Reference no: EM132864317
Question - John recently got married to Gail, and together they purchased a home for $800,000. They were fortunate to have similar, well-paying jobs with a combined gross income of $100,000. Qualifying for the mortgage of $ 600,000 was a breeze. As they expect their first child in December, John is starting to feel the anxiety and stress of the mortgage, car loans of $28,000 and student debt of $ 42,000 incurred by Gail to enhance her career. Adding to this anxiety, is the uncertainty of the costs involved in raising a child, and putting them through university. Last week they visited Gail's best friend, who was hospitalized due to a sudden stroke. (Imagine, a person as young as 35 having a sudden stroke!) Soon thereafter, Gail was getting nervous about their own health.
They decided to consult you, the local financial planner specializing in risk management with The All Kinds of Insurance Company. They would like you to ensure they have the proper coverage to protect their paycheques in the event of sickness, disability and death. John remembered his father always saying that "our health is our wealth", and now, the impact of those simple words has taken on a clearer and profound meaning!
Okay hotshot financial planner, (yes, I'm referring to you!) help John and Gail through the following questions:
-How would you approach this situation?
-What kinds of analysises would you perform?
-What potential/possible recommendations would you make?
-Would you recommend life insurance?
-If so, which type of life insurance would it be?