To anyone willing/wanting to discuss the assignment for Kaplan RM: Case 1. Note: I am not looking for the answer to the question/case. But I do have a few questions / issues I would like to discuss. 1: There is no mention of her husbands income. Are we to assume that he does not work (just study and child care). 2: There is no mention of the value of the unit that they live in. I'm assuming that the value is irrelevant to the answer they are looking for (hence selling is not an option). 3: There is no mention of how muh the loan on her shares are costing her. Unless this is included in the 280,000 mortgage on her investment property (as she owes nothing on the unit they live in). 4: In determining the amount of life insurance required, the workbook tells us to calculate what is required to send the CHILD through to university, however her husband is also studying. Am I to assume that should she fall ill/die that the insurance should not cover his educational expenses? Case study 1 Simone is 35 years old, married, and lives with her husband and one year-old child in their three bedroom inner-city unit. There is no mortgage on the unit; it is fully paid off. Her husband is studying part-time, and when not studying he looks after their child. Simone’s 65 year-old mother looks after the child when the husband is at uni. Simone is employed as a senior accountant earning $145,000 p.a. plus an annual bonus, which is dependant on the revenue she brings into her firm. Last year she received a $20,000 bonus and the previous year $23,000. Last year she was offered a 10% equity stake in the business for $300,000; she borrowed the full amount to buy the shares. These shares are currently valued at $450,000, however she still owes $250,000 of her original loan. Her employer provides her with basic term life and TPD cover at 1.5 times her base salary. This is provided through the employer-funded superannuation fund. Simone gives her mother an allowance of $400 per month and plans to continue to assist her mother in this way until her mother’s 85th birthday, or she is put into a nursing home, or she passes away. Simone leases a Mercedes Benz sports coupe, for which she pays $1,100 per month. Her other main expenses are commitments on a two-bedroom unit in the inner city and household expenses of $3,000 per month. She has a mortgage of $280,000 and monthly repayments are $2,500. She currently rents out the unit for $1,200 per month. Rates and body corporate fees are $4,200 per annum. Her annual household expenses are $36,000. Simone has no other debts. As Simone’s adviser, outline the recommendations you would make to her regarding life insurance and general insurance needs. Provide a brief explanation of each insurance you recommend, the amount of cover and your reasons for these recommendations. For income protection you must provide waiting and benefit periods and your reasons for recommending those particular periods.