Bill seeks your advice with respect to his financial situation. After conducting an in-depth interview with him, you establish the following facts: Additional information: The present value of education costs for Bill's two children is $250,000 The present value of Bill's living expenses for the next 20 years is $450,000 Bill is currently earning $185,000 per annum. Required: a) What life insurance cover would Bill need to take out to transfer 75% of his personal risk exposure? Explain why a Guaranteed Future Insurability clause would be useful to Bill and how it could be used. b) Bill is contemplating taking out life and TPD cover. I) Would you recommend the two policies to be bundled or unbundled, and why? ii) Bill is also considering taking out income protection insurance. What is the difference between agreed value and indemnity income protection insurance? Which type of cover would you suggest to Bill? c) Bill is considering the adequate level of cover he needs for his building insurance. He tells you that he would like his cover to be as high as possible. Explain to Bill the consequences of over-insuring his house, with reference to both his premium and the indemnity principle. d) Bill's superannuation fund is offering group life and TPD insurance policies. Explain to Bill how group insurance policies work, and whether they offer more or less flexibility with respect to getting the exact level of cover he might want