Risk Management Strategy
Risk Management Strategy
Ash and Garry Starr
Your personal and financial position
Your personal profile Ash Garry
Date of birth 01/01/1986 01/01/1984
Current age 36 38
Marital status Married Married
Residential address 1 Griffith St, Galactice Waters QLD 4218 1 Griffith St, Galactice Waters QLD 4218
Telephone 0412 123 456 0412 456 789
Email address ash.s@hotmail.com garry.s@hotmail.com
Employment status Part-time (18 hours/week)
Senior Workplace Analyst at Queensland Health Full-time
Physiotherapist at All the Right Moves
Dependents Current Age D.O.B.
Stella 4 01/01/2018
Phoenix 2 01/01/2020
Your health Current health Good Blood pressure and cholesterol level is high but not required for medication
Member private health fund Medibank Medibank
Smoker? Non-smoker Non-Smoker
Family History Considerations? Had COVID-19
Sister has chronic fatigue syndrome and severe depression Back injury from previous tennis activities
Lifestyle Assets Owner Value
BMW 330 Ash $60,000
BMW X5 Garry $80,000
Owner-occupied property Joint (Ash & Garry) $1,200,000
Sub Total $1,340,000
Financial Assets Non SuperOwner Value
Personal Saving Ash $40,000
Personal Saving Garry $60,000
Family Saving Joint (Ash & Garry) $50,000
Sub Total $150,000
Financial Assets Super Owner Value
QSuper Ash $450,000
HESTA Garry $370,000
Sub Total $820,000
Assets Total $2,310,000
Liabilities Owner Value
Home loan mortgage Joint (Ash & Garry) $620,000
Liabilities Total $620,000
Net Worth $1,690,000
Income Ash Garry
Salary $64,301.55 $141,906.87
Super $8,198.45 $18,093.13
Tax (income tax and Medicare levy) $12,615.55 $40,410.68
Total net income (post super and tax) $51,686.00 $101,496.19
Expenses Ash Garry
See Appendix 1 Household Budget $10,000
Total (monthly) $10,000
Estimated Cash Surplus/Deficit $33,182/year
Existing Life Insurance:
Owner Insurance Provider Contract Type Benefit Amount Waiting Period Benefit Period Premiums
QSuper (for Ash) QSuper IP Ins 90% for 6 months and 70% after 90 days 2 years $554 p.a.
(=$46/mth)
QSuper (for Ash) QSuper Life Ins $500,000 N/A N/A $325 p.a.
(=$27/mth)
QSuper (for Ash) QSuper TPD Ins $500,000 N/A N/A $660 p.a.
(=$55/mth)
Ash Garry
Do you have a Will? No No
Provision for a testamentary trust Do you have a Power of Attorney? No No
Type / Attorneys name Binding Death Nominations No No
Strategy discussion
Wealth ProtectionInsurance Overview
Assumptions for capital requirements for risk management goals and objectives.
40 years life expectancy.
investment portfolio is a moderate growth risk profile with 3% index rate.
Inflation is set as 3% per year
childrens education up to age 18. study in the public school which assumes $3,500/year from Pre to year 6 and $8,500/year from year 7 to year 12.
hire a carer if any of them become disabled
Goal for garry,
Life cover clear mortgage, fund children education fee upto age 18, fund funeral of $8000, $50,000 for terminal illness, remaining living expense (10000-mortange repayment = $7050) ***offset by IP?
TPD - clear mortgage, fund children education fee upto age 18, $100,000 for transportation/home modification, carer service $200,000, remaining living expense (10000-mortange repayment = $7050) to age 65
Trauma 2yr mortgage repayment, 2yr education fee, $30,000 medical cost, $10,000 carer. Remaining living expense
IP to age 65
Flexi-link and use different insurance to offset each other to have adequate protection and mini cost
Goal for ash
First 3 goals are the same
IP no enough working hour, may be use METLIFE as is 15 hours for IP cover 2yr waiting 65 or 30/65?
Flexi-link and use different insurance to offset each other to have adequate protection and mini cost
keep existing policy
Summary of recommended cover
The table below summarises the insurance cover we recommend you hold.
Life insured: Garry
Policy Owner Policy Provider Type of cover Sum Insured Waiting period Benefit period Premium Estimate
Life insured: Ash
Policy Owner Policy Provider Type of cover Sum Insured Waiting period Benefit period Premium Estimate
Strategy Outline
[Insert discussion of your recommended strategies. Detail for each client the strategy and features of products recommended and why these have been considered, including general and specific benefits of your recommendations. Use headings where appropriate.]
***1.5 pages999
What I recommend to Garry is
advice
Strategy Outcomes
[Explain how each S.M.A.R.T. goal is specifically achieved by the recommendations in the strategy you have outlined above.]
1
2
3
4
5
6
7
8
General Risks & Disadvantages
[Describe the general risks/implications as well as disadvantages associated with implementing your advice on each of the insurance strategies/products. Disadvantages are actual consequences. Risks are things that may happen.]
Alternatives
[Detail the alternative strategies you considered and explain why you did not recommend them.]
Why in/out super, only stand alone or flexi-linketc., cancel, retaining ?Considering garrys income, he
Personal Risks & General Warning
Completed in other documents
Ongoing Service
Completed in other documents
Assumptions
[Document any assumptions you have made and used to formulate your strategy that have NOT already been included earlier in your strategy outline.]
AppendixHousehold Budget
Budgeted expenses Monthly
Home and Utilities
Mortgage $2,950 [2]
Council rates $150
Maintenance $200
Electricity $200
Water $120
Communication (Internet, phone, mobile) $180
home total $3,800
Family
Education (P-6 ~=$3,500pa, 7-12 ~=$8,500 pa) $590
Holidays $200
Entertainment $50
Clothing $50
family total $890
Food
Groceries $1,200
Beverages $170
Restaurants $400
Food total $1,700
Health
Dental $100
Medicines $100
Health total $150
Car
Registration $1,550
Petrol $400
Vehicle service $300
Transport $200
car total $2,400
Current insurance
Home and contents Insurance $150
Health Family Cover, hospital and extras $200
Car insurance $120
Car insurance $120
Current insurance total $550
Savings
Contribution to saving account $100
Holiday, season gifts saving $100
Savings total $200
Spending
Other expense $100
Total Monthly Expenses $10,000
Needs analysis Garry
Needs analysis Ash
Reference
[1] calculation for gross/net income, super, tax: https://paycalculator.com.au/[2] Westpac Mortgage repayment Calculator (access: 05/09/2022): https://www.westpac.com.au/personal-banking/home-loans/calculator/mortgage-repayment/?cid=wc:hl:WBCHL_1904:sem:sem:sem_%2Brepayment%20%2Bcalculator%20%2Bwestpac_b
[3] Life expectancy https://www.abs.gov.au/media-centre/media-releases/life-expectancy-hits-new-high[4] Living expenses standard https://www.superannuation.asn.au/resources/retirement-standard[5] Carer cost https://daughterlycare.com.au/live-in-care-cost-elderly#:~:text=Live%20in%20Care%20costs%20between,week%20with%20no%20Public%20Holidays.
[6] Cost of education https://www.finder.com.au/life-insurance-and-the-cost-of-raising-children#:~:text=A%202018%20research%20by%20the,for%2018%20years%20per%20child.
[Please start this section on a new page. Include here any relevant information to support your strategy including a detailed household budget, insurance needs analysis (e.g. pdf of Needs Analysis from Xplan), any economic assumptions made to complete the analysis, and any other material you consider relevant to your strategy.]
RBA inflation rate https://www.rba.gov.au/inflation/measures-cpi.html
Tuition fee https://www.pepper.com.au/lending/help-centre/getting-started/the-real-cost-of-education-in-australiaFuneral cost https://whitsundayfunerals.com.au/insights/how-much-does-a-funeral-cost-in-australia#:~:text=The%20average%20cost%20of%20a,%2415000%20for%20an%20elaborate%20event%E2%80%A6
7245AFE / 7819AFE Major Written Assignment Rubric
Criteria Excellent Very Good Pass Below expectations Well below expectations
Overview
(5%) Excellent overview; demonstrating the importance of insurance as part of a personal risk management plan and providing a very clear set of objectives and priorities for the clients. Good overview; providing a mostly clear set of objectives and priorities for the clients and ensures most areas relevant to the strategy document overview are clearly outlined. Fair overview, addresses some of the objectives and priorities for the clients, but lacks some detail; ensures some areas relevant to the strategy document overview are outlined. Poor overview; addresses limited points and/or lacks detail relevant to the clients objectives and priorities; few areas relevant to the strategy document overview are outlined. Very poor or non-existent overview. Little or no information relevant to the strategy document overview is identified.
Content Knowledge
(40%) Demonstrates a balanced and very high level of detailed knowledge of risk management and insurance principles and strategies in an applied context by providing a very high level of analysis. Demonstrates a balanced and high level of knowledge of risk management and insurance principles and strategies in an applied context by providing a high level of analysis. Demonstrates a good level of knowledge of some of the core risk management and insurance principles and strategies in an applied context by providing some level of analysis. Demonstrates limited knowledge of core risk management and insurance principles and strategies in an applied context by providing a limited level of analysis. Demonstrates little, if any, knowledge of core risk management and insurance principles and strategies in an applied context with extremely limited, if any, analysis.
Organisation or structure
(5%) The ideas are arranged in an extremely logical, structured and coherent manner and are consistent with the students assumptions throughout. Appropriate content is included in each section of the risk strategy template. The ideas are arranged in a fairly logical, structured and coherent manner and are mostly consistent with the students assumptions throughout. Appropriate content is included in each section of the risk strategy template. The ideas are arranged in a logical, some-what structured and coherent manner, however, some inconsistencies with the students assumptions are apparent. Some content is included in an inappropriate area of the risk strategy template. The ideas appear less logical, structured and presents in fairly incoherent manner and/or a number of inconsistencies with the students assumptions are apparent. Some content is included in an inappropriate area of the risk strategy template. There is little, if any, coherent structure to the document with content not applied in the correct areas of the risk strategy template provided. The document appears very confusing, providing little rationale and/or many inconsistencies with the students assumptions.
Product recommendations
(20%) The document presents a detailed and focused summary of the product recommendations which are consistent with the strategies discussed; recommendations are customised to the clients needs. The document presents a fairly detailed and focused summary of the product recommendations which are consistent with the strategies discussed; recommendations are customised to the clients needs. The document presents a somewhat detailed and focused summary of the product recommendations and/or some inconsistencies with the strategies discussed; provides some evidence that recommendations are customised to the clients needs. The document provides limited detail of product recommendations and/or a number of inconsistencies with the strategies discussed; there is little evidence that recommendations are customised to the clients needs. The document fails to provide any clear detail of product recommendations and there is little, if any, consistency with the strategies discussed; recommendations are generic and do not address clients needs.
Assumptions/
Appendices
(20%) Appropriate and credible assumptions are made that show the student has applied the facts of the case. Where relevant, student provides appropriate materials in the appendix or references to materials to support the advice provided in the strategy discussion. The needs analysis employs an appropriate methodology and is accurate for the assumptions made. Mostly appropriate and credible assumptions are made that show the student has applied the facts of the case. Where relevant, student provides appropriate materials in the appendix or references to materials to support the advice provided in the strategy discussion. The needs analysis employs an appropriate methodology and is mostly accurate for the assumptions made. Some appropriate and credible assumptions are made that show the student has attempted to apply the facts of the case. Student provides some appropriate materials in the appendix or references to materials to support the advice provided in the strategy discussion. The needs analysis is complete but there are weaknesses in the methodology and/or a few calculation errors that impact on the appropriateness of cover recommended. Few appropriate and credible assumptions are made. Student had difficulty in attempting to apply the facts of the case. Student provides some appropriate materials in the appendix or references to materials to support the advice provided in the strategy discussion although some irrelevant materials or references included. The needs analysis omits an item, has weaknesses in the methodology and/or contains numerous calculation errors that impact on the appropriateness of cover recommended. Little or no appropriate and credible assumptions are made. Student made little or no attempt to apply the facts of the case. Student provides little or no appropriate materials in the appendix to support the advice provided or includes irrelevant materials or references that do not support the strategy discussion. The needs analysis omits items, has weaknesses in the methodology and/or contains calculation errors that have a significant impact on the appropriateness of cover recommended.
Presentation/
Mechanics
(10%) Quality of writing at a very high standard (i.e., use of a clear and well thought-out overview providing clear guidance to the strategy document including a logical development of ideas and a clear and concise explanation of strategies and products in terms that the clients can understand). Correct grammar, spelling and punctuation. Quality of writing is of a high standard (i.e., a mostly well thought-out overview although some minor inconsistencies from the strategy document, providing mostly clear guidance through the logical developments of ideas and a mostly clear and concise explanation of strategies and products in terms that the clients can understand). Few grammar, spelling and punctuation mistakes. Quality of writing is of a good standard (i.e., an overview is provided however some areas omitted which are included in the document, ideas may lack clear logical flow, but a mostly clear and concise explanation of strategies and products in terms that the clients can understand). Few grammar, spelling and punctuation mistakes. Some problems with sentence structure and presentation (i.e., an overview is included however brief and at times irrelevant to the discussion in the strategy document, frequent inconsistencies from one paragraph to the next, ideas lack logical flow and/or detail and/or reflects information irrelevant to the strategy document) . Frequent grammar, punctuation and spelling mistakes. Language and explanations not up to standard for presentation to the clients. Quality of writing is at a very poor standard so barely understandable (i.e., limited or no overview included, paragraphs and ideas are not linked or a poorly structured, document does not address the main areas of focus and/or includes information irrelevant to the strategy document). Many spelling mistakes. Little or no evidence of proof reading. Language and explanations not up to standard for presentation to the clients.
Risk Management Strategy
Ash and Garry Starr
Your personal and financial position
[Insert information about the clients from the case study and your assumptions about other required information relevant to the strategy discussion or this template. Information is only needed to the extent it is relevant to the strategies discussed. You can provide this information in the table, in bullet points, written paragraphs or a combination of these.]
Your personal profile Ash Garry
Date of birth Current age Marital status Residential address Telephone Email address Employment status DependantsCurrent Age D.O.B.
Your health Current health Member private health fund [insert fund name] [insert fund name]
Smoker? Family History Considerations? Lifestyle Assets Owner Value
[Insert details] [Insert details] Sub Total Financial Assets Non Super Owner Value
[Insert details] [Insert details] Sub Total Financial Assets Super Owner Value
[Insert details] [Insert details] Sub Total Assets Total Liabilities Owner Value
[Insert details] [Insert details] Liabilities Total Net Worth $INSERT FIGURE HERE
Income Ash Garry
[Insert details] [Insert details] Total net income (post super and tax) Expenses Ash Garry
[Insert total- details e.g. living expenses can combine as a family if preferred rather than individual expenses. Please attach a detailed budget as an Appendix.] Total Estimated Cash Surplus/Deficit $INSERT FIGURE HERE
Existing Life Insurance:
Owner Insurance Provider Contract Type Benefit Amount Waiting Period Benefit Period Premiums
[Insert details] Ash Garry
Do you have a Will? Provision for testamentary trust Do you have a Power of Attorney? Type / Attorneys name Binding Death Nominations Strategy discussion
Wealth ProtectionInsurance Overview
[Insert Ash and Garrys S.M.A.R.T. risk management objectives for their family in detail. These objectives should be specific, measurable, attainable, relevant and time-bound. Insert discussion of Ash and Garrys objectives as they relate to personal risk management, insurance priorities, the role of personal insurance as part of their overall financial plan, general consequences of not having adequate cover (more detail will be included in general and personal risks sections below) and role of different types of insurances in a well-structured risk management plan. This should be written as though it is addressed to the client as part of a statement of advice. Presentation and layout should be taken into consideration.]
Summary of recommended cover
The table below summarises the insurance cover we recommend you hold.
[Insert detail on all life insurances for Ash and Garry in the table/s below. If you are recommending they keep existing cover, make sure you include them in here as well as any additional new cover.]
Life insured: Ash
Policy Owner Type of cover Sum Insured Waiting period Benefit period Premium Estimate
[Add lines to tables as necessary.]
Life insured: Garry
Policy Owner Type of cover Sum Insured Waiting period Benefit period Premium Estimate
Strategy Outline
[Insert discussion of your recommended strategies. Detail for each client the strategy and features of products recommended and why these have been considered, including general and specific benefits of your recommendations. Use headings where appropriate.]
Strategy Outcomes
[Explain how each S.M.A.R.T. goal is specifically achieved by the recommendations in the strategy you have outlined above.]
General Risks & Disadvantages
[Describe the general risks/implications as well as disadvantages associated with implementing your advice on each of the insurance strategies/products. Disadvantages are actual consequences. Risks are things that may happen.]
Alternatives
[Detail the alternative strategies you considered and explain why you did not recommend them.]
Personal Risks & General Warning
[Describe any personal risks associated with implementing or not implementing your advice. You should outline any personal risks and disadvantages not covered in the general section above i.e. risks specific to your client. You should also provide general information and warnings including cooling off periods, duty of disclosure and underwriting requirements.]
Ongoing Service
[Propose an ongoing review service if appropriate. If recommended explain what it is and why it is necessary.]
Assumptions
[Document any assumptions you have made and used to formulate your strategy that have NOT already been included earlier in your strategy outline.]Appendix[Please start this section on a new page. Include here any relevant information to support your strategy including a detailed household budget, insurance needs analysis (e.g. pdf of Needs Analysis from Xplan), any economic assumptions made to complete the analysis, and any other material you consider relevant to your strategy.]
