Mr. Graham’s Case Harvard Case Solution & Analysis

Answer Number One:

Mr. Onslo Graham and his wife Daisy Graham have been married for almost 30 years and livein a city with their adult child Rose, aged 28. Mr. Onslo and Rose are associated with a professional hockey team in their hometown since the past 25 years.

Mr. Onslo earns about $137,500 per annum. They also had aninvestment in some equity securities, dividends and interest from those securities are reinvested. Mr. Onslo also contributes $9600 to his 401K. The couple hasa gigantic list of expenses which mainly includes insurance expenses such as Large-cap funds, Mid-cap funds, High yield bond funds, etc. They are currently planning their retirement plan and trying to find out legitimate ways to reduce tax liability in the event of thedeath of any of the individual.

Answer Number Two:

There are many areas in the expenses summary of Mr. Graham that can be reduced to improve the cash flow position. Firstly, Daisy’s hobbies cost $500 per year this can be cutto improve the liquidity position of Graham. Additionally, the entertainment might be too expensive; Mr. Graham can reduce the entertainment cost to improve its liquidity position. Furthermore, charitable expenses, vacation expenses, and travel expenses can be controlled to improve the cash flow position.

Answer Number Three:

Considering the age of Mr. Graham, universal life insurance might be most appropriate for Mr. Graham. Universal Life Policy is also known as aflexible premium or adjustable life. It provides cash value based on the current interest rates permanently. The primary attribute that distinguishesbetween Universal Life policy and Whole Life policy is that the cash values, thelevel amount of protection and premiums can be adjusted as per the needs of the insured. The cash value generates areturn which is decided by the insurance provider with a guarantee that profits will not blow to an individual level.

Mr. Graham’s Case Harvard Case Solution & Analysis

Answer Number Four:

Health insurance is a typical type of insurance that pays the medical and surgical expenses incurred on behalf of the insured or reimburse the expenditure incurred by the insured. Even though Mr. Graham and his wife are quite healthy till now but they still have to take certain factors into consideration regarding health insurance.

Firstly, the age factor plays asignificant role in the health insurance policy. The young people usually do not go to thedoctor often,despite the fact that they have an increased risk of accidents. Premium is usually charged lower for the younger individuals and higher for the elder people.

Another critical factor is the profession; If the person is associated with a profession which has a high adverse impact on health, it might be possible that the individual will have to pay more premium.

Answer Number Five:

If Mr. Onslo replaces 90% of his salary, salary is increased by 5%, social security and inflation are increased by 4% and also the life expectancy is expected as 29 years then this will result in a monthly benefit of $1,114.......................

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