Case Study (Group Project)

Philip and Lacie Scott

Philip (age 37) and Lacie (age 38) Scott are married and live in Frederick, MD. They have a daughter, Carla Scott (age 8). Lacie is a physicians assistant and Philip teaches at the Frederick Community College (FCC). Carla attends a private elementary school in Frederick. Philip and Lacie have a pool in their backyard and just purchased a trampoline for Carla. Carla also has a shih tzu. Lacie has $22,000 in cash hidden under her mattress in the event an emergency arises.

Philip and Lacie purchased their primary residence five years ago for $250,000. Their down payment was $12,500 and the remainder was a mortgage. The APR on the mortgage is 3.5%. The replacement value of the home is $260,000. The Scotts took out a 5-year auto loan for $25,000 one year ago. The APR on the loan is 6%.

The Scotts have a standard H0-3 policy. Their home is covered for $195,000 (Coverage A). Their H0-3 policy provides $300,000 of liability protection. Both of the Scotts cars are covered using the minimum liability limits required by state law. They have collision and comprehensive coverage on both cars and a $250 deductible. The Scotts each have $150,000 of group term life insurance through their employers. Philip pays $5.22 and Lacie pays $6.02 per month, after- taxes, for the group term life insurance. Philip has an any occupation disability policy through FCC that replaces 60% of his gross salary. Lacie and Carla are covered under Philips health insurance plan through the FCC.

Philip and Lacie have asked you, their financial planner and known insurance expert, to put together the risk management section of their financial plan. The insurance plan should include the following:

Areas Executive Summary Homeowners Insurance Auto Insurance Life Insurance Health Insurance Disability Insurance Other Insurance Non-insurance recommendations Presentation (10 min max)

Cash Flow Statement Balance Sheet Cash Inflows: Monthly Lacie paycheck (net): Philip paycheck (net): Assets: Total inflows Cash Flow Statement Balance Sheet Cash Inflows: Monthly Lacie paycheck (net): Philip paycheck (net): Assets: Total inflows