Customer Profile: Mr. & Mrs. Austin Mary and Steve Austin have been married for 5 years and have a 4-year-old daughter named Lindsay. The Austin's are starting to think more about their future with the aim of implementing their short-term and long-term lifestyle goals and financial plans. Mary and Steve are both aged 35 For their immediate future they have decided they want to purchase a new car, and their first home. They would like to replace Steve's car with a new BMW; total retail price including taxes is $52,522. The Austin's are unsure whether to purchase the vehicle using their savings or borrow the funds from the bank or take advantage of BMW's dealership financing available. They are also looking to purchase a house with an approximate purchase price of $600,000. They are very excited as both Mary and Steve have never owned a home before. Steve Austin works as a manager for a robotics manufacturer and earns $100,000 gross annual income ($75,384 after tax). Mary works for a small local manufacturing business as a chief accountant earning $125,000 gross annual income ($89,322 after tax). Mary and Steve want to retire at age 60 and are willing to take on some additional risk if this assists in achieving their lifestyle goals faster. Two years ago, Mary received an inheritance from her late father in the amount of $200 000. With this money they each opened a TSFA (Tax Free Savings Account) and invested $15 000 each. They also opened an RSP for the first time and contributed $10,000 each. The residual balance of the inheritance, $150,000 was deposited into a savings account at the bank because they were unsure how to invest their money. They also wish to set up a RESP for Lindsay, so she has her education costs covered when she goes to school. Steve and Mary have disability insurance and health care insurance through their employers but neither has a group life insurance plan. They know they both need to purchase life insurance, but they do not know what kind or how much to buy. They also need to understand the expected cost of the insurance policies. When considering life insurance, the Austin's also thought about setting up an emergency fund and are unsure how much they should put aside. Banking Chequing Account Balances $2500 As of March, 31 Bank Savings Account Balances $150,000 As of March, 31 Mary's TFSA $15,000 As of March, 31 Steve's TFSA $15,000 As of March, 31 Mary's RRSP $10,000 As of March, 31 Steve's RRSP $10,000 As of March, 31 Steve's Car (3 years old) Value $14,500 Based on similar cars listed online Mary's Car (1 year old) Value $33,500 Based on similar cars listed online Steve's Car Loan $14,500 Loan balance as of March 31 Mary's Car Loan $33,500 Loan balance as of March 31 Telephone & Internet $250 /month $1500 /month Car Insurance for both cars $2,800 / year Mary's Car Payment $625 /month Steve's Car Payment $500 /month Rent Recommend life insurance options for the Austin's. What type of policy do you recommend (Term, Universal or Whole Life) and why? How much insurance do they need and what is your rationale for your recommendation? What would be the cost of this insurance? Cite your research and show your work; simply cutting and pasting a screenshot is not sufficient. (Students should perform external research to determine the cost of life insurance policies. If you use internet research, provide a screenshot of the web page you collected the quote / information from in an Appendix) Customer Profile: Mr. & Mrs. Austin Mary and Steve Austin have been married for 5 years and have a 4-year-old daughter named Lindsay. The Austin's are starting to think more about their future with the aim of implementing their short-term and long-term lifestyle goals and financial plans. Mary and Steve are both aged 35 For their immediate future they have decided they want to purchase a new car, and their first home. They would like to replace Steve's car with a new BMW; total retail price including taxes is $52,522. The Austin's are unsure whether to purchase the vehicle using their savings or borrow the funds from the bank or take advantage of BMW's dealership financing available. They are also looking to purchase a house with an approximate purchase price of $600,000. They are very excited as both Mary and Steve have never owned a home before. Steve Austin works as a manager for a robotics manufacturer and earns $100,000 gross annual income ($75,384 after tax). Mary works for a small local manufacturing business as a chief accountant earning $125,000 gross annual income ($89,322 after tax). Mary and Steve want to retire at age 60 and are willing to take on some additional risk if this assists in achieving their lifestyle goals faster. Two years ago, Mary received an inheritance from her late father in the amount of $200 000. With this money they each opened a TSFA (Tax Free Savings Account) and invested $15 000 each. They also opened an RSP for the first time and contributed $10,000 each. The residual balance of the inheritance, $150,000 was deposited into a savings account at the bank because they were unsure how to invest their money. They also wish to set up a RESP for Lindsay, so she has her education costs covered when she goes to school. Steve and Mary have disability insurance and health care insurance through their employers but neither has a group life insurance plan. They know they both need to purchase life insurance, but they do not know what kind or how much to buy. They also need to understand the expected cost of the insurance policies. When considering life insurance, the Austin's also thought about setting up an emergency fund and are unsure how much they should put aside. Banking Chequing Account Balances $2500 As of March, 31 Bank Savings Account Balances $150,000 As of March, 31 Mary's TFSA $15,000 As of March, 31 Steve's TFSA $15,000 As of March, 31 Mary's RRSP $10,000 As of March, 31 Steve's RRSP $10,000 As of March, 31 Steve's Car (3 years old) Value $14,500 Based on similar cars listed online Mary's Car (1 year old) Value $33,500 Based on similar cars listed online Steve's Car Loan $14,500 Loan balance as of March 31 Mary's Car Loan $33,500 Loan balance as of March 31 Telephone & Internet $250 /month $1500 /month Car Insurance for both cars $2,800 / year Mary's Car Payment $625 /month Steve's Car Payment $500 /month Rent Recommend life insurance options for the Austin's. What type of policy do you recommend (Term, Universal or Whole Life) and why? How much insurance do they need and what is your rationale for your recommendation? What would be the cost of this insurance? Cite your research and show your work; simply cutting and pasting a screenshot is not sufficient. (Students should perform external research to determine the cost of life insurance policies. If you use internet research, provide a screenshot of the web page you collected the quote / information from in an Appendix)