Read below case study and answer the question:

Case study
You meet your clients Bob and Janet again, from Assignment 1, to work on life insurance needs
for themselves and their business.
You may recall they recently started an online business, selling a range of household items,
including kitchenware, cleaning products, towels, blankets, ornaments and many other items.
The business has expanded rapidly and they are now leasing a warehouse from where they operate
the business.
They will hire two people initially to help run the business and also operate a shopfront.
They operate the business through a discretionary family trust, and have their own private company
‘Homeware Galore Pty Ltd’ as trustee of the family trust. The business’s trading name is Homeware Galore
Pty Ltd.
Bob and Janet have four children: Sarah (age 19) who is currently a full-time student and not working;
Jonathan (age 17) who is completing year 12; Kathryn (age 14) who is disabled due to a spinal injury
suffered five years ago, and attends a special school; and Kerrie (age 9), who is still at primary school.
Bob and Janet’s objectives are to ensure that if either of them dies prematurely, suffers a serious illness
or is permanently disabled, they want:
• to be able to afford for both of them to take time off work (say six months) to spend time together
and look after the other one
• a buffer of $100,000 to cover any expensive medical treatment, or additional home care for Kathryn
if needed
• to support each child for their education, say $5,000 p.a. for each child until they reach age 23.
Each of them would like to replace their income if they were unable to work again. They have noted
the following:
• They do not want a serious illness or injury to put them in a financial position that would make it difficult
for them to retire at age 67 for Bob and age 62 for Janet.
• Bob is in good health but he is a heavy smoker. Janet is not a smoker but she has been suffering from
high blood pressure and high cholesterol, and even with medication is having problems keeping them
under control.
• They do not want to spend too much on insurance premiums, but at the same time they realise there
will be a cost for getting what they need.
Following are the details of their personal situation, assets and liabilities, cash flow and current insurance
situation. You will need this information to complete the questions in this section.

Personal information
Surname Anderson Anderson
Christian name Bob Janet
Salutation Mr Mrs
Age/Date of birth 42 37
Status Married Married
Home address 28 Marketing Way, Town 28 Marketing Way, Town
Occupation Manager and business operator Sales and clerical
Employer Homeware Galore Pty Ltd
(self-employed)
Homeware Galore Pty Ltd
(self-employed)
Years employed 2 years 2 years
Sick leave currently available Nil Nil
Smoking status Smoker Non-smoker
Health Excellent, no issues High blood pressure and cholesterol
Retirement age 67 62
Dependants/Family relationships Age Notes
Sarah, daughter 19 At university and not working.
Estimated to be dependent until
age 23
Jonathan, son 17 Doing VCE. Estimated to be dependent
until age 23
Kathryn, daughter 14 Is wheelchair bound due to spinal
injury. May qualify for Disability
Support Pension at age 16.
Will continue to be a dependant due
to disability
Kerrie, daughter 9 Still at primary school. Will possibly
be dependent to age 23

Assets and investments
Lifestyle asset Owner Value Details
Principal residence Joint tenants $1,100,000 Mortgage outstanding $250,000
25-year term, 4.7% P&I
Contents Joint $80,000 Insured value
Car: 2020 Holden Commodore Bob $45,000 Fully paid off
Car: 2018 Audi A4 Janet $45,000 Fully paid off
Financial asset Owner Value Details
ANZ bank account Joint $10,000 Everyday savings account earning 0.80% p.a.
Assume not available in case of death/TPD
or trauma
ANZ mortgage offset account Joint $30,000 Assume is available in case of death/TPD or
trauma
REST Super Bob $210,000 100% Core Strategy (My Super default)
Standard default insurance in place
REST Super Janet $175,000 100% Core Strategy (My Super default)
Standard default insurance in place
Homeware Galore Pty Ltd
(through family trust)
Bob and Janet
as main
beneficiaries
$630,000 Valuation provided end FY 2022
Includes current cash reserves in the
trust/company of $150,000
Annual income and cash flow details
Details Bob Janet Combined
Salary $80,000 $80,000 $160,000
Company distribution (typically $0) $0 $0 $0
Interest on bank account $40 $40 $80
Total income received $80,040 $80,040 $160,080
Total deductible expenses $100 $100 $200
Tax payable including Medicare and offsets $18,046 $18,046 $36,093
Total mortgage repayments $17,500
Total general expenses $80,000
Net cash flow $26,287

Insurance and risk management
Bob and Janet have recently met with the general insurance specialist in your firm and have implemented
a comprehensive general insurance plan for themselves and their business.
This is a summary of their life insurance situation.
Insurance Owner Cover Premiums and details
Life Bob $387,500 Premium $6.75 p.w.
TPD Bob $28,600 Premium $0.82 p.w.
Income protection Bob
$2,125
per month
Premium $6.40 p.w.
90-day waiting period – benefit period five years
Life Janet $381,000 Premium $6.75 p.w.
TPD Janet $28,600 Premium $0.74 p.w.
Income protection Janet
$2,125
per month
Premium $4.20 p.w.
90-day waiting period – benefit period five years
The above insurance is the default insurance cover in their REST Super accounts.
Personal needs and assumptions
After a discussion with you, they have agreed that in the event of death, funeral costs of $20,000 would
be sufficient, and a provision for final medical costs of $15,000 and legal costs of $5,000 would be appropriate.
They would also like to consider any government assistance that would be available in the event
of death or disability.
Business needs and assumptions
They believe the $150,000 cash reserves are sufficient in the company. Half of the reserves could be used
if something happened to Bob or Janet and the other half would cover business needs and overheads.
The business has no debts to cover.

Question:
Bob and Janet are ready to review their life insurances. Identify at least 16 key details/questions
that you need to either ask your clients or reconfirm, to assess their life insurance requirements. In your
response, include a brief explanation of why you require these details.