The policy owners are Wendy and Marty Byrde because they purchased several types of insurances which represent financial coverages that are to be paid upon their deaths. Moreover, they are the owners as they can control the policy.
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The insured people are also Wendy and Marty Byrde. They are both registered in the Whole Life Insurances and the disability ones as the insured.
The primary beneficiaries are Wendy and Marty’s children, Charlotte and Jonah, who will receive coverage, namely death benefits after their parents pass away. The Byrdes’ goal was to leave money for their children’s post-secondary education for the following four years after their deaths. Another beneficiary would be The Canadian Centre on Substance Abuse and Addiction, which is supposed to receive a donation of $150,000 upon the insureds’ deaths. Moreover, Marty’s long-time loyal assistant, Ruth, should receive full funding for care. No contingent beneficiaries were identified in the case study.
The life insurance policy has two types of value: a face value and a cash one. The former is a death benefit that is granted after the insured’s death to the beneficiaries assigned by a policy owner. It is typically written in the table of benefits of the insurance policy. Face value primarily contributes to the entire value of life insurance and the monthly payments called the premium. Therefore, the face value that all the beneficiaries of Marty and Wendy will receive equals $1,000,000 as their insurance guarantees $500,000 for each one, respectively.
The type of health policy they use is named the Whole Life Insurance, which presupposes insured person’s coverage for the duration of their lives as long as they pay the premium on time. Such an insurance policy usually serves for 10 or 30 years. However, the period can be extended on one’s demand.
Despite that their insurance policy covers many aspects, some riders can be added. For instance, they can add Accidental Death Rider as recently they encountered robbery in their own house and could have been potentially killed. Moreover, sometimes they use heroin, which can also result in an accidental death. Furthermore, they may include Accelerated Death Benefit Rider if any of the partners dies of a disease as the Byrdes identified heart problems.
A disability is a physical or mental disorder caused by an accident or illness that wholly or partially limits a person’s ability to perform a job. Both spouses, Marty and Wendy, personally own disability insurance of $ 3,000 per month and $ 2,500 per month, respectively (the maximum of the plan), which is not indexed and taxable. As a result, they should both keep their occupation, since it includes numerous advantages. Such insurance will allow them to receive coverage if they cannot comply with the duties of a specific occupation while capable of doing other activities. Marty is a self-employed financial advisor, and Wendy works in the sphere of Public Relations. Thus, it would be beneficial for them to receive full disability coverage if they cannot do their jobs. Despite the fact that it is an expensive option, the insured will continue to receive full payment until they can pursue their profession, even if they take up another job not connected to their previous occupation.
A Case of Robbery
Because of the prevailing circumstances, the spouses have to insure their property as they faced the robbery. Marty and Wendy recently had a terrible experience, which could have been fatal. When they returned home after a night out to the movies, they found someone in their house. The robber held them at gunpoint, and several personal items were taken from them. Therefore, this case can be considered purple, since robbery occurs where violence or the threat of violence is used to take property from a person. Technically, the couple was threatened with a weapon so that they could have been injured or even killed. Therefore, they would also need homeowner insurance that would keep property value high.
The Grace Period
The period for the clients to decide whether they need insurance or not is named the grace period. This period allows a policy owner to make a premium payment so that their coverage would not expire. The amount of time available depends on the type of policy; thus, it can last 24 hours up to a month. However, paying after the due date may impose some financial fines on a policy owner. If there is a default, the is no chance to cancel the date of payment; therefore, a person will have to go through the entire insurance policy application again.
Risk Management Strategies
Spouses try to elude any difficulties associated with their insurance programs. Primarily, they use the risk avoidance strategy, which aims at minimizing any risk exposure. Nevertheless, they resort to a retention strategy, which implies acknowledging the potential risk as given. For instance, they use credit cards and do not make enough savings to repay the loans. Moreover, they have their mortgage unpaid, which causes some risk to the family; however, they try to manage their finance.