Amanda is 26 years old now, single and onto her second year since graduation as a FundManager.She has no siblings. Her stay-at-home mother is currently 58 years old (father passed away 4years ago), and is not covered by the old Medishield as she has pre-existing conditions.She wants to find out more about the recently launched Medishield Life.

Amanda is concerned about her aging mother as she relies fully on Amanda for her expenses.Amanda thinks that a $1.2 million sum would be sufficient for her mother. She has read onrisk management process in determining insurance needs.

Amanda has agreed from the discussion that her primary objective would be premature deathprotection, with a maximum budget of $5200 per annum set aside for insurance premium.Amanda casually mentioned that if possible, she would like to have a saving component onthe recommendation as a secondary requirement, if budget allows. You have gathered thefollowing information:

Amandas annual salary: $125,800

Expected annual salary increment: 5%

Number of working years: 29 years

Annual premium chargeable:Term: $1.98 per $1000 of sum assured

Wholelife: $4.21 per $1000 of sum assured

Endowment: $6.1 per $1000 of sum assured

(a) Based on these additional information, apply the income-based approach, and analyse whether the initial sum of $1.2 million is sufficient. (please round up to the nearest whole hundreds of thousands) (5 marks)

(b) Recommend a possible solution, and explain how it fits into Amandas situation in terms of investment objective, the costs of the insurance products, and actual sum assured. You may recommend a single product or a combination of products. Pleaseprovide calculations and justification to support your recommendation. (35 marks)