Insurance Planning 

Table of Contents


Part A..

Question 1.

SWOT analysis:





Analysis of Goals and Objectives for the Family.

Question 3.

Section A..

Section B..

Section C..

Question 4 Strategy Paper

Question 5: Insurance Policy.

Question 6: Policy and Structure.


Introduction to Insurance Planning

This report is made while considering myself as a financial advisor for “St George Financial Planning Services Pvt Ltd” and analyzing Tim and Kate’s situation in June 2019 having an annual net income of $75000 which further divides in their expenses due to which they are unable to save efficiently by the end of year. The following report is based on financial need analysis of Tim and Kate jones in which we will analyze how Tim and Kate can manage their financial expenditures and we will do an insurance need analysis while trying to find out possible types of insurance and their relevancy to Tim and Kate’s situation. In this report we will do SWOT and SMART analysis for the given situation. We will try to figure out the ways Tim and Kate can save money and cope up financially with their situation.

Part A

Question 1

SWOT Analysis:


$110000 is a nice upper middle-class income which Tim earns. This can help Tim to invest more in insurance Moreover, he is having an ongoing job from which he earns and is not unemployed. Tim and her wife are both in good health same thing is with their children. Followed by that it is seen that both the parents have good track record of paying loans and because of financial liberty they can afford the school fees of their children and mortgage along with their living expenses, in addition to that they are not having loans on their credit card.


Looking into the weakness of the family Kate is occupied with looking after the children as they are all of young age. Tim on the other hand likes to drink and is habitual of it. Because of their high expenses they are not saving anything that can be problematic in Future. John’s 2016 Mazda 3 has remaining $12000 to pay for loan. They have a $600,000 mortgage with variable interest rates up to 4.5% for their house with no private health insurance. They spend around $15000 on their holidays.


Since Tim is an old employ of Telstra (his company) i.e. from 2000 which means he have a great hand on experience. He can apply for another job which may have a higher pay for him. As Kate was formerly a schoolteacher, she can start coaching classes at her home and can add up to Tim’s income and form a greater amount than before. Both of their kids go to school which surely creates a good time span for Kate to work in any school which offer her job according to her conditions. Their house is built on good location and after their loan is completed the price of house may raise which can prove to be a great opportunity for both to earn profits. They can invest their savings of $20,000 at some place where they are quite sure that they would earn profit. Both have their individual savings in Cbus and NGS can prove to be helpful for them in future.


Tim’s addiction to drinking can prove to be a leak in their savings plan. Having no health insurance is major threat because Kate is already at high pregnancy risk and any such carelessness may lead them to loss. Going and spending $15000 on a holiday is something which can’t be neglected. Both need to cut off such expenses which are not their immediate needs.

Analysis of Goals and Objectives for the Family

The goals of the family has to be based on SMART model that is specific, measurable, attainable, relevant and timely. Starting with that the family is Ensuring a net income of $70000 per annum is available to maintain living expenses which include $14000 in school expenses to last until children are of 21. Maintain a cash reserve of $20000. Planning for third baby in 2020 although Kate has complications. Ensure a net income of $70000 per annum is available to maintain living expenses which include $14000 in school expenses to last until children are of 21. Review current superannuation salary sacrifice contribution of $25000 per annum each into their respective superannuation funds.

Question 3

Section A

If they don’t have any insurance, any unseen circumstances could cause them money loss. Since Kate is already having complications in her pregnancy and in any further complication, she can have long term disability or even death and they won’t get any money for that. Not having insurance means less planning for future, less savings and more accountability in case of any incident (Brown & Goolsbee, 2017). Anyone from them can become ill due to disease, any robber can steal their car or car may become damaged in accident or any thief can clean up with their belongings from their house while they aren’t home. In either cases no one is accountable without insurance except for Tim and Kate.

Section B

Many things you see around you can be insured but in the case of client here are some of insurance policies they should have. As Kate is having complications in pregnancy, health and life insurance can be considered here for both. As described in client’s condition, they are owner of two cars and having their cars covered in vehicle/Auto insurance can prove to be helpful in case of accident. Having their house covered in insurance can be fruitful later in case of any mishap (Verhoef & Donkers, 2016). Another insurance that they could have taken is Long-Term Disability insurance which can be helpful for them if they get into a state of physical disability for long and in Kate’s condition this could also be possible

Section C

Insurance is a form of safety for your property or you may consider it as future savings. Life is always uncertain, and it throws surprises when they are least expected. Having any such situation can cause them financial problem not only for the person but also for their family (Lee, et al., 2017). Insurance companies invest our money for or benefit in future any not having insurance can be a missed opportunity (Beaver, et al., 2018). You can become tension free of things if they are insured because then in any case its whole responsibility is taken by company. Not having insurance prove to be financial loss in future.

Question 4

Strategy Paper

Term life insurances are easy to use for clients therefore rather more acquainted to perceived ease in understanding the logic of the insurance. These policies provide a generous and more robust coverage options ranging from $100,000 to several million dollars. Therefore the most beneficial insurance for this certain case can be medically underwritten term life insurance. Most significantly, while taking under consideration the pregnancy risk of Kate and the lack of savings annually recorded this insurance ensures that the family is medically restored even after the slightest mishap hence there are more complications and struggles faced by the clients during their untamable times (Gerber, 2013).

The pros of this product are rather the highlights of inclusivity and thorough gestures to ensure the right policies are presented for the customers. In addition to it’s accessibility and ease of usage these policies are latest for a set period therefore customers are not intoned to pay for policies they do not require (Rai & Medha, 2013). Medically underwritten term insurance policies ensure that enough financial assistance is provided so that clients are eased into debt payoffs, cover future costs hence construct a financial safety net.

On the contrary many couples are often hesitant in taking medical exams and questionnaires during such policy trials therefore this may cause a hindrance in the adoption of the insurance. Simultaneously, these insurances do not provide cash value components. Term insurance the premiums increase with the age of the client. Similarly, these policies are more advantageous for younger couples as their availability is stacked as when the client approaches 65 it becomes increasingly difficult for them to secure their termed insurance. Conclusively, the policy can manifest great deals for younger couples such that in the case (Lu, et al., 2014).

The full disclosure of remuneration of the product is that according to the case Tim and Kate want to ensure a net income of $70,000 and maintain a cash reserve of $20,000 therefore medically underwritten term insurance will cost them based on their age, lifestyle and gender. For instance, since Tim is a non-smoker he is attainable of $81.24 AUD on a coverage of $500,000 compared to a smoking male who would pay $166.64 AUD based on their life choices. Moreover, for medically underwritten term insurance the clauses included are; look free period where the policy owner can return the insurance and get a full refund if they are not satisfied by the policy. In addition to this, beneficiary clause allows the owner to name the recipient of the death benefactor (Akotey, et al., 2013).

Moreover, Spendthrift and survivorship clauses help the policy owner restrict their information regarding their beneficiaries of death benefits payoffs. Furthermore, the exclusions are rather the clauses that are not entertained by the company and the insurance officers hence no benefit is granted to the clients based on certain events and/or circumstances. For instance medically underwritten policies do not ensure benefits in the act of suicide and or dangerous activities. However, if the term insurance can cost more these are included on buyers request (Lee, et al., 2013).

Consequently since, Tim and Kate desire to ensure safety of their income amidst accidental events medically termed insurances can provide them health benefits therefore cover for their health recipients during their pregnancy endeavor which is filled with complications. Moreover, since this policy can be terminated at any point hence since Tim means to retire at 65 the couple will not be further charged for the coverage if they terminate the plan after his retirement. Since they are non-smokers they have to pay less on their coverage and acquire more benefits.

Question 5

Insurance Policy

The sole purpose of this life insurance policy is to be able to generate independently termed credentials that are important to the clients. These policies are often opted by families that only require insurances for a set period while they are still dependent on a solo income. Medically underwritten term insurance will help Tim and Kate during their pregnancy journey. Since the insurance managers will be provided detailed credentials and medical records certain benefits of well-being and health will be provided to them such as coverage of their medical prescriptions, coverage of surgical processes (if any) and/or death benefits on the passing of the carrier. Most significantly, the accidental health benefits will ensure the coverage of debts and mortgage for the family (Joly, et al., 2014).

The downfalls of not adopting this branch of termed insurance is that, for retirees other insurances are difficult to payoff however, since Tim has decided to retire at the age of 65 it would be easier for the family to pay the insurance taxation. Despite the non-smoker leverage Tim will have to pay a countered amount due to his age therefore the affordability of the policy plays a great role here. Without this policy the family would have restricted benefits that will not measure their prerequisite (Fier & Liebenberg, 2013).

Question 6

Policy and Structure

  • Sum insured

Sum insured is the amount of money that the life insurance company would have to pay on the occurrence of an event based on their policies.

  • Multiple policies/Stand alone

This rather the mixture of term policies and whole life insurance that pays off multiple face offs during the term life period and thereby turning into whole life policy period after the term life phase is over.

  • Hybrid

For Hybrid insurance policy holders they are detained to pay a wholesome amount of premium upfront or a guaranteed set of amount for a prescribed period. It works by combining the benefits of life insurance with long term care benefits.

  • Interim cover

It insures the clients while their application has been viewed or waiting an approval therefore simply removing any gap where they’ve been without a cover.

  • Waiting period

It’s the period where for the client no benefit is payable on certain procedures and services.

  • Benefit period

A benefit period is the time where the policy holder or their dependents may apply for coverage and/or file to receive payment for the insured policy. All insurance plans endorse such lengths of period dependent on their policy holder, policy type and insurance policy provider.

  • Superannuation coverage

These ensure that on the unexpected occasion of death of the policy holder their loved ones and/or dependent are accommodated accordingly through insurance plans.

  • Insurance inside/outside superannuation

Insurance inside superannuation can be only under dealt within 3 conditions which are Life, TDP (any occupation) and Income protection. These insurances have automatic acceptances and premiums are paid with pretax dollars so they are cheaper.

However, insurance outside superannuation the taxation is increased however the biggest benefit comes as profitability. There is immediate access to the benefits and policy holders get their benefits paid directly to them.

  • Replacement of product

This occurs when a new policy contracts and/or a new purchase is made however, the client discontinues paying for their old purchased plan hence it is forfeited and the new plan is revised on it’s account for the customer.

  • Basic or comprehensive cover

This is an optional coverage however; it covers for events that are out of the clients control such as vandalism, car accidents and theft.

  • Clauses and Exclusions

Clauses are what are included in the policy plans and are offered by the company while exclusions are what are not offered in the plan.

  • Definitions

These are the meanings of every statement and word used in insurance.

  • Optional Extras

These are some extra policies that are not in the plan but their adoption can help lower the financial burden. Although they make the plan expensive they are lifesavers.

References for Insurance Planning

Akotey, J., Sackey, F., Amoah, L. & Manso, R., 2013. The financial performance of life insurance companies in Ghana. The Journal of Risk Finance.

Beaver, W., McNichols, M. & Nelson, K., 2018. Management of the loss reserve accrual and the distribution of earnings in the property-casualty insurance industry. Journal of Accounting and Economics, 35(3), pp. 347-376.

Brown, J. & Goolsbee, A., 2017. Does the Internet make markets more competitive? Evidence from the life insurance industry. Journal of political economy, 110(3), pp. 481-507.

Fier, S. & Liebenberg, A., 2013. Life insurance lapse behavior. North American Actuarial Journal, 17(2), pp. 153-167.

Gerber, H., 2013. Life insurance mathematics. Springer Science & Business Media.

Joly, Y. et al., 2014. Life insurance: genomic stratification and risk classification. European Journal of Human Genetics, 22(5), pp. 575-579.

Lee, C., Cheng, H. & Cheng, H., 2017. An empirical study of mobile commerce in insurance industry: Task–technology fit and individual differences. Decision Support Systems, 43(1), pp. 95-110.

Lee, C., Lee, C. & Chiu, Y., 2013. The link between life insurance activities and economic growth: Some new evidence. Journal of International Money and Finance, Volume 32, pp. 405-427.

Lu, W., Wang, W. & Kweh, Q., 2014. Intellectual capital and performance in the Chinese life insurance industry. Omega, 42(1), pp. 65-74.

Rai, A. & Medha, S., 2013. The antecedents of customer loyalty: An empirical investigation in life insurance context. Journal of Competitiveness, 5(2), pp. 139-163.

Verhoef, P. & Donkers, B., 2016. Predicting customer potential value an application in the insurance industry. Decision support systems, 32(2), pp. 189-199.

Remember, at the center of any academic work, lies clarity and evidence. Should you need further assistance, do look up to our Financial Accounting Assignment Help

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