Written and Verbal Presentation of Risk Management and Insurance Plan

Part A

Prepare and submit a written risk management and insurance plan for Maya and Amir Hope
(case study begins on Page 2), a couple who have been referred to you by a current client. Your
report should include:

A title page
Appropriate disclaimers
A letter of engagement
A Summary of the clients goals, needs and your recommendations
Personal information for the clients and the assumptions used in the plan
A section on Financial Management, including a current net worth statement and a cash
flow statement based on the projected cash flow of the clients (including the cash flow
related to achieving their goals and needs)
A section on Risk Management, including:
o A summary of the clients current situation
o A needs analysis in the event that either of the clients dies prematurely or
becomes disabled
o A discussion of the options, including the advantages and disadvantages or
benefits and risks, that may improve the clients current situation and help them
meet their risk management and insurance goals and needs
o Recommended actions supported by analysis

800 words

RFC124 Written and Verbal Presentation of Risk Management and Insurance Plan Fall, 2017
 Maya and Amir Hope Case Study

A New Baby as the Catalyst for Reviewing Risk Management Plans and Insurance
Maya and Amir Hope, a married couple, were referred to you by one of your current clients.
Their friend suggested that with the birth of their baby, Sonya, earlier this year, they should
consider reviewing their risk management plans in the event that anything negative should
befall their family.
Personal Information

After graduating from university, Maya (born January 30, 1985) and Amir (born February 22,
1985) met one another while they were both attending teachers college. They married four
years ago and Sonya was born 11 months ago (November 1, 2016).
Employment Information
Both Maya and Amir are high-school teachers. Maya teaches English, French and Spanish. Amir
teaches history and math. Maya and Amir each earn $60,000 per year (after-tax).
Retirement Planning

The couple would like to retire at age 60 with an annual income of $100,000 after-tax (in
todays dollars). They both have excellent defined benefit pension plans through their school
board. The expected income from their employment and government pension plans is expected
to meet the majority of their retirement needs. You have determined that they will need to
fund $10,000 of the $100,000 (in todays dollars) annual income that they will need to meet
their retirement goals. The couple has no RRSP contribution room available given their pension
adjustments. Neither has ever contributed to a Tax-Free Savings Account (TFSA).
Education Planning
Maya and Amir would also like to ensure that Sonya has the opportunity to attend post-
secondary education in 17 years. The current cost of a four-year post-secondary education is
currently $15,000 and inflation for education is expected to be 5%. They have not established a
savings plan for this goal yet.
Risk Management and Insurance Planning

The couple have stated that they want to ensure that they can maintain their lifestyle and fund
their goals, particularly Sonyas education, in the event of either of their deaths.
Maya and Amir both have group life insurance through their employer, amounting to two times
their respective gross salaries of $90,000 each. They also have disability insurance. Their short-
term disability is funded by the school board and provides 100% of their salary for three
months using an own occupation definition of disability. Their long-term disability coverage
pays 70% of their net pay for the remaining period up to two years using an own occupation

RFC124 Written and Verbal Presentation of Risk Management and Insurance Plan Fall, 2017
definition of disability, followed by an any occupation definition for any period until their
retirement that they remain on long-term disability. The couple also have health and dental
benefits that covers them and Sonya for all of their health and dental needs.

Financial Details

The family live in a house worth $500,000. They have a mortgage balance of $365,000 at an
interest rate of 4% with monthly payments of $2,000. Their property taxes are $4,800 per year.
Maya and Amir both have student loans at an interest rate of 5%. Mayas current outstanding
balance is $20,000, while Amirs is $30,000. They each pay $500 per month towards the debts
and look forward to them being paid off. They also have a car loan with $14,000 remaining on
it.
The couple tries to maintain $5,000 in their chequing account each month after all of the bills
have been paid. They have $10,000 in a joint savings account that they maintain for emergency
purposes. They contribute $250 per month to the account to help build up their emergency
reserves. They also have accumulated $30,000 in a savings account which they will be using
next month to purchase a second car. The current vehicle that they use to drive to work
together is worth $15,000.
Maya and Amirs largest expense after their mortgage and property tax payments is Sonyas
expected $1,200 day care costs that will start later this month when Maya returns to work. The
couple also has monthly expenses of $100 for home insurance, $300 for car insurance, $400 for
a car loan, $300 for operating expenses related to their cars, $100 for heat, $100 for hydro,
$100 for water, $200 for telephone, internet and cable, $400 for food, $100 for clothing, $400
for vacations and $300 for entertainment. The couple also provide $1,000 per month to Amirs
mother who has had tough times making ends meet since her husband died.
Risk Profile
Both Amir and Maya agree that they are comfortable with taking on risk to grow their money
for their retirement and Sonyas education. Based on your discussion with them, they are
comfortable investing in 30% Canadian equities, 30% U.S. equities, 30% international equities
and 10% fixed income. They believe they can invest for an annual fee of 1%.
Health

Amir and Maya are both healthy. Neither of them smoke. They do enjoy a glass of wine with
dinner twice a week, usually on the weekends. Prior to being off on maternity leave, Maya
frequented the gym three times per week. She hasnt been as committed during her time away
from work, but is planning to re-commit herself once she returns to work since they gym is on
the way to school. Although he knows he should exercise more, Amir engages in physical
activity once a week when playing volleyball in a local sports league.
Amirs father passed away three years ago from a heart attack when he was in his early sixties.
Mayas mother, age 58, is currently undergoing chemotherapy for breast cancer.
RFC124 Written and Verbal Presentation of Risk Management and Insurance Plan Fall, 2017
 Attitudes about Risk Management and Insurance
When they purchased their house last year, the advisor at the bank offered Maya and Amir the
opportunity to cover their mortgage debt with mortgage life insurance. The couple said they
wanted to investigate the options further, since one of Amirs friends told him that he set up a
personal life insurance policy to cover his mortgage debt, while one of Mayas friends told her
that they used the banks insurance protection to cover their mortgage debt. They have yet to
investigate either opportunity. Having never purchased any life or living benefits insurance
policy before, Amir and Maya are unsure of the costs of insurance. They have heard that it can
be quite expensive. They wonder if it would be better to save the money they would spend on
insurance premiums and self-insure themselves by keeping it in an account and drawing upon it
when needed.

See grading rubric on the pages below

RFC124 Written and Verbal Presentation of Risk Management and Insurance Plan Fall, 2017
 Written and Verbal Presentation of Risk Management and Insurance Plan Rubric
Part A: Written Risk Management and Insurance Plan
Criterion
Identification of
Appropriate
Information
Analysis of Issues and
Opportunities and Evaluation
of Options and Alternatives
Strong
Demonstrates a sophisticated
understanding of the main
issues of the case.
Identifies the clients goals,
needs, attitudes, appropriate
assumptions, and qualitative
and quantitative data required
to complete the plan.
Presents a thorough analysis of
the issues and opportunities that
are included in the case.
Presents a balanced,
reasonable and objective
evaluation of options that are
in the case.
Average
Demonstrates a solid
understanding of most of the
main issues of the case.
Identifies most of the clients
goals, needs, attitudes,
appropriate assumptions, and
qualitative and quantitative
data required to complete the
plan.
Presents a strong analysis of
most of the issues and
opportunities that are included in
the case.
Presents a balanced, reasonable
and objective evaluation of most
of the options that are in the
case.
Acceptable
Demonstrates an acceptable
understanding of most of the
main issues of the case.
Identifies an acceptable number
of the clients goals, needs,
attitudes, appropriate
assumptions, and qualitative
and quantitative data required
to complete the plan.
Presents an acceptable analysis
of the issues and opportunities
that are included in the case.
Presents a balanced evaluation
of the main options that are in
the case.
Needs Improvement
Fails to demonstrate an
acceptable understanding of
most of the main issues of the
case.
Fails to identify an acceptable
number of the clients goals,
needs, attitudes, appropriate
assumptions, and qualitative and
quantitative data required to
complete the plan.
Presents a superficial or
incomplete analysis of the issues
and opportunities that are
included in the case.
Presents a superficial or one-
sided evaluation or an
evaluation of a limited number
of the options that are in the
case.
Effectiveness of Presents recommendations that
Recommendations will improve the clients
situation and supports
recommendations with
convincing arguments.
Structure of Plan Plan is structured and flows
well; contains logical
sequencing and all of the
appropriate sections and
information required of a risk
management
plan.
Professionalism of Plan The plan is presented
professionally with no errors
in spelling, punctuation,
grammar or syntax, making
the plan easy to read and
understand.
Presents most of the
recommendations that will
generally improve the clients
situation and supports
recommendations with credible
arguments.
Plan is structured and flows well
with minimal issues; contains
logical sequencing and most of
the appropriate sections and
information required of a risk
management plan.
The plan is presented
professionally with a limited
number of errors in spelling,
punctuation, grammar or
syntax, none of which impact
the readability or
understanding of the plan.
Presents the main
recommendations that will
improve the clients situation
and supports recommendations
with basic arguments.
Plans structure and flow can be
followed with some issues;
contains most of the sections
and information required of a
risk management
plan.
The plan is presented
professionally with a number
of errors in spelling,
punctuation, grammar or
syntax, none of which impact
the readability or
understanding of the plan.
Fails to present an appropriate
number of recommendations
or recommendations that will
fail to improve the clients
situation.
Recommendations
presented without or with
weak support.
Plans structure is disjointed,
resulting in difficulty
understanding the plan and/or
missing substantial sections and
information required of a risk
management
plan.
The plan is not presented
professionally, has substantial
errors and issues in spelling,
punctuation, grammar or
syntax, which negatively
impacts the readability or
understanding of the
plan.
Part B: Presentation of the Risk Management and Insurance Plan

Criterion Description Grades Available

Engagement Presenter engages audience using appropriate: 30
Body language (poise, posture, movement, gestures, facial
expressions and eye contact)
Voice (speed, tone, pitch, inflection and other parts of
elocution)
Language (appropriate use and level of language for the
audience)
Organization Presentation flows in a logical and interesting sequence that 20
motivates audience to engage in presentation, and makes it easy to
follow and understand presentation.
Content / Relevance Content provided to audience is relevant and delivered with 20
confidence.
Influence Presentation motivates audience to take the next steps in the risk 20
management and insurance process.
Professionalism Presenter is professional in appearance, presentation style, and 10
carries themselves as one would be expected to do so as part of the
profession.