Zac and Mary Johnson

Background:

Zac and Mary Johnson are 36 and 34 respectively. Zac has recently been offered a new job as an IT engineer with a newly created software company that helps churches fully integrate their giving, attendance, and member data software where he can earn $102,000 per year. Mary currently stays home and homeschools their two children (Brayden (10) and Cora (7)) although she holds a CPA license in the state of Indiana. Zac and Mary also have two Mastiffs (Fun and Games). Zac and Mary have been married for 14 years and currently live in a rural area outside Indianapolis IN. 

With great excitement, Zac and Mary have just realized that they will be expected their third child. Knowing his type A personality, Zac begins to feel anxious that he has not done an adequate job of protecting his family should something happen to him, especially with the anticipation of a third child. 

Zac approaches you in your local men’s bible study and asks to meet with you regarding a review of his current insurance. He seems rather bothered by where he stands, specifically not knowing how much life insurance he really should have. 

In the course of your follow-up meeting, he gives you the following information:

v Current salary: $102,000

v Annual salary increase: 3.0%

v Retirement Age: 67

v Expected inflation rate: 3%

v Final expenses: $30,000

v Income Tax bracket: 25%

v Total monthly social security benefit per child until the child reaches 18: $3200

v College education costs $25,000 per year per child in today’s dollars starting at age 18 for four years.

v Education inflation rate: 5%

v Monthly income needs for spouse until last child is age 22: $5500

v Personal Consumption: 20% of income

v Investment returns expected to be 6%

v Mortgage and debt repayment (as it stands today) is: $285,000

                                                Questions to be solved 

Using the attached information, you will analyze different products from different companies to determine a recommended strategy within the case study.  The products identified in this workshop were chosen at random and are not intended to be an exclusive list of variable annuity products.  

Variable Annuity Options:

• Jackson      Annuities – Elite Access Variable Annuities
• AXA      Accumulator Series Variable Annuities
• MetLife      FlexiChoice Annuities

Using the web, search for the specific products above and complete the following:

1. Construct      an excel spreadsheet that compares the three products and insurance      companies.  
2. Make      sure you evaluate the following items in your excel sheet: 

a. Payout period

b. Premium options

c. Benefit options

d. Fixed, index, or variable

e. Recommended Riders 

i. GMAB

ii. GMIB

iii. GMWB

Provide Zac and Mary a summary of your findings and your recommendation in a word document.

Zacand Mary Johnson

Background:

Zac and Mary Johnson are 36 and 34 respectively. Zac has recently been offered a new job as an IT engineer with a newly created software company that helps churches fully integrate their giving, attendance, and member data software where he can earn $102,000 per year. Mary currently stays home and homeschools their two children (Brayden (10) and Cora (7)) although she holds a CPA license in the state of Indiana. Zac and Mary also have two Mastiffs (Fun and Games). Zac and Mary have been married for 14 years and currently live in a rural area outside Indianapolis IN.

With great excitement, Zac and Mary have just realized that they will be expected their third child. Knowing his type A personality, Zac begins to feel anxious that he has not done an adequate job of protecting his family should something happen to him, especially with the anticipation of a third child.

Zac approaches you in your local men’s bible study and asks to meet with you regarding a review of his current insurance. He seems rather bothered by where he stands, specifically not knowing how much life insurance he really should have.

In the course of your follow-up meeting, he gives you the following information:

· Current salary: $102,000

· Annual salary increase: 3.0%

· Retirement Age: 67

· Expected inflation rate: 3%

· Final expenses: $30,000

· Income Tax bracket: 25%

· Total monthly social security benefit per child until the child reaches 18: $3200

· College education costs $25,000 per year per child in today’s dollars starting at age 18 for four years.

· Education inflation rate: 5%

· Monthly income needs for spouse until last child is age 22: $5500

· Personal Consumption: 20% of income

· Investment returns expected to be 6%

· Mortgage and debt repayment (as it stands today) is: $285,000

Using the attached information, you will analyze different products from different companies to determine a recommended strategy within the case study.  The products identified in this workshop were chosen at random and are not intended to be an exclusive list of variable annuity products.  

 Variable Annuity Options:

· Jackson Annuities – Elite Access Variable Annuities

· AXA Accumulator Series Variable Annuities

· MetLife FlexiChoice Annuities

 Using the web, search for the specific products above and complete the following:

1. Construct an excel spreadsheet that compares the three products and insurance companies.  

2. Make sure you evaluate the following items in your excel sheet:

a. Payout period

b. Premium options

c. Benefit options

d. Fixed, index, or variable

e. Recommended Riders

i. GMAB

ii. GMIB

iii. GMWB

Provide Zac and Mary a summary of your findings and your recommendation in a word document.