Insurance and Risk Protection (DFP2_AS_v4) Student Number Written Assignment Insurance and Risk Protection

Written Assignment
Insurance and Risk Protection (DFP2_AS_v4)
Student identification (student to complete)
Please complete the fields shaded grey.
Student number
Written assignment result (assessor to complete)
Result — first submission (details for each activity are shown in the table below)
Parts that must be resubmitted:
Result — resubmission (if applicable)
Result summary (assessor to complete)
First submission Resubmission (if required)
Fact finder Section 2
Case study
assignment
questions
Section 3
Section 4
Section 5
Feedback (assessor to complete)
[insert assessor feedback]
DFP2_AS_v4

Before you begin
Read everything in this document before you start your written assignment for Insurance and Risk
Protection (DFP2_AS_v4).
About this document
This document is the written assignment — half of the overall Written and Oral Assignment.
This document includes the following parts:
• Instructions for completing and submitting this assignment
• Case study
• Insurance and Risk Protection assessment:
– Fact finder and risk profile template
– Case study questions
– Cash flow
– Assumptions.
How to use the study plan
We recommend that you use the study plan for this subject to help you manage your time to complete
the assignment within your enrolment period. Your study plan is in the KapLearn Insurance and Risk
Protection (DFP2_AS_v4) subject room.
Instructions for completing and submitting this written
assignment
Completing the written assignment
You are required to complete the following tasks in this assignment document:
• complete the fact finder template for your clients (the risk profile template is included in this document
for you to view, but you are not required to complete the risk profile template for this assignment)
• answer the assignment questions as they relate to sections 3, 4 and 5 of the case study.
The information and data you need to do this work is presented as a case study. Some data will have to be
externally sourced; the templates clearly indicate where this will be necessary.
Word count
The word count shown with each question is indicative only. You will not be penalised for exceeding the
suggested word count. Please do not include additional information which is outside the scope of the
question.
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Additional research
You will be required to source additional information from other organisations in the financial services
industry to find the right product/s to meet the Smyths’ requirements, and to calculate your service fees.
Saving your work
Download this document to your desktop, type your answers in the spaces provided and save your work
regularly.
• Use the template provided, as other formats will not be accepted for these assignments.
• Name your file as follows: Studentnumber_SubjectCode_Assignment_versionnumber_Submissionnumber
(e.g. 12345678_DFP2_AS_v4_Submission1).
• Include your student ID on the first page of the assignment.
Before you submit your work, please do a spell check and proofread your work to ensure that everything is
clear and unambiguous.
Submitting the written assignment
Only Microsoft Office compatible written assignments submitted in the template file will be accepted for
marking by Kaplan Professional Education. You need to save and submit this entire document.
Do not remove any sections of the document.
Do not save your completed assignment as a PDF.
The written assignment must be completed before submitting it to Kaplan Professional Education.
Incomplete written assignments will be returned to you unmarked.
The maximum file size is 20MB. Once you submit your written assignment for marking, you will be unable
to make any further changes to it.
You are able to submit your written assignment earlier than the deadline if you are confident you have
completed all parts and have prepared a quality submission.
Please refer to the Assignment submission/resubmission instructions in the Assessment section of
KapLearn for details on how to submit your written and Oral assignment.
Your Written Assignment and Oral Assignment must be submitted together, including; Written
assignment template (Word doc), Oral assignment template (Word doc) and Oral assignment audio
recording (M4A/MP3 file), on or before your due date. Please check KapLearn for the due date.
The written assignment marking process
You have 12 weeks from the date of your enrolment in this subject to submit your completed assignment.
Should your assignment be deemed ‘not yet competent’ you will be give an additional four (4) weeks to
resubmit your assignment.
Your assessor will mark your written and oral assignment and return it to you in the Insurance and Risk
Protection (DFP2_AS_v4) subject room in KapLearn under the ‘Assessment’ tab.
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Make a reasonable attempt
You must demonstrate that you have made a reasonable attempt to answer all of the questions in
your written assignment. Failure to do so will mean that your assignment will not be accepted for marking;
therefore, you will not receive the benefit of feedback on your submission.
If you do not meet these requirements, you will be notified. You will then have until your submission
deadline to submit your completed written and oral assignment.
How your written assignment is graded
Assignment tasks are used to determine your ‘competence’ in demonstrating the required knowledge and/
or skills for each subject. As a result, you will be graded as either competent or not yet competent.
Your assessor will follow the following process when marking your written assignment:
• Assess your responses to each question, and sub-parts if applicable, and then determine whether you
have demonstrated competence in each question.
• Determine if, on a holistic basis, your responses to the questions have demonstrated overall
competence.
You must be deemed competent in all assessment items in order to be awarded your qualification,
including demonstrating competency in:
• all of the exam questions
• the written and oral assignment.
‘Not yet competent’ and resubmissions
Should sections of your assignment be marked as ‘not yet competent’ you will be given an additional
opportunity to amend your responses so that you can demonstrate your competency to the required level.
You must address the assessor’s feedback in your amended responses. You only need to amend those
sections where the assessor has determined you are ‘not yet competent’.
Make changes to, but do not delete any part of your original submission. Use a different text colour for
your resubmission. Your assessor will be in a better position to gauge the quality and nature of your
changes. Ensure you leave your first assessor’s comments in your assignment, so your second assessor can
see the instructions that were originally provided for you. Do not change any comments made by a
Kaplan assessor.
Units of competency
This written assignment is your opportunity to demonstrate your competency against this unit:
FNSASICX503 Provide advice in life insurance
Note that the Written and Oral Assignment is one of two assessments required to meet the requirements
of the units of competency.
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We are here to help
If you have any questions about this written assignment, you can post them at the ‘Ask your Tutor’ forum in
your subject room. You can expect an answer within 24 hours of your posting from one of our technical
advisers or student support staff.
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The case study
Section 1 — Meeting your client
The first phone call
John and Elsbeth Smyth are a young married couple with one child. Recently Chris, a business associate
of Elsbeth, who also has a young family, was seriously injured in a vehicle accident that has resulted in
uncertainty about his ability to return to work. John and Elsbeth have also learned that, due to inadequate
insurance cover, the family of the injured work colleague is now under financial stress. They do have some
insurance cover themselves, but are now unsure if it is adequate or suitable for their needs. Recalling a
positive experience, she had with you a few years ago on another financial matter, John and Elsbeth call to
see if you if you can help them with their insurance needs.
Over the phone you explain to John and Elsbeth the financial planning process and why you will need to ask
the couple for certain types of financial information. You stress that any information they give you will be
treated confidentially and will only be used to help you recommend an appropriate course of action that
the Smyths should consider to ultimately meet their needs. You give them information concerning privacy,
and you and your firm’s capability, and mention that other disclosure issues are in the firm’s financial
services guide (FSG) that you will send to them.
You go on to explain that part of the information gathering will include the need to complete a financial
profile. This means that they will need to tell you what they own, what they owe, what they earn and their
living expenses. All this information will be recorded in a fact finder form which you will compile.
You arrange a date and time for them to come to your office. You ask them to bring along as much financial
information as they can to the meeting, including income details, expenses, insurance details,
superannuation and investments. You also ask them to think about what specific financial goals they want
to achieve and any issues they wish to discuss at the meeting.
When you have concluded the call, you make a file note about the conversation including the date,
the potential clients’ names, and any other items that were discussed. This is the start of your paper trail.
You also complete some of the initial details in the data collection form as shown in Table 1.
Finally, you write to Elsbeth and John, as promised during your initial conversation, and include the FSG and
a checklist of the information they need to bring to the meeting.
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Table 1 Personal details
Client Client 2
Title Mrs Mr
Surname Smyth (née Smeg) Smyth
Given and preferred names Elsbeth John
Home address 30 Crune St
Caringbah NSW 2229
30 Crune St
Caringbah NSW 2229
Business address n.a. n.a.
Contact phone [phone] (02) 9544 7766
Age 32 36
Sex Male Female Male Female
Smoker Yes No Yes No
Expected retirement age Probably around the same time as
John retires
Probably around age 65
The first meeting
John and Elsbeth arrive at your office for the meeting as arranged. After making them comfortable,
you go through the key elements of your FSG and explain your role and capacity to assist them with their
insurance needs.
Collecting the data
You gather the following information about John and Elsbeth through a process of thorough and polite
questioning. From time to time, one or the other provides you with a relevant document to confirm their
financial situation. You confirm the details in the fact finder as you proceed.
John and Elsbeth’s current situation
John, age 36, is married to Elsbeth, who is 32. Elsbeth follows netball and is a keen weekend player in a
local competition. Elsbeth and John have one child, a boy named Harry, who was born 12 months ago.
John and Elsbeth purchased their home about three years ago which is now worth around $975,000.
They have a mortgage of $540,000. The mortgage is a variable interest loan with an interest rate of 4.5%
p.a., which is linked to a bank offset account. (Note: An offset account is one that allows the credit balance
of the offset account to offset the interest owing on an outstanding loan or mortgage, reducing the interest
payable.) The mortgage has 22 years remaining and their minimum mortgage repayment is $2,700 per
month. Any excess income they have is paid into the offset account. The current amount available in their
offset account is $32,000.
John works full-time as a chemical engineer for an agricultural supplies company that sells agricultural
chemicals, seed and fertilisers and takes regular interstate business trips to rural and regional Australia.
He has worked full-time for his employer for 10 years and earns $165,000 p.a. with additional
superannuation guarantee (SG) contributions from his employer paid into the employer’s default fund.
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Elsbeth has recently returned to work on a part-time basis (3 days a week) following maternity leave.
She is a marketing manager for a local engineering company and has also been with the same firm for
10 years. She earns $63,000 p.a. with additional SG contributions from her employer paid into the
employer’s default fund. Elsbeth advises during the meeting that she feels she would like to change her
current employment, and is considering starting up her own consulting business from home. This would
enable her to spend more time with their son.
They currently use a child care centre, as well as Elsbeth’s mother, to look after Harry when Elsbeth is at
work. The child care fees are $88 per day (not including the Child Care Rebate), which Elsbeth utilises
two days per week for 48 weeks per year. These expenses are not included in their day-to-day living
expenses. Elsbeth’s mother minds Harry for one day a week at no cost. Once Harry starts school,
Elsbeth and John hope to send him to the local independent school at a total cost of $65,000 for his whole
school life.
Other than their cash in the bank, superannuation holdings and house contents, the only other assets
they have are their motor vehicles. Elsbeth drives a recent model Ford Focus, currently valued at $11,000,
and John drives a late model Holden HSV performance vehicle, currently valued at $33,000. Both cars are
fully paid off and are comprehensively insured. All motor vehicle expenses (except insurance) are included
in the clients’ living expenses.
Superannuation
John has $260,000 in his employer’s default superannuation fund, the ASSF Super Fund, and is invested in a
balanced portfolio. He joined the fund on 1 February 2004.
Elsbeth has $114,000 in her employer’s default superannuation fund, the CISF Super Fund and is invested in
a balanced portfolio. Elsbeth joined the fund on 19 January 2004.
Neither Elsbeth nor John makes any additional contributions to their superannuation funds.
Insurance
John’s default superannuation fund provides a death and total and permanent disability (TPD) benefit
which is currently equal to his annual income (excluding SG contributions). The premium for this cover is
$1.25 p.a. for each $1,000 of cover or part thereof, and is deducted from his superannuation contributions.
The ASSF Super Fund will allow a member to increase their benefit to twice the member’s annual salary at
this premium rate. The fund will allow a further increase in cover to a maximum of $750,000. However,
the premium will increase to $1.50 per $1,000 for any amount of cover that is over twice the member’s
annual salary. John’s superannuation fund can provide income protection cover with a 30 to 90-day waiting
period, and a two-year to age 65 benefit period. He has not taken out this cover.
Elsbeth’s default superannuation fund also provides a death and TPD benefit and she currently has cover of
$126,000 for each of life and TPD. The premium for this level of cover is $143 p.a. deducted from her
superannuation contributions. The CISF Super Fund allows for members to further increase their cover to a
maximum of $2 million and on the following premium scale:
• ≤$500,000 — $1.19 p.a. per $1,000 of cover
• $500,001 to $1 million — $1.45 p.a. per $1,000 of cover
• $1 million to $2 million — $1.65 p.a. per $1,000 of cover.
Elsbeth and John have no other personal insurance cover (except health insurance as per below).
They have full comprehensive insurance on their vehicles with a total annual premium of $2,800 p.a.
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