Financial Plan For Insurance

Case 3: Insurance

Review the Case 3 PDF and attach a one-page written executive summary as if you were a professional adviser writing to the client. Research all the issues/needs/questions the clients have and summarize the pertinent assumptions, case facts, and findings. This executive summary should include specific and actionable recommendations.



FINANCE 6080 Case #3

Ned and Nelly Normal

Ned is a pilot and Nelly a school teacher. They have 3 children—all daughters. Kris is 23 and single,

graduated from college and working. Olivia is 20 and half way through college, studying engineering.

Ellie is 13, an 8th grader. Ned will be required to retire at 65 and Nelly plans to work through 65, as well.

Both are currently 50 years old. They would like to maintain their same lifestyle in retirement.

Assume the same facts as Case #1

Ned has a Whole Life Policy of $500,000. His premium is $623 each month. The Whole life policy has a

cash surrender value of approximately $58,000. He also receives 2X his salary in life insurance through

work, but has an option to pay for an additional 5X his salary. Nelly has no private insurance, but does

have a 1X life insurance coverage through the School District. They both have disability coverage

through work that covers them at 60% of salary through age 65 if either of them is disabled.

The Normal’s have the following questions:

1. Do they have enough life insurance coverage on Ned? If not, how much should they consider

and what type? Restructure existing insurance? Why?

2. Do they have enough life insurance coverage on Nelly? If not, how much should they consider

and what type? Why?

3. Should they consider purchasing supplemental disability insurance?

4. Should they purchase Long Term Care insurance? What factors should they consider? Although

you may want to do an analysis, it is not required…just an opinion is okay on this one.

5. What other risk factors or insurance issues do they face? What would you advise them to

consider or review?