory employer contributions to CPP. In addition to the pension plan, Sam has good extended health care insurance and life insurance worth two times his salary, from the employer. His employer has a long-term disability plan and Sam pays the premiums for a benefit of 65% of his salary if he is unable to perform his existing job. They would have to pay $10,000 p.a. to replace the employer benefits. Sam also has a whole life insurance policy with a face value of $100,000 and a cash surrender value of $6,000.

They own only one car because Sam doesn’t need a car for his work. It is insured for $200,000 liability, collision, theft and accident, with a deductible of $100. The house is insured for $100,000. The insurance company estimates that the land is worth $80,000 of $250,000 market value. The deductible is $100.

Required:

a)Estimate their requirement for additional life insurance using the income method and the expense method. Recommend how much additional insurance they need and what kind they need. Use a discount rate of 3% and assume all the expenses and income are constant.

b)Analyse their other insurance needs, keeping in mind the basic risk management process. Recommend other additional insurance coverage they need or can reduce or cancel, and estimate how much they need.

Sample Solution

Emily Dickinson’s Poem 67, Poem 1036, and Poem 870

Emily Dickinson’s Poetry 67, Poetry 1036, and Poetry 870 The need and loss of Emily Dickinson frequently implies the misfortune and misfortune in her sonnet. In any case, it isn’t viewed as carefully negative. In any case, it is viewed as inescapable. In any case, it isn’t really inescapable from a negative perspective. It is viewed as in some cases important to get life. There is by all accounts an overall topic that is a piece of losing life. This topic can be found in the audits of sections 67, 1036, and 870. Verse 67 is a genuine case of the depiction of Dickinson’s nonappearance being certain.

Emily Dickinson’s Poetry 422 Emily Dickinson reveals to her demise at her verse number 422 which is the subject of her work. This sonnet clarifies the passing of a lady when she kicked the bucket and the sentiments of the encompassing individuals when the lady kicked the bucket. The principal line of this sonnet is extremely intriguing. Dickinson utilized the “most recent night she used to live” rather than the night when she was dead, as a great many people clarify this. This underlines the life of the dead and her life. – Percy Bysshe Shelly is the meaning of a sentimental writer. His philosophical way of thinking stresses the significance of feel and his sonnet obviously speaks to the excellence and grandness of nature. In the same way as other of his sentimental associates Shelly’s own life is short, lamentable and languishing. Before he was thirty, he suffocated in a paddling mishap.

Emily Dickinson’s Poetry 67, Poetry 1036, and Poetry 870 The need and loss of Emily Dickinson regularly implies the misfortune and misfortune in her sonnet. All things considered, it isn’t viewed as carefully negative. Be that as it may, it is viewed as inescapable. In any case, it isn’t really inescapable from a negative perspective. It is viewed as some of the time important to get life. There is by all accounts an overall topic that is a piece of losing life. This subject can be seen when considering refrains 67, 1036, and 870. – Money and satisfaction Edwin Arlington Robinson expounded on an individual who composed all the sonnet “Richard Cory”, or such an individual (McMahan). Richard Corey is carrying on with an exceptionally perfect life, everybody needs to resemble him. At the point when you see him, you are brimming with shame and intrigue. All that he did was immersed on the top page and appeared to be an upbeat individual. Be that as it may, this artist closes with the disastrous misfortune of Richard Core’s self destruction

“Tell each fact, however state it is a pattern” is the 1129th sonnet of Emily Dickinson’s finished sonnet. It was immediately viewed as a sonnet by Emily Dickinson. Run, utilize the type of four lines of verse, described by a message style nearly. In any case, does it signify “come clean with all, however does it say that there is a propensity”? The accompanying straightforward investigation attempts to address this inquiry. What is the significance of this short and reasonable verse? Generally speaking, Dickinson said we should come clean – all reality – however in a roundabout way it is contorting near. She said that the fact of the matter is astonishing to the point that we can not manage it at the same time. We can suffocate by it. In the second segment I will present the representation of this refrain. Lightning and rainstorms clarify in an all the more well disposed way (“control”) so as not to alarm kids. Dickinson reasoned that the reality can make us dazzle in the event that it is excessively immediate.

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