Instructions:

Read the following case and provide responses for the corresponding questions.

Allan, age forty-two and Jenny, age thirty-nine, are a married couple with two children, ages eight and eleven. Allan earns JMD$18million annually as an accounting executive for an International firm based in Jamaica. Jenny earns JMD $5million annually as an administrative assistant with the local Education Ministry. She works only during the school term so that she can be at home with the children when they are on summer break.

Allan and Jenny purchased their home ten years ago. It is currently valued at JMD $49 million, with an outstanding mortgage of JMD$22 million. They have one family car valued at JMD$4.5 million, which has an outstanding loan amount of JMD$450,000. Allans employer supplies him with a company car for which all expenses are paid. (For the purpose of this exercise, treat all debts as payable upon death of either party).

Allan is contributing to a retirement plan sponsored by his employer, who matches his contributions up to 5 percent. The current value of his tax-deferred contributions, employer contributions, and investment earnings is JMD$36 million. Allan also has a group universal life policy through his employer in an amount equal to his salary (JMD$18 million per annum) and has purchased additional coverage up to two times his annual salary.

Jenny has a retirement plan with her employer that pays a specified benefit. Based on retirement age of 65, she would receive approximately JMD$70,000 monthly. If Jenny predeceases Allan, he would be entitled to 50 percent of her monthly benefits starting at age 65. The Education Ministry provides up to JMD$2.5 million in group insurance coverage to Jenny and she has no other life insurance coverage. Allan and Patricia are also both eligible to receive National Insurance Scheme (NIS) benefits in retirement.

The needs approach or human life value approach can be used to determine whether Allan and Jenny have sufficient life insurance in the event of the premature death, by evaluating the familys current financial situation, economic need and available resources such as existing life insurance and retirement plans. If additional coverage is needed, types and sources of life insurance are to be discussed.

Based on the facts presented in this case, provide responses to the following questions:

1. Conduct and briefly report on needs analysis for the family to cover the following areas:
   1. Complete the table below with Expense Needs:

Category of Need	Need	Value JMD$
Final Expenses	Funeral costs	1,500,000
Debt Elimination Needs	Satisfy outstanding mortgage	?
	Fund Childrens education	27,000,000
	Eliminate Credit Card Debt	600,000
	Eliminate car loan	?
	Total Elimination Needs	?
Familys Living Expenses Needs	Household Maintenance expenses	23,000,000
	Other living expenses	31,000,000
	Child care expenses	0
	Total Family Living Expenses Needs	?

2. Special Needs that the family may have in addition to maintaining current standard of living for example expenses such as gifts to charity or foundation, emergency fund to cover unanticipated expenses following Allans premature death.
3. Retirement Income Needs (After familys living expenses are calculated, how much income would Jenny need in retirement consider her age and Allans death and other sources of retirement income including her pension and NIS. Would she need to supplement her retirement income, explain)?
4. Total needs
5. Assets Available and Total Life Insurance Needs

2. What is the impact of premature death on this family (include persons who would be affected and why)?
3. What are the familys life insurance needs?
4. What amount and what type of policies, if any should be purchased ?
5. Research and recommend policies available in your country that you would recommend to Allan.