Jessica is a 50year old Highly Accomplished Teacher with 25 years' fulltime experience in secondary education. Jessica had a gross income from employment of $107,224 for the 20202021 financial year. Jessica is a member of a teacher's union and paid 1% ($1,072.24) of her wages in union fees for the 20202021 year. Jessica is single.

Jessica's assets include her twobedroom innercity apartment, which is valued at $730,000, a car valued at $31,500, furniture and other personal effects valued at $86,500, a term deposit account with a balance of $22,500, earning $168.75 in interest for the 20202021 year, and a superannuation account balance of $565,625. Jessica contributes a required seven per cent of her annual salary towards superannuation, which also receives a contribution equivalent to 12.5 per cent of her salary from her employer, the state government (also the fund sponsor). Jessica's superannuation provides her with life insurance of $350,000, which is included as part of the term life and total and permanent disability cover provided within the fund. The beneficiary of Jessica's policy is her 77year old mother, who also lives with Jessica. Jessica's mother is in receipt of a full aged pension, which is her only source of income. Jessica's mother has limited assets, these being represented in a small amount of furniture and her personal effects (valued at $47,000).

Jessica's liabilities include a mortgage against her apartment of $285,000, with a 20 years remaining term and current monthly payments of $1,652.89, a car loan on which she owes a remaining $10,000 over the next 36 months with monthly repayments set at $308.32, and a credit card, which currently has a debit balance of $2,955. As of the end of 20202021 she also had a remaining HELP debt of $5,325 as a result of just completing studies towards her Master of Teaching.

Note the following details with respect to Jessica's insurance and insurance requirements:

Jessica has silver level hospital cover and a relatively high level of extras cover.

Jessica wishes for her mother to have a lump sum of $20,000 to cover Jessica's funeral and any legal costs in the case of Jessica's death, and an emergency fund of

$25,000.

Jessica wishes for her mother to be able to remain in the apartment until such time as she needs to sell this to fund agedcare accommodation. Jessica assumes that the sale value of the property will be enough to fund this accommodation when needed.

Jessica has estimated that, in the case of her death, her mother will need

approximately $16,500 per year in excess of her pension to cover costs such as Strata fees, council rates, home contents insurance, and property repairs and maintenance.

For the purposes of this assessment, you may assume that Jessica's mother's pension entitlement will not be affected by her receipt of benefits under Jessica's superannuation and life insurance policies.

You may assume that her mother has a life expectancy of 92 years and is likely to live in the apartment until around age 85 (so for around 8 years) when she is assumed to sell the apartment to fund her movement to aged-care accommodation.

You may also assume that:

Any assets/cars listed to be sold are recorded at market values.

The term deposit is still there, as per her balance sheet.

This is 30 June 2021, if you are to determine current insurance needs after paying her net tax bill as you wish.

Both Jessica and her Mum might not want to sell their furniture and other personal effects.

Only Jessica is your client.

Q: What do you recommend with respect to the adequacy of Jessicas current insurance cover?