Life Insurance Advice and Ongoing Service

The assignment tasks involve completing an application form for life cover, providing ongoing service where requested by the client, and recommending the best option for the client based on their needs. The student must also explain the value of the recommended services to the client and confirm their understanding of the fees associated with these services.

Insurance 1 of 29
Provide advice in Life Insurance
FNSASICX503A
Your details:
Name: Patrick Muturi
Address: 3079
Phone: [phone]
Company name Britam
Email: [e-mail]
Your assessment task
Keep a copy of your assessment task for a period of 12 months.
Submit your assessment to our Education Team via [e-mail]
Plagiarism Statement
All assessments must be your own work and not a result of plagiarism or collaboration
with other students or workmates.
Assessment
The pass mark is 70% for each element.
If you do not achieve this, you will receive feedback via your email address and be asked
to resubmit your assessment for a second marking.
Assignments will not be returned to you.
Task Assessments Elements Target
Mark
Pass
Mark
Actual
Mark
1 Establish relationship with client and identify client’s objectives,
needs and financial situation. FNSASICX503A.1 79 55
2 Analyse client’s objectives, needs, financial situation and risk
profile to develop appropriate strategies and solutions. FNSASICX503A.2 100 70
3 Present appropriate strategies and solutions to client and
negotiate a financial plan, policy or transaction. FNSASICX503A.3 58 41
4 Agree the plan, policy or transaction and complete
documentation FNSASICX503A.4 32 22
5 Provide ongoing service where requested by client. FNSASICX503A.5 24 17
Total 293 205
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Insurance 2 of 29
Introduction Name: ____________________
Objective The objective of this Assessment Task is to assess that you have the skills
and knowledge required to provide Life Insurance advice to client.
Elements to
be assessed
To achieve this objective, you will need to demonstrate your ability to:
 Establish relationship with client and identify client’s objectives, needs and
financial situation;
 Analyse client’s objectives, needs, financial situation and risk profile to
develop appropriate strategies and solutions;
 Present appropriate strategies and solutions to client and negotiate a
financial plan, policy or transaction, and
 Agree the plan, policy or transaction and complete documentation; and
 Provide ongoing service where requested by client.
The assessment tasks in this assessment will allow you to demonstrate your
knowledge and skills in relation to these elements.
Assessment
process
Start by:
1. Reading the Assessment Tasks in this document,
2. Type your answers to the assessment tasks into this template document
(hand-written answers are not accepted)
3. Submit your completed document by emailing it to
[e-mail]
Don’t forget to keep a copy and retain it for 12 months.
Need help? If you have any questions or would like to request a digital copy of this
assessment task, please email the Mentor Support Team at
[e-mail]
Related
Assessments
Upon successful completion of this assessment, students who have enrolled to
provide personal advice in Life Insurance will be awarded the following Unit
Competencies:
 FNSASICX503A Provide advice in life insurance
 FNSINC501A Conduct product research to support recommendations
 FNSIAD501A Provide appropriate services, advice and products to clients
 FNSCUS505A Determine client requirements and expectations
 FNSCUS506A Record and implement client instructions
Those enrolled to provide general advice in Life Insurance will be awarded the
following Unit Competency:
 FNSIAD301A Provide general advice on financial products and services
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Insurance 3 of 29
Assessment Task 1 Name: ____________________
1.0 Establish
relationship
with client
FNSASICX503A.1
Once the initial interview with a potential or new client is arranged1, the first
step in the financial services advice process is to establish a relationship
with the client and identify their objectives, needs and financial situation.
This will require that:
1. The financial products and services knowledge level of the client is
established
2. Enquiries in relation to Life Insurance products and services are
responded to by explaining the range of products and services available
and their relevant fee and charging methodology
3. The client is informed of the role of the adviser and the licensee or
principal responsible for the adviser’s conduct including procedures for
complaints handling and the circumstances in which they should be
engaged
4. The client’s personal, financial and business details are obtained and their
needs identified by encouraging expression of their objectives and goals
5. The product risk profile of the client and their expectations of cash flow
and relevant taxation obligations are established.
In preparing your answers, you should refer to the Life Insurance Case Study,
and for the purposes of the assessment, assume that the initial interview
incorporates the fact-finding interview.
(79 Marks)
1 This element may also apply to established clients whose circumstances have changed and where you wish to
provided ‘subsequent’ advice, as part of providing an ongoing service.
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Insurance 4 of 29
Assessment Task 1.1 Name: ____________________
1.1 Establish a
relationship
with the client
FNSASICX503A.1.1
FNSASICX503A.1.2
FNSASICX503A.1.3
You are preparing for the initial (and fact finding) interview with the client.
This Assessment Task requires you to consider:
 The documentation you can provide the client prior to, or at the beginning
of, the interview.
 What you might ask the client to do to prepare for the first interview.
 Strategies you will use to build rapport during the interview process
 What aspects of the FSG you will explain to the client.
Preparation is the key to a successful outcome.
(a) Give some thought to the sort of things you would cover. Include any legal
requirements and other documentation you can provide which may be helpful in the
interview.
No Type your answers below Mark
1. Evaluation of the potential client insurance needs and give them information about available
policies. / 1
2. Premiums for the various policies and the cash value for each and if there are any discounts on the
premiums. / 1
3. Evaluate what is the client’s family income and what the dependants will be compensated in order
to maintain their life style in case of premature death and also the grace period of the premium and
the date of maturity / 1
4. Enlighten the client on their duty of disclosure to the insurer and what constitutes to double
insurance. / 1
5. Documents required are; birth certificate of beneficiary minors or incase of adoption their order
effecting adoption, Identification cards, passport or driver’s license of spouses and marriage
certificate. / 1
(b) What would you ask these clients to prepare and bring to the initial interview?
No Type your answers below Mark
1. Their net annual income and that of their spouse. / 1
2. The medical condition of the clients, any hazardous pursuits or immediate family medical concerns. / 1
3. Contact of professional adviser who include their doctor, accountant and lawyer. / 1
4. Their investment and superannuation assets. / 1
5. Their liabilities in terms of mortgages and personal loans. / 1
Sub-total /10
Continued
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Insurance 5 of 29
Assessment Task 1.1, continued Name: ____________________
(c) To establish a relationship with the client, what strategies or approaches might you
use to build rapport and trust during the interview process?
No Type your answers below Mark
1. Demonstrate to the client you are interested in their well-being. / 1
2. Use open ended questions to discover personal information from the client. / 1
3. Identifying common grounds or ideas with them. / 1
4. Demonstrate empathy, whereby you understand the client from their perspective. / 1
5. First appearance, that is; your physical appearance and representation in terms of language and
salutation should inspire confidence to the client. / 1
(d) What are the four points you must cover when presenting an FSG?
FNSASICX503A.1.1
No Type your answers below Mark
1. The financial services and products that the insurer covers. / 1
2. The fees paid for using the financial service guide. / 1
3. Disclosure statement giving the terms and conditions. / 1
4. What happens and channels to follow to make a complaint. / 1
(e) What types of personal insurance strategies/products do you expect to provide advice
on?
FNSASICX503A.1.2
No Type your answers below Mark
1. Income protection insurance. / 1
2. Life cover insurance. / 1
3. Total and permanent disability insurance. / 1
4. Trauma cover insurance. / 1
Sub-total /13
Continued
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Insurance 6 of 29
Assessment Task 1.1, continued Name: ____________________
(f) What are the benefits of explaining these products and strategies to your clients?
FNSASICX503A.1.1 and 1.2 (a)
No Type your answers below Mark
1. Client is able to understand the various types of products and make an informed decision on which
suits them. / 1
2. So that the client can be able to evaluate whether he needs the insurance policy. / 1
3. Client is able to choose the best policy based on how long he needs it. / 1
(g) List the different types of fees you could charge these clients.
FNSASICX503A.1.2 (b)
No Type your answers below Mark
1. Statement of Advice (SOA) fee. / 1
2. Fee for implementing financial advice. / 1
3. Financial products commissions. / 1
(h) What are the benefits of explaining these fees to the clients?
FNSASICX503A.1.2 (b)
No Type your answers below Mark
1. So that the client can be informed on how much he is expected to pay for the services. / 1
2. Client can decide whether to negotiate the fees. / 1
3. So that the client can decide whether to go ahead with the advice or discard it. / 1
4. Help the client to compare your fees with other financial advisors. / 1
(i) Outline the three steps your clients should take if they have a complaint or dispute
prior to contacting the ASIC.
FNSASICX503A.1.3 (b)
No Type your answers below Mark
1. Contact the business about the complaint. / 1
2. Make formal complaint to the business. / 1
3. Contact an independent complaint scheme. / 1
Sub-total / 13
Continued
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Insurance 7 of 29
Assessment Task 1.2 Name: ____________________
1.2 Identify
your client’s
objectives,
needs and
financial
situation
FNSASICX503A.1.1
FNSASICX503A.1.4
FNSASICX503A.1.5
You can now begin identifying the clients objectives, needs and financial
situation.
This Assessment Task requires that the:
 Client’s personal, financial and business details are obtained and their
needs identified by encouraging expression of their objectives and goals
 Product risk profile of the client and their expectations of cash flow and
relevant taxation obligations are established.
Attention to detail, methodical enquiry and documentation are required.
(a) What techniques or tools could you use to gather information about your clients?
No Type your answers below Mark
1. Behavioral insight surveys. / 1
2. Questionnaires. / 1
3. Personal interviews. / 1
4. Case study / 1
(b) Using the information about the client provided in the case study, answer the fact
finding questions in the table below about the client’s personal and business details.
FNSASICX503A.1.4 (a)
No Fact Finding Questions Type your answers below Mark
1. What are the clients’
names and their ages?
Bill Smith who is 42 years old.
Mary who is 40 years old. / 1
2. What are the names and
ages of the clients’
dependants?
Harry who is 8 years old.
Diana who is 4 years old.
/ 1
3. What are the clients’
occupations or
employment status?
Bill Smith is a partner in a heavy engineering business.
Mary is a part time fitness instructor.
/ 1
4. What are the clients’
career or business plans
for the future?
Bill would like to grow his company and increase profits.
Mary would like to get back to full employment.
/ 1
5. Do the clients have any
health issues? What is
their health status?
They do have any health issues and their status is good health.
/ 1
6. Are the client’s smokers
or non-smokers?
The clients are non smokers.
/ 1
Sub-total /10
Continued
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Insurance 8 of 29
Assessment Task 1.2 Name: ____________________
(c) Using the information about the client provided in the case study, answer the fact
finding questions in the table below about the client’s personal and financial details.
FNSASICX503A.1.4 (a)
No Fact Finding Questions Type your answers below Mark
1. What Life or other
insurance arrangements
do the clients have?
General insurance for their business, home building, home contents and
their cars.
Private health insurance. / 2
2. Do the clients have any
Wills and Powers of
Attorney?
They do not have any Wills or Powers of Attorney.
/ 1
3. What are the clients’ net
Assets & liabilities?
Net assets are $702,000.
Net liabilities are $150,000.
/ 1
4. What are the clients’
current incomes and
expenses?
Bill earns $100,000 per annum and Mary earns $30,000 per annum.
Their expense is $70,000 per annum.
/ 2
5. What assets did the
clients recently acquire?
Laptop computer and diamond bracelet.
/ 1
(d) What are the client’s objectives and goals?
FNSASICX503A.1.4 (b)
No Fact Finding Questions Type your answers below Mark
1. Long-term goals? Bill intends to grow the business.
/ 1
2. Medium-term goals? Taking their children to private secondary. / 1
3. Short-term goals? Mary intends to return to full time employment. / 1
(e) Using the information about the client provided in the case study, answer in the table
below the questions relating to the clients expectations of cash flow?
FNSASICX503A.1.5
No Questions Type your answers below Mark
1. How do the clients feel about the
returns on their superannuation?
They feel their super funds are invested in a balanced port
folio. / 1
2. What are the clients’ expectations
with regards to super returns?
They are unaware of what their future returns should be.
/ 1
3. What concerns do the clients have
about their current investments?
Bill is concerned on how their super funds are invested and
the fees charged. / 1
Sub-total / 13
Continued
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Insurance 9 of 29
Assessment Task 1.2, continued Name: ____________________
(f) Do you think that the clients are active or passive investors? Why?
FNSASICX503A.1.5 (i) (a)
No Questions Type your answers below Mark
1. Are the clients active or passive
investors?
Passive.
/ 1
2. Why? They are not aware of their past and future investment
returns. / 1
(g) Based on your answers in the table above, what do you think is the product risk
profile of the clients and why?
FNSASICX503A.1.5 (ii) (b)
No Risk Profile Question Type your answers below Mark
1. What are the clients’ risk profiles? Risky. / 1
2. Why? They are not able to make informed decision about their
investments. / 2
(h) Using the information about the client provided in the case study, answer in the table
below the client’s current relevant taxation obligations.
Refer to www.taxcalc.com.au (2011/2012 financial year) for assistance.
FNSASICX503A.1.4 (f)
No Taxation Obligations Calculations Mark
1. What is the gross (pre-tax) income
for each client?
Bill Smith $100,000.
Mary $30,000. / 1
2. What is the total tax payable by each
of them? (include medicare and flood
levy and applicable offsets)
Bill – $26,700
Mary - $4,050
/ 1
3. What is Bill and Mary’s surplus
income?
Bill - $73,300
Mary - $25,950 / 1
Sub-total / 8
Continued
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Insurance 10 of 29
Assessment Task 1.2, continued Name: ____________________
(i) Write down at least 2 open ended questions that you would use in the initial interview
to increase your understanding of your client’s goals and objectives, which are not
included in the Fact Finder.
Use open-ended questions start with What, How, When, Why and Where.
FNSASICX503A.1.5 (ii) (d)
No Line of Questioning Open Ended Questions Mark
1. Cash flow needs?
(eg. Do you have any known major
expenses coming up?)
When do you plan on growing your business?
How will you facilitate the funds of growing your business?
/ 2
2. School goals and objectives?
(eg. In what year will Harry start
secondary school?)
Why do you prefer taking your children to private schools
rather than public schools?
Where will you want your kids to attend college?
/ 2
3. Other issues or concerns they
might have?
(eg. What are your current plans
if something goes wrong?)
How would you fund any emergencies in case of any?
What your kids do meet the requirements for admission in a
private school of your choice?
/ 2
4. Current assets?
(eg. Are they happy with the
returns you are getting on the
funds in the bank account?)
What kind of account do you hold with the bank?
Why do you prefer to hold on to cash rather than bonds or
shares?
/ 2
(j) After the initial interview, what documentation would you ensure is in the client file?
FNSASICX503A.1.3
No Client File Documentation Mark
1. Tax return certificate. / 1
2. Identity card or drivers licence. / 1
3. Marriage certificate. / 1
4. Birth certificate of children or order effecting adoption. / 1
Sub-total / 12
Total / 79
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Insurance 11 of 29
Assessment Task 2 Name: ____________________
2.0 Analyse
client’s
objectives,
needs,
financial
situation and
risk profile to
develop
appropriate
strategies
and solutions
FNSASICX503A.2
The next step in the financial services advice process is to analyse client's
objectives, needs, financial situation and risk profile to develop appropriate
strategies and solutions.
This will require that:
1. An assessment of client’s needs is undertaken, utilising all information
gathered and taking into account client’s product expectations and specific
needs
2. Client is consulted throughout the analysis for further clarification where
necessary
3. The need for specialist advice is analysed and the client is referred to an
appropriate adviser for higher level or specialist advice if required
4. Product risk profile of the client is assessed and agreed demonstrating
understanding of the ASIC identified generic and specialist knowledge
relevant to the products being offered
5. An appropriate strategy to provide for identified needs and outcomes is
determined from analysis of products, client risk profile and assessment of
their needs
6. Relevant research, analysis and product modeling is conducted and an
appropriate solution, plan, policy or transaction drafted for presentation to
the client.
(100 Marks)
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Insurance 12 of 29
Assessment Task 2.1 Name: ____________________
2.1 Analyse
client
objectives,
financial
situation and
risk profile
FNSASICX503A.2.1
After the initial interview, you will conduct research to analyse the clients’
insurance needs.
Consideration needs to be given to seeking specialist advice and consulting
the client as required.
(a) To take into account Bill and Mary’s expectations and discuss their specific insurance
needs, how would you explain to Bill and Mary each of the following types of
insurances you could recommend?
FNSASICX503A.2.1 (b & c & d) and 1.5(i) (f)
No Insurance Types Insurance Definitions Mark
1. What is Term Life
Insurance?
It is a contract between the client and insurer where the insurer
pays a lump sum of money agreed upon in case of death of the in
exchange of premiums. / 1
2. What is TPD Insurance? This is a cover by the insurance company in case of sickness or
injury that inhibits an individual to work in the field he is trained,
educated or experienced. / 1
3. What is Crisis/Trauma
Insurance?
This is a cover taken which seeks to pay lump sum if the client is
diagnosed with a specific trauma and helps take pressure off the
stressful situation. / 1
4. What is Income Protection
Insurance?
It is an insurance policy where the client is paid benefits in case
they are incapacitated and unable to work. / 1
5. What is Business
Insurance? (Both capital and
revenue purpose)
This is a insurance policy taken against losses in both capital and
revenue in a business.
/ 2
6. What is General Insurance? This is an insurance policy taken against loss from a particular
financial event. / 1
Sub-total / 7
Continued
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Insurance 13 of 29
Assessment Task 2.1, continued Name: ____________________
(b) Bill asks you what the difference is between level and stepped premiums. How would
you respond?
FNSASICX503A.2.2
No Types of
Premiums
Definition
Mark
1. Stepped This is an insurance policy where by the premiums are increased at certain
predetermined times. / 3
2. Level It is an insurance policy that provides cover only for a specified duration of time
and only has death benefit. / 4
(c) Which type of premium, stepped or level, do you think would be the most appropriate
for these clients? Why?
FNSASICX503A.2.1 (c)
No Recommended Method of Premium Mark
1. Level insurance because they can budget for premiums because they are more constant and you
will also save more money in the long term. / 3
(d) Are Bill, Mary, their superannuation funds or Bill’s business able to claim any tax
deductions for any of the policies you have discussed above? If so, which one(s)?
(Answer either ‘Yes’ or ‘No’ in the spaces provided in the table below)
FNSASICX503A.2.1 (a)
No Insurance Types Tax Deductibility
MarkIndividual Owner Super Fund Owner Company Owner
1. Term Life Yes yes yes / 3
2. TPD Yes yes yes / 3
3. Crisis/Trauma No no no / 3
4. Income Protection Yes yes yes / 3
5. Business – Capital Yes yes yes / 3
6. Business – Revenue No yes no / 3
7. General Insurance Yes yes yes / 3
Sub-total / 31
Continued
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Insurance 14 of 29
Assessment Task 2.1, continued Name: ____________________
(e) Please discuss any alternative strategies or recommendations that you considered
but rejected for these clients, explaining why they were not as appropriate as the ones
you recommended above.
FNSASICX503A.2.3
Alternative Strategies not Recommended and why Mark
Stepped up premiums increase with age and are not recommended since you cannot
predetermine them. Furthermore they tend to get expensive as time passes. / 5
(f) What further documentation might be required from the client throughout the
analysis?
FNSASICX503A.2.2
No Further Documentation to be Requested Mark
1. Latest bank statements. / 1
2. Address proof. / 1
3. Three months salary slip. / 1
4. Certification Authority certificate. / 1
5. Income documents. / 1
(g) What higher level or specialist advice might you seek by referring the client to the
following advisers?
FNSASICX503A.2.3
No Specialist Adviser Reason for referral Mark
1. Accountant Evaluate the client’s assets and of what value they
are to their beneficiaries.
To determine on behalf of the client which tax forms
they are to receive and what to report at the end of
the year. / 2
2. Lawyer Establish the kind of documents required to be filed.
The client’s legal rights and obligations as pertaining
to insurance.
/ 2
(h) Referring to the client’s attitudes regarding insurance, what do you think their
combined product risk profile is, in relation to the insurance products being offered?
FNSASICX503A.2.4
No Client Risk Profile Mark
1.  Conservative  Moderate  Speculative / 1
Given this risk profile, how would it affect the strategies you may recommend? Mark
2. Both of them are of good health and are non smokers. However bill is a risk
taker. Mary is also keen on insurance after the death of her husband’s friend
and thus there is no risk of defaulting premiums but both of them are
gainfully employed. They are keen on life insurance which is in the long run. / 5
Sub-total / 20
Continued
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Insurance 15 of 29
Assessment Task 2.2 Name: ____________________
2.2 Develop
appropriate
strategies and
solutions
FNSASICX503A.2.5
FNSASICX503A.2.6
The next stage in the financial advice process is to develop appropriate
strategies and solutions. This Assessment Task ask you to:
 Determine an appropriate strategy to provide for identified needs and
outcomes from analysis of products, client risk profile and assessment of
their needs
 Conduct relevant research, analysis and product modeling and an
appropriate solution, plan, policy or transaction drafted for presentation
to the client.
(a) Explain to Bill and Mary why each of the following potential insurance strategies are
suitable and appropriate to meet their identified needs and risk profile. (An additional
reason is required for each strategy)
FNSASICX503A.2.5
No Potential Strategies Suitable Strategy Analysis/Reason for Recommendation Mark
1. Term Life Yes/No  Bill is the major bread winner and cover in the event of his
death, or, terminal illness is critical to maintain the family
home, funeral expenses and future goals.
 Death benefits are generally income tax free to the
beneficiaries. / 1
2. TPD Yes/No  Bill is the major bread winner and cover in the event of his
Total and Permanent Disablement is critical to maintain the
family home, living expenses and future goals.
 Additional benefits may be paid in case of permanent
disability. / 1
3. Crisis/Trauma Yes/No  Provide for medical costs in the event of a Trauma event
 The benefits can be collected when the client is alive unlike
life policy. / 1
4. Income Protection Yes/No  Provide Bill or Mary with monthly or fortnightly income to
replace income lost as a result of an injury or illness
 It cannot be canceled or renewal denied as long as the client
is paying premiums. / 1
5. Business – Capital Yes/No  It provides for a lump sum to be paid if the Bill’s interest in
the business needs to be purchased from Mary.
 Bill’s company is eligible to tax benefits where they are taxed
at a lower rate. / 1
6. Business – Revenue Yes/No  Covers the on-going costs of running the business in the
event that Bill or his partner is absent due to sickness or
injury
 Bill’s company is insured from illegal practices that may arise
from his employees. / 1
7. General Insurance Yes/No  Take out additional cover for new lap top and grand piano to
ensure adequate cover.
 They can be compensated in case of loss of the diamond
ring or if it gets damaged. / 1
Sub-total / 7
Continued
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Insurance 16 of 29
Assessment Task 2.2, continued Name: ____________________
(b) Draft the insurance recommendations for the six types of policies listed below.
Detail your analysis and financial calculations to determine potential benefits of each.
FNSASICX503A.2.6
No Insurance Types Amount of cover Required (including calculations) Mark
1. What level of Term Life
Insurance do you
recommend?
Savings + expenses=15000+70000=85000
85000×12=1020000
(Subtract partners income)for bill 1020000-30000=990000
Interest rate is 4% hence 990000÷0.04=24750000
Amount of cover is $24750000 for bill / 5
2. What level of TPD Insurance
do you recommend?
Total expenses – savings.
70000-15000=55000
Cover amount is $205000 / 5
3. What level of Crisis/Trauma
Insurance do you
recommend?
Total expenses – income
22000-100000=120000
Cover amount is $120000 / 5
4. What level of Income
Protection Insurance do you
recommend?
75% of monthly expenses
75%×70000÷12=4375
Cover amount is $4375 / 5
5. What level of Business
Insurance do you
recommend, considering
both Capital and Revenue
purposes?
Capital for the business is $1m
1000000×2%=200000
1000000-200000=800000
Cover amount is $800000
Revenue for business is profit less expenditure
2000000-1500000=500000
500000×78.85=394250
Cover amount is $394250 / 10
6. What level of General
Insurance do you
recommend?
Value of car =40000 RATE22%
40000×0.22=8800
Claim is $8800
Diamond ring claim is $1000
Piano claim is $2500 / 5
Sub-total / 35
Total / 100
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Insurance 17 of 29
Assessment Task 3 Name: ____________________
3.0 Present
appropriate
strategies
and solutions
to client and
negotiate a
financial plan,
policy or
transaction
FNSASICX503A.3
The next step in the financial services advice process is to arrange a time to
meet with the client to present appropriate strategies and solutions to client and
negotiate a financial plan, policy or transaction.
This will require that:
1. Product knowledge appropriate for the service or product offered is
demonstrated when presenting the product
2. The proposed transaction is explained and discussed with the client in a
clear and unambiguous way
3. Relevant details, terms and conditions of product/service are reinforced to
client
4. Impacts and possible risks of the solution are disclosed in a clear and
concise manner to the client
5. Client is provided with written supporting documentation (disclaimers;
disclosures; product application forms; written advice) and guided through
the key aspects of the documentation
6. Concerns or issues the client has regarding the proposed plan, policy or
transaction are discussed and clarified
7. Confirmation is sought from client that they understand the proposed plan,
policy or transaction.
You should consider the level of Life Insurance knowledge and sophistication of
the client when contemplating how to present and negotiate strategies and
solutions.
(58 Marks)
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Insurance 18 of 29
Assessment Task 3.1 Name: ____________________
3.1 Present
appropriate
strategies and
solutions to
client
FNSASICX503A.3.1,
3.2,.3.3,.3.4 and 3.5
After you have developed appropriate strategies and solutions, you will
arrange a time to meet with the client to:
 Present appropriate service or product,
 Explain the proposed transaction,
 Reinforce relevant details, terms and conditions,
 Disclose impacts and possible risks of the solutions, and
 Provide written supporting documentation.
Consider the level of Life Insurance knowledge and sophistication of the client
when contemplating how to present strategies and solutions.
(a) Prior to presenting the strategies and solutions to the client, describe what
preparation you might do and what documentation you might need.
FNSASICX503A.3.1
No Questions Answers Mark
1. Describe what
preparations you
would undertake
Verifying the ownership of the clients’ accounts.
Reviewing the beneficiaries and their current information.
Prepare your attire so as to look presentable so as to win over
clients trust.
/ 2
2. Describe what
documentation you
will need for this
meeting
Disclaimers.
Product application form.
/ 2
Sub-total / 4
Continued
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Insurance 19 of 29
Assessment Task 3.1, continued Name: ____________________
(b) Explain how you would present your insurance strategies to the client.
In 300-500 words and using the headings below, write a script that you might follow to
present your strategies in a clear and unambiguous way
FNSASICX503A.3.1 and 3.2
No Executive Summary Mark
Introduction
Identify potential clients. Establish contract with potential client and dress appropriately
for the meeting. Try and establish a common ground. Explain to the client what is
insurance is general. Tell them about yourself and the company you work for. Get to
know the client better via various methods such as interviews and questionnaires. Ask
then why they want to take an insurance cover and what informed the decision. Talk
them through the various policies and what they entail.
Scope of advice
Identify the subject matter of advice which your client seeks. State clearly what is the
intent of the advice you are about to give to your client. Explain the Statement of
Advice to the client in simple and clear terms. Explain to the client what financial
product that you will give in your advice and the things that are not included in the
scope of advice. After understanding the client, you may be able to advice on the most
appropriate policies and the one that is most affordable to them. Tell them the amount
of premiums expected to be paid on each of the policies available. Also tell
Objective
Be in a position to assess the clients’ complete financial status, that is, their assets,
liabilities, goals or objectives and tax status. Understand the financial aims of the client
and thus develop strategies to enable client meet them.
Recommendations
Help client make decisions on which venture to invest in and the ones to avoid. Advice
clients on how they can cut on their expenses and business investments to shun or
expand in.
Conclusion
Act as a link between the insurance company and the client and submit all the
completed documents to the company and verify that all requirements are met. Both
the financial adviser and the client should have mutual satisfaction on the agreement
reached.
/ 20
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Insurance 20 of 29
Sub-total / 20
Continued
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Insurance 21 of 29
Assessment Task 3.1, continued Name: ____________________
(c) During the presentation of your recommendations to the client, how would you
describe the proposed Life Insurance products?
FNSASICX503A.3.3 and 3.4
No Advice Characteristics
(lump sum/periodic payments
and condition or event of
payment)
Advantages
(amount of cover, likely impact)
Disadvantages
(possible risks/exclusions)
Mark
1. Term Life Lump sum payment The benefits are tax
exempt.
The policy expires once
you stop paying the
premiums. / 3
2. TPD Periodic payments. The product is pretty
flexible.
Products are too
expensive. / 3
3. Crisis/
Trauma
Lump sum payment Can cover upto 60
percent critical illness.
Not available through
super fund. / 3
4. Income
Protection
Periodic payment. The insurer cannot
terminate contract so long
as client is paying
premiums.
The risk may never occur.
/3
5. Business -
Capital
Lump sum payment It covers property in the
event of loss arising from
fire, theft or storm.
Does not cover loss due
acts of nature like flooding
an earthquakes. / 3
6. Business –
Revenue
Lump sum payment One has the ability to
influence some factors
that control cost of
premiums. For example
looking into the
background of employees.
There is no standard
policy wording for it.
/ 3
7. General
Insurance
Lump sum payment Basic insurance is cheap. Does not compensate for
other damages other than
accident. For example it
will not compensate for
damages caused by
floods. / 3
(d) When you provide the client with supporting documentation, what are the key points
you will highlight as you guide the client through key aspects of the documentation?
FNSASICX503A.3.5
No Supporting
Documentation
Key aspects
(that you will highlight to the client) Mark
1. Disclaimers Ensure client understands that benefits are only payable only if
the terms and conditions are met.
/ 1
2. Disclosure The client is obligated to disclose any necessary information as
deemed necessary for one to obtain a policy. / 1
3. Product Application
Form
Ask the client to read through the requirements of application
carefully so as to understand before filling. / 1
4. Written Advice Highlight the recommendation of certain products and why you
are recommending them. / 1
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Insurance 22 of 29
Sub-total / 25
Continued
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Insurance 23 of 29
Assessment Task 3.2 Name: ____________________
3.2 Negotiate a
financial plan,
policy or
transaction
FNSASICX503A.3.6,
and.3.7
After you have presented the appropriate strategies and solutions, you will
most likely need to:
 Discuss and clarify any concerns or issues, and
 Seek confirmation from the client that they understand.
Consideration the level of Life Insurance knowledge and sophistication of the
client when contemplating how to negotiate a plan policy or transaction.
(a) Explain how would you discuss and clarify the concerns listed below in order to gain
agreement.
FNSASICX503A.3.6
No Concerns Explanation Mark
1. This is too
expensive!
It is not expensive since the policy is meant to indemnify the
client. And in case of life insurance the benefits are made as
agreed even if the premiums did not amount to the benefits. / 2
2. Your commission is
too high!
It is not high since the financial advisor has given you the
appropriate advice to make the best decision and also compared
to competitors the fee is relatively fair. / 2
3. I don’t need all these
insurances!
Following my advice and that of other professional you can make
the most appropriate choice or choices and the most affordable
one. / 2
(b) How would you seek confirmation from the client that they understand the proposed
plan, policy or transaction?
FNSASICX503A.3.7
Type your answer below Mark
By asking them which products suits them most and why. If they have made an
informed decision based on your explanation then they quite clearly have understood
the policy. / 3
Sub-total / 9
Total / 58
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Insurance 24 of 29
Assessment Task 4 Name: ____________________
4.0 Agree the
plan, policy
or transaction
and complete
documentation
FNSASICX503A.4
The next step in the financial services advice process is to agree the plan,
policy or transaction and complete documentation.
This will require that:
1. The clients' formal agreement to the proposed plan is gained
2. Associated fee and cost structures are clearly explained and confirmation
of understanding gained from the client
3. Proposal and all other statutory and transactional documents are
completed and signed off by the client
4. Copies of appropriate documentation and the signed agreement are
exchanged.
(32 Marks)
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Insurance 25 of 29
Assessment Task 4.1 Name: ____________________
(a) The clients have agreed to your recommendations. Provide responses to the following
questions and list the statutory and transactional documents that need to be signed by
the client (where required).
FNSASICX503A.4
No Questions/Explanations/Documentation Mark
1. What would you ask
Bill and Mary to gain
their formal agreement
to the proposed plan?
FNSASICX503A.4.1
Have you understood the terms and agreements of policy?
Are you willing to take out the policy of choice?
Do you know how much the policy will cost you?
/ 3
2. What document is
signed to confirm that
the associated fees
and cost structures are
clearly explained and
confirmation of
understanding gained
from the client?
FNSASICX503A.4.2
Product application form.
Disclaimer.
Written advice.
/ 3
3. What statutory and
transactional
documents are
completed and signed
off by the client?
FNSASICX503A.4.3
Disclaimer.
Product application form.
Engagement and Disclosure document.
/ 3
4. Which documents are
exchanged with clients
after implementation
has been agreed
upon?
FNSASICX503A.4.4
Copy of signed and completed application form.
Copy of VAT certificate indicating the registration number of
financial advisor.
A proof of indemnity cover from insurer which specifies type and
period of cover.
/ 3
Sub-total /12
Continued
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Insurance 26 of 29
Assessment Task 4.1 Name: ____________________
(b)Complete an Implementation Plan that details your planned actions once Bill and Mary
have decided to proceed, providing an indication of when they must be completed by.
FNSASICX503A.4.4 A Adviser C Client
No. Implementation Plan Who When Mark
1 Filling the insurance application form. A / 1
2 Confirm the applicants detail, for example their postal and
physical address.
A
/ 1
3 Assess the net value of the clients. A / 1
4 The amount of premiums to be paid and at what frequency. A / 1
5 Mode of payment by the client C / 1
6 Bank details of the client and the type of account. A / 1
7 Any liabilities owed by the client. C / 1
8 Identify the next of kin. C / 1
9 Assess the state of health of the client. A / 1
10 Identify supplementary cover desired. A / 1
(c) Save the life insurance brochure and application from and complete it for Bill and Mary
for life cover only. You may make assumptions as required in order to complete all fields
on the application form. If your recommended amount of life cover for Bill and Mary
does not align with the amounts given on the form, insert under “Other Amount”.
Disregard the “(up to $1 million)” statement.
Scan and upload (or email) your completed form with your Assessment Task. /10
Sub-total / 20
Total /32
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Insurance 27 of 29
Assessment Task 5 Name: ____________________
5.0 Provide
ongoing
service
where
requested by
client
transaction
FNSASICX503A.5
The final step in the financial services advice process is to provide ongoing
service where requested by client transaction.
This will require that:
1. Type and form of ongoing service including reporting on performance and
review of plan, policy or transaction is agreed with the client.
2. Fees and costs for ongoing and specifically defined service are clearly
explained and confirmation of understanding gained from the client, and
3. Ongoing service is provided as required.
(24 Marks)
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Insurance 28 of 29
Assessment Task 5.1 Name: ____________________
(a) Please describe the ongoing service options available to Bill and Mary and the
associated fees.
FNSASICX503A.5.1 and 5.2 (a)
No Options Description/Fees Fees
Mark
1. The “No service”
option
This is where client was unable to access services of a
financial advisor.
$200
/ 2
2. The “Insurance
Review” option
Reassessing the details provided to the insurer and check if
any facts have changed.
$500
/ 2
3. The “Financial
Plan Review”
option
It is a check on your investment to assess if they are doing
well or if they are going downwards.
$500
/ 2
FSASICX503A.5.3
(b) Which option you would recommend and why? /3
insurance review option because some assets appreciate while others depreciate
hence their value changes.
Sub-total / 9
Continued
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Insurance 29 of 29
Assessment Task 5.1 Name: ____________________
(c) (i) Of the on-going service you have nominated, explain the value to the client of these
services. /5
The client will be able know which assets are over insured or under insured as a result of
change in value due to appreciation or depreciation.
FNSASICX503A.5.2(b)
(ii) How would you confirm Bill and Mary’s understanding of the fees and costs associated with
the on-going service you have recommended?
By asking them if they agree to the fees and by making them sign an agreement by them to pay the
fees required.
FNSASICX503A.5.3
(iii) How do you ensure the proposed ongoing service is provided as requested? /5
By having the client write a report with regards to the service they are receiving.
Sub-total / 15
Total / 24
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