Insurance and Risk Protection Assignment

Written Assignment
Insurance and Risk Protection
(DFP2_AS_v5)
Student identification(
student to complete)
Please complete the fields shaded grey.
Student number 10672586
Written assignment result (
assessor to complete)
Result — first submission (details for each activity are shown in the table below)
Not yet Demonstrated
Parts that must be resubmitted:
3 & 5
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)
You have made a good attempt with your assignment, however there are areas that need revisiting, see
comments within assignment.
DFP2_AS_v5

Before you begin
Read everything in this document before you start your written assignment
for
Insurance and Risk Protection (DFP2_AS_v5).
About this document
This document is the written assignment — half of the overall
Written and Oral
Assignment.
This document includes the followingparts:
• 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 (DFP2v5)subject room.
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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 factfinder 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.
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_v5_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.
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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 (pdf) in
the Assessment section of KapLearn for details on how to submit your written
assignment.
Your
written assignment and oral assignment must be submitted together
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 demonstrated’ 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 (DFP2v5) subject room in KapLearn under the
‘Assessment’ tab.
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
completedwritten and oral assignment.
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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 demonstrated or not yet demonstrated.
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 to be demonstrated in all assessment items in order to
be awarded the units of competency in this subject, including:
• all of the exam questions
• the written and oral assignment.
‘Not yet demonstrated’ and resubmissions
Should sections of your assignment be marked as ‘Not yet demonstrated’ 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
demonstrated’.
Make changes to, but do not delete any part ofyour 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.
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 ElsbethSmyth 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 youif you can help them with their
insurance needs.
Over the phone you explain to John and Elsbeththe financial planning process and why
you will need to ask the couple for certain types of financial information. You stress
that any information they giveyou 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 factfinder 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 formas 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 30Crune St
Caringbah NSW 2229
30Crune 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 Elsbetharriveat 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 theirinsurance 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,reducingthe 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
contributionsfrom 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 childcare centre, as well as Elsbeth’s mother, to look after Harry
when Elsbeth is at work. The childcare 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 arecent model
Ford Focus, currently valued at $11,000, andJohn 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.
Elsbethhas $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 age65 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 $126,000for 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).
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