You can ignore any irrelevant information in the description that is not relevant to the question below. At the end, this case will be updated and continued to the Second Case Study.


35 years old

International Shipping Co.’s Attorney

Earns $75,000 per year

Julie is in good health.

32 years old

Action Staffing Resources’ administrative assistant

Earns $35,000 per year

Frank and his family are in good health.


I’ve been married to my husband for four years.

I have one child, Robert, who is four years old.

I’d like to have another child within the next two years.

Tolerance for medium-to-high risk

Are unsure that Social Security will provide them with an adequate retirement income

Make a donation to their alma mater’s alumni fund

Every year, I go on missionary trips to underdeveloped countries. Robert

While his parents are at work, Robert attends a day care center. He has also appeared in commercials for Fancy Pants, a high-end baby clothing company. Frank and Julie want to send Robert to a state university after he graduates from high school. They hope to begin saving for this expense within the next five years. Golden, Paul, and Rose Both of Frank’s parents, Paul, 58, and Rose, 55, are in good health. They intend to contribute to Robert’s education as well as the college education of any future children Frank and Julie may have. They have adequate insurance coverage and are financially secure.

Riches, Harry and Alice Julie’s father, Harry, was diagnosed with Alzheimer’s disease two years ago at the age of 68. He is being cared for in a nursing home. Julie’s mother, Alice, is 60 years old and in good health.

Objectives and Goals

Retire in 20 years with a retirement income that is 80% of your preretirement income.

Within the next five years, start an education fund for Robert (and any other children).

Have enough life insurance in place in the event that either Frank or Julie dies, so that the mortgage is paid off, an adequate emergency fund is established, and the surviving spouse has $250,000 to cover any children’s needs.

Frank and Julie have asked you to review their insurance coverage as well as their overall financial situation.

Assume Frank dies of a heart attack and Julie receives the death benefits from his life insurance policies all at once. What amount does she have to include in her gross income?

A. nil

$50,000 B.

$150,000 C.

$200,000 D.

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