Ethan 35 and Evangeline 30, are both currently working full time and take home a total of $13,500 per month. They have been married for six (6) years and purchased their first home five years ago. They have twins aged 5 years old. They also have a mortgage of $600,000 and own two (2) cars. The outstanding debts on both cars are $60,000. Their living expenses are $4,500 per month (food, utilities, rates etc.). Home and contents insurance is $150 per month, health insurance $500 per month, and car insurance $120 per month. In the event of his death, Ethan would like to provide for the education of both of his children.

They also anticipate an annual income requirement of $40,000 if either one of them should die. The real value of the future education costs for both of his children is $20,000. They have no personal insurance policies. They have recently decided that they need to review their personal insurances. Both of them would like to retire at the age of 65.

1. Identify four types of personal insurance policies.
2. Identify one personal insurance policy that would be appropriate for Ethan and Evangeline.
3. Ethan & Evangeline purchased their home in 2019 for $800,000. They borrowed $650,000 for the purchase of the house and insured the home for $600,000. They have been diligently paying the insurance premium each year without revising the cover upwards. Unfortunately, the home was completely destroyed in floods.

They submitted an insurance claim. The loss assessor puts a value of $600,000 on the loss. They submit an insurance claim. How much can they expect to receive? Explain why?