Client Background You are a financial planner with a specialty in risk management. You've completed the...

Transcribed Image Text:

Client Background You are a financial planner with a specialty in risk management. You've completed the LLQP and are licensed to sell insurance products. You love your career and have built a successful practice based mainly on referrals from your satisfied clients. Jack, age 49, and Jill, age 48, are one of those referrals. Jack is Vice-President of Marketing at a mid-sized systems firm. His salary is $190,000+ bonus. Last year his bonus was $40,000. Jill is an accountant in private practice. She works from home and typically bills $150,000 a year or $100,000 after expenses. They feel pretty comfortable financially but have asked you to flag any gaps that you can see in their risk management strategy. They also have specific questions that they'd like you to address. Jack and Jill are married with two children who live at home: Tracey, age 22 and Travis, age 17. Jill's mother, Lauren age 75, is widowed. Although she is financially independent, she moved in with Jill and her family after the recent death of her husband. She contributes to the family's expenses and is especially devoted to her granddaughter, Tracey. Tracey, a happy and outgoing woman, was born with Down syndrome, a common genetic disorder. Otherwise, Tracey is in good health and could easily live to age 60. Jack and Jill would like to keep Tracey at home as long as possible but they are concerned about her ability to adapt if one or both of them dies unexpectedly. As a result, they're considering moving her into a group home in their city. The group home provides full support to residents. The fee for this year is $58,250. Tracey has seen the place and likes it, in no small part because her boyfriend lives there. Travis will finish high school this year and start university in the fall. He's been accepted into the systems engineering program, considered the top such program in Canada. As the university is in his home town, he'll be able to live at home. On graduation, he hopes to find employment locally so he can continue to live near his sister, with whom he's very close. Jack and Jill have invested the maximum in a RESP for Travis and the FMV is $71,415. Given that they will soon start making withdrawals from the plan, they recently switched the investment portfolio to a mix of cash and GICs. While it's been a struggle for Jack and Jill to manage the diverse needs of both children, they love them both deeply and want to make sure they're set up to be successful in life. This means ensuring enough funds are available to support Tracey in the group home for as long as she lives. In Travis's case, they intend to pay his annual tuition and related expenses for an undergraduate degree and a graduate degree should he decide to pursue one. As Travis will likely continue to live at home during this period, they estimate the cost of his education at $15,000 per year for the next six years. They'd also like Travis 2 Client Background You are a financial planner with a specialty in risk management. You've completed the LLQP and are licensed to sell insurance products. You love your career and have built a successful practice based mainly on referrals from your satisfied clients. Jack, age 49, and Jill, age 48, are one of those referrals. Jack is Vice-President of Marketing at a mid-sized systems firm. His salary is $190,000+ bonus. Last year his bonus was $40,000. Jill is an accountant in private practice. She works from home and typically bills $150,000 a year or $100,000 after expenses. They feel pretty comfortable financially but have asked you to flag any gaps that you can see in their risk management strategy. They also have specific questions that they'd like you to address. Jack and Jill are married with two children who live at home: Tracey, age 22 and Travis, age 17. Jill's mother, Lauren age 75, is widowed. Although she is financially independent, she moved in with Jill and her family after the recent death of her husband. She contributes to the family's expenses and is especially devoted to her granddaughter, Tracey. Tracey, a happy and outgoing woman, was born with Down syndrome, a common genetic disorder. Otherwise, Tracey is in good health and could easily live to age 60. Jack and Jill would like to keep Tracey at home as long as possible but they are concerned about her ability to adapt if one or both of them dies unexpectedly. As a result, they're considering moving her into a group home in their city. The group home provides full support to residents. The fee for this year is $58,250. Tracey has seen the place and likes it, in no small part because her boyfriend lives there. Travis will finish high school this year and start university in the fall. He's been accepted into the systems engineering program, considered the top such program in Canada. As the university is in his home town, he'll be able to live at home. On graduation, he hopes to find employment locally so he can continue to live near his sister, with whom he's very close. Jack and Jill have invested the maximum in a RESP for Travis and the FMV is $71,415. Given that they will soon start making withdrawals from the plan, they recently switched the investment portfolio to a mix of cash and GICs. While it's been a struggle for Jack and Jill to manage the diverse needs of both children, they love them both deeply and want to make sure they're set up to be successful in life. This means ensuring enough funds are available to support Tracey in the group home for as long as she lives. In Travis's case, they intend to pay his annual tuition and related expenses for an undergraduate degree and a graduate degree should he decide to pursue one. As Travis will likely continue to live at home during this period, they estimate the cost of his education at $15,000 per year for the next six years. They'd also like Travis 2