Eddie and Kaye Turner aged 39 and 37 respectively, have four children aged

4,6,8 and 10. They own their own home, which has a current market value of
$500,000, and have a mortgage of $150,000.
Eddie is a self-employed butcher who employs 3 staff. Eddie and Kaye are in
partnership and share profits equally.
Eddies annual income is $80,000. Kaye works part time helping in the
butchers shop and also part time as a schoolteachers aide; she also receives
$15,000 as a salary from the school.
Both Eddie and Kaye contribute to superannuation funds. Eddie has an
accumulation fund, which currently has a balance of $250,000. Kaye joined
her fund more recently and has a balance of $100,500. Eddie has affected a
term life cover on his life for $200,000 with Kaye named as the beneficiary.
Kaye does not have any term life insurance cover.
Eddie and Kaye have assets, which are mainly in the butchers shop, totaling
$150,000. The turners have a car each. Eddies is a 2014 model, which is
leased and has $30,000 outstanding on it at present.
Kaye has a 2009 van so that she can transport the children to school and
various sporting clubs. Her van is valued at $10,000 and is fully paid for.
Personal loans, credit cards and other outstanding debts amount to $20,000
The familys monthly expenses amount to $8,000. The Turners feel that all
their children should receive a university education and expect them to be
dependent until they turn 21 years of age. They expect to contribute a total of
$200,000 to the cost of the childrens university education. As each child
ceases to be dependent, the monthly expenses will reduce by $1,000 a
month. Eddies life expectancy is 82 and Kayes is 86.

Q1 (2.5 Marks) Calculate the amount of cover required for the familys
future in the event of Eddies death.
Q2 (2.5 Marks) Calculate the amount of cover required for the familys
future in the event of Kayes death.
Q3 (1 Mark) You have advised the turners of the amount of insurance
cover they need. They find it hard to believe that such a large amount is
needed. They say that, by insuring for a lower amount and investing the
funds, the required amount could be achieved.
Explain to them the problem with this approach.
Q4 (1.5 Marks) Discuss the need for the following covers for both Eddie &
Kaye (3 -4 Sentences each question)
a)

Total and permanent disability insurance cover

b)

Trauma insurance cover

c)

Income protection insurance cover

Q5) (1 Mark) When talking about income protection insurance, Eddie &
Kaye ask if there is some way they could cover their business overheads
against a time when the butchers shop would have to close for a month or so
as a result of some unknown health risk.
Explain the business overheads insurance and advise the amount of cover
that should be taken. (6 7 sentences)
Q6) (1 Mark) When completing the personal health questionnaire Kaye
indicates that she has had no history of breast cancer. However, 3 months
after completion of the contract, Kaye has tests, which confirm some minor
breast cancer tumours.
Discuss whether Kayes term life insurance is still valid. (6-7 Sentences)

Q7) (0.5 Marks) Outline insurances other than the personal risk covers
discussed so far in this case study that Eddie & Kaye should have as part of
their overall risk protection plan. (5 -6 sentences with examples)