Engage, Empower, Excite, Educate

Life & Health Insurance Case Study (Fall 2021)

INSR 3014

DUE DATE: 11:59 pm December 10, 2021 in FOL dropbox

Your analysis of this case MUST be typewritten and professional in appearance.

Your report MUST be written to your prospective clients, in a manner that is clear and concise.
You should assume that, while some terminology may be appropriate, they will not understand,
or be interested in, any industry jargon. As this report is made to the clients, spelling and
grammar, as well as appearance, will be cause for deductions (maximum 10%).

Your assignment submission must be original and copying (eg. clipping from Wikipedia or
another class group) will not be allowed and will result in a grade of zero. Any information or
other input for this case that you acquire from outside the text or course materials MUST be
properly referenced and adequately footnoted. 1

This assignment is to be done in groups of 3 to 4 (maximum).

The Case: The Barton/Roy Family

Personal Information

Your clients are Martin Barton and Maggie Roy. Martin (42) is forty-two years old. Maggie (35)
is thirty-five years of age. Maggie is an executive with a major Canadian financial institution –
Roball Bank of Canada. Martin works as a landscape designer for a local pool installation
company – Wonder Pools Inc.

They were married in 2010.They were advised to sign a marriage contract at that time but
Martin felt that was “…admitting defeat before the game starts.” They did not sign a marriage
contract. Neither party has been previously married or has any children outside of their
marriage to one another.

1
General caution: This course is about Canadian Insurance planning. Please be vigilant when using the internet for
research NOT to use American sources. They are not comparable and will lead to errors!!
Maggie attended Queen’s University and has a degree in Business. She has been at the Roball
Bank of Canada since graduation. Maggie started out as a customer service representative and
is now Regional Vice President of Diversity and Inclusion for Roball’s Ontario operation. She
commutes by train from London to Toronto several days per week.

Martin attended Fanshawe College where he studied Landscape Design.

Martin and Maggie had a child together in 2015 – Zeke (6). Two years later, Emily (4) was born.
Emily has some moderate intellectual development issues. She will likely require additional
tutoring and educational supports throughout her future academic career. Maggie and Martin
intend for Emily to attend the local, neighborhood public schools until, and if, she chooses a
post-secondary path. Although it’s early yet to say what the future holds for Zeke and Emily,
Martin and Maggie both hope they will be able to attend post-secondary studies. They wish to
provide for the first degree/diploma for both Emily and Zeke. Both parents expressed some
concern for Emily’s economic prospects given there may be some limitations on her career
opportunities.

Children

Education is very important to the family and the children are expected, if they are able, to obtain
post-secondary degrees or diplomas. In addition to the educational goals, the children will be
quite active in sports and extracurriculars. Zeke plays hockey and hopes to be on a competitive
team soon. He also takes lessons to play guitar. Emily has started a weekly dance class. Both
children have excellent physical health. Maggie and Martin have/will invest very heavily in
tutoring supports to help the children keep academic pace as much as possible.

Employment:

Maggie earns a gross salary of $110,000 per year from Roball Bank of Canada. She anticipates
salary growth of about 2% per annum over the next few years as salaries have become more
competitive as a result of the COVID-19 pandemic. Roball does not have a pension plan for
employees. She is part of the employee group benefits plan. She pays $138.94 per month for
basic LTD coverage through her employer. She also pays $12.20 per month for one times her
salary of group insurance. Her annual bonus per year varies depending on company results.
However, it is typically a minimum of $20,000. By way of example, a bonus for 2020 is paid in
January of 2021. The group life coverage pays 1x salary ($110,000). She is able to add an
additional unit this year with no evidence of insurability.

Maggie enjoys working at Roball but the commuting, frequent meetings and stresses of the
pandemic have her rethinking her career a little. She has been contacted by some recruiters to
join some smaller consulting firms where she can practice her attained skills. This is just an idea
right now but she expects that any move she made would be at the same or better salary +
bonus combination. However, many of the prospective employers have no extended benefits
plan for employees.

Martin is a team leader at Wonder Pools. Wonder Pools is a small company with less than 20
employees. There is no benefit plan. His gross salary is $60,000 per annum. He anticipates a raise
of 1% each year.

Health

Martin and Maggie are relatively active and physical. Martin was recently advised by his family
doctor to lose about 20 pounds. He has been working towards this goal and expects to be on
target this year. Martin’s family has a history of heart disease and diabetes although he has
demonstrated no symptoms. They are otherwise in good health and obtain regular physicals
and check-ups.

Wills and Powers of Attorney

Neither Maggie nor Martin have ever done wills or powers of attorney.

The couple want each other to be taken care of should one of them die too soon. They are
especially concerned that the children be treated fairly and equitably – especially Emily, as she is
so young and may require financial assistance throughout her life. Martin is also particularly
concerned about paying taxes on his assets at death. He is uninformed on taxes due at death
and wants some specific information about his family’s situation.

Major Assets

Martin and Maggie’s home in London, Ontario is worth $600,000 and they have a $350,000
mortgage on the house. There is also a secured line of credit discussed below. They each have a
car. They provided information on their other assets on the attached sheet.

They jointly own their London home with right of survivorship.

Existing Financial Security

Maggie’s parents own $250,000 of 20-year term life insurance on Maggie’s life. The policy is
renewable and convertible. This insurance was originally acquired by her parents for their
business succession planning needs in 2009. However, the business suffered during the COVID-
19 pandemic and has since been sold. Maggie’s parents retained the policy and wondered if
Maggie was interested in becoming the owner. No beneficiary is on the policy and Maggie is
seeking some guidance in this regard. Martin has no individual or group life insurance coverage.

Martin never really understood disability insurance and is curious about whether he should
explore a policy. Maggie has coverage through her current employer.
Martin and Maggie hope to enjoy a comfortable retirement. However, they love their work and
neither intends to stop working at any specific age. That said, Maggie would likely retire from
Roball at 65.

The sole purpose of this engagement is to review their insurance needs and discuss potential
solutions and strategies to achieve their planning goals.

Other Assets, Insurance and Debts:

Maggie Martin
CARS 2019 Lexus SUV 2011 Honda Accord
High mileage
Worth $38,000 Minimal value
Lease payment $800 per No debt
month
2.5 years remain on lease

RRSPs $125,000 (Zeke is $150,000 (no beneficiary

beneficiary) named)

Company PENSIONS None None

GROUP INS. 1X salary None

Martin is the beneficiary
RBC Bank Accounts $32,000 in savings account $45,000 in savings account
RBC Dominion $156,000 in non-registered
Securities Account account, JTWROS with
Martin
Debts (other than $14,000 on Secured Line of Credit (roof repair)
mortgage) Credit Limit $60,000
Prime + 1%
3% minimum monthly payment

The Barton/Roy Family Planning Objectives:

They know very little about the possibilities of insurance based risk management in general.
The letter of engagement you signed with them stressed this is a modular financial plan and you
will be limiting your assessment and report to their insurance needs analysis and deployment of
policy benefits to achieve their goals. In addition to items mentioned above, their goals include:

• Martin and Maggie are both concerned that their capital be preserved as much as
possible at death for the needs of the surviving spouse and the children;
• Education of the children is of vital importance;
• They want to travel and go on annual family vacations at March Break as much as
possible while their children are in elementary and high school. They anticipate this will
cost $6,000 per year starting in 2022 and keep pace with inflation;
• They don’t want to leave their family with significant debt should one of them die or
become unable to work through disability;
• Affordability is important to the couple. They want to be able to enjoy life and manage
their risk – flexibility in your suggestions will be attractive to this couple;
• Being able to retain their existing home should one of them pass away is important to
the couple;
• They would want to care for one another should there be a significant illness or injury.
Reasonably, they feel about 6 months post diagnosis/event would be ideal. In the event
one of them dies, they would each hope to have the financial option to stay home or
have reduced work load until the children are in high school.

Case Study Requirements:

Complete the plan by considering the strategies Martin and Maggie should implement to
achieve their objectives. Your final plan should be complete and ready to discuss with the
couple. Your plan MUST include the following elements:

1. An insurance needs analysis for each of Maggie and Martin that clearly shows
their needs for life insurance, disability insurance and critical illness insurance;
2. A cash flow statement and net worth statement with observations and analysis;
3. A revised cash flow analysis that shows the effect of your recommendations on
their personal financial situation should they implement your planning
suggestions;
4. Suggestions for financial contingencies and expenses they appear to have
omitted or undervalued;
5. Specific insurance recommendations with detailed explanations of your reasons
for making this recommendation that are relevant to their needs and goals;
6. A list of key assumptions made to support your planning (put in an appendix);
7. Detailed calculations and projections to support your planning (put in an
appendix)

In answering this, you should consider:

• the assets and liabilities owned;

• their goals and obligations in case of premature death or disability;
• the current state of their legal documents such as wills and powers of attorney;
• estate distribution based on present situation versus goals and objectives;
• if assumptions need to be made, make them, and carry on with your analysis;
• potential costs to the estate from taxation and insufficient planning;
• you may need to use financial planning tools learned in other courses;
• any other pertinent issues that are not specifically asked in the case but that you have
identified in your analysis;
• the gaps in their planning from their current status to what they intend to achieve and
the tools available to bridge those gaps and achieve a successful plan.
Family Expenses for Martin Barton and Maggie Roy: $
Toyota Finance $810.13
London Hydro $110.00
Enbridge – Union Gas $126.00
City of London Taxes $400.00
Rogers Ignite $147.00
Mortgage $1,012.83
Vehicle Insurance $237.00
Home liability insurance (house) $320.00
Rogers Cel (both) $170.00
Family Recreation $100.00
Food & Groceries (formula etc) $1200.00
Entertainment, restaurants, fast food $260.00
Vehicle Fuel, repairs and maintenance $150.00
Gifts $200.00
Babysitting (minimal at present time) $100.00
Netflix & Disney+ $26.00
Personal grooming $120.00
Pharmacy (prescription deductibles and over the counter) $100.00
Clothes & shoes for all family $340.00
Total $6,028.96
Required Format:

In general, there is no required format. Part of the challenge you face is creating a coherent,
modular presentation on their insurance and risk management needs. However, it is good to
keep a few things in mind:

• You are not a lawyer or tax advisor – don’t give specific legal and tax advice. Suggest
common solutions from a benefits and limitations perspective (pros and cons);
• You are writing to your clients. They are relying on your knowledge to get a clear
understanding of where they need to go and what they need to do in their planning;
• Do NOT write to the professor and avoid a writing tone that is jocular and too familiar.
Professional tone at all times;
• Give some thought to visual presentation – this is not an essay but a report to a client.
Present topics in a visually pleasing manner. Infographics, side panels etc. are all
acceptable in addition to the main discussion;
• You will need to do many calculations. However, unless they are essential to the client
presentation, put calculations in the Appendix of the report. Accurately reference the
section of the appendix where the reader can find the calculations. Do NOT share Excel
tables – create your own!!! (attach excel sheets separately to show authorship);
• If showing the calculations is important to put in the body of the report, make sure the
calculations are clear and the relevance is discussed. Also, create a visually pleasant way
to present those calculations.
• If you make use of third party information and sources YOU MUST PROVIDE
ATTRIBUTION.
• Be careful to ensure that your third party sources are jurisdictionally relevant. Ontario
and Canada are the relevant jurisdictions. Be careful NOT to use US resources. They are
not relevant and are often significantly incorrect for our purposes;
• This is a group project but the assignment should read as if one person, one voice wrote
it. Make one person in your group an editor to achieve a uniform voice and appearance;
• Every group member will be expected to contribute to the assignment;
• For format:
 Paper should be 12-15 pages (not including Appendix)
 A Table of Contents is required (not part of the page count)
 Consider an Executive Summary at the start that highlights your 2 or 3
most critical suggestions (usually time sensitive or especially urgent
matters);
 Do not waste significant page space by repeating the facts of the case.
Only do so if they are needed for context;
 You are NOT required to create a Letter of Engagement. If you do one,
place it in the Appendix;
 Consider a chart or table that summarizes all your thoughtful suggestions
in order of importance or time sensitivity. Each suggestion could also
include a timeline suggestion (ie. Complete your insurance application
 within 30 days of this report), a reason for the timeline (ie. why 30
days?), and a professional they will need for assistance (you, lawyer,
accountant, business consultant etc.)
 One paper per group.