3-2 Final Project Milestone One: Draft of General Contract Provisions, Personal Liability, and Life Insurance Plans
FIN 355 Milestone One Case Study
John and Jenny want your help in evaluating both their insurance needs and the insurance coverages they already have. Below is information they have provided for your analysis.
Demographics
Family Members Age Occupation Health
Jenny 34 Dental assistant Treated for mild depression. 5'4", 135 pounds. No other health issues.
John 36 Sales manager Treated for high cholesterol. 6'1", 186 pounds. No other health issues.
Emily (Child) 10 4th grader No health issues
Tiffany (Child) 8 2nd grader No health issues
Incomes
Family Income
Year John Jenny
2013 $64,000 $42,000
2014 $67,000 $44,000
2015 $71,000 $47,000
2016 $74,000 $50,000
Table 1: Income for the past three years and projected current year income for each spouse
Life Insurance
John: John is the insured and the owner of a $250,000 fifteen-year term policy from Banner Life. Issue date: 8 years ago. The policy has 7 years remaining until maturity. Jenny is the primary beneficiary, while Emily and Tiffany are the secondary beneficiaries.
John has employer-provided group term insurance equal to one time his annual earnings of $74,000. Jenny is currently the only beneficiary. Jenny: Employer-provided group term insurance equal to one time her annual salary. John is the primary beneficiary, while Emily and Tiffany are the contingent beneficiaries.
Auto Insurance
2011 Toyota Camry John’s vehicle for driving. Owned JTWROS with Jenny. 25/50/15 PL/PD with $3,000 PIP. $500 collision deductible and $250 comprehensive deductible.
2014 Chevy Tahoe Jenny’s vehicle for driving. Owned JTWROS with John. 25/50/15 with $3,000 PIP. $500 collision deductible and $250 comprehensive deductible.
Homeowners Insurance
Dwelling (FMV) $360,000
Other structures $36,000
Personal property $216,000
Additional living expenses $72,000
Personal liability umbrella $100,000
Medical liability $5,000
Deductibles for all covered perils: 1% of dwelling coverage.
Additional Client Goals/Notes
John and Jenny would like both daughters to have four years of school funded at the local state
university if one of them should die. They estimate the annual cost to be around $15,000 a
year.
John and Jenny both agree that if either spouse died, they would need their life insurance to
replace the departed spouse’s income until both children are past the age of 21.
John and Jenny currently have a mortgage of $350,000 and would want the home paid for if a
spouse passed away. The home is probably worth close to $500,000.
John and Jenny do not carry any other debt of consequence.
John and Jenny have a nice-size savings account with around $40,000 and a 401K through
John’s work that has a balance of $265,000. Jenny does not have a retirement account.
John and Jenny recently added a trampoline in their backyard that the neighborhood kids like
to play on in addition to adopting a medium-size dog to keep the girls company.