FNSASICX503 Diploma Financial Planning: Insurance Product Research

This assignment solution focuses on analyzing Comminsure insurance products within the context of financial planning, specifically addressing key aspects of insurance as part of the Diploma of Financial Planning Module 4. It delves into the definition and implications of 'policy owner', explores policy ownership options both inside and outside of superannuation funds (including SMSFs), and identifies the 'life insured' under various ownership structures. The assignment clarifies the differences between 'guaranteed renewable' and 'guaranteed insurability' features, providing practical examples related to increasing life insurance benefits without additional underwriting. Furthermore, it examines the minimum and maximum waiting periods available under Comminsure's Income Protection policy, the conditions attached to the minimum waiting period, and the requirements for justifying income under the 'Guaranteed agreed value policy'. This thorough analysis supports students in understanding the nuances of insurance products and their application in financial planning scenarios. Desklib provides this solved assignment and many more past papers for students.

DFP Module 4 Workplace Simulation 1505
Diploma of Financial Planning
Module 4 Workplace Simulation
Submission Instructions:
Key steps that must be followed:
 Please complete the Declaration of Authenticity at the bottom of this page.
 Once you have completed all parts of the assessment and saved it (eg. to your
desktop computer), login to the Monarch Learning Management System (LMS)
to submit your assessment.
 In the LMS, click on the file ”Submit DFP Module 4 workplace simulation” in
the Module 4 section of your course and upload your assessment file/s by
following the prompts.
 Please be sure to click “Continue” after clicking “submit”.This ensures your
assessor receives notification – very important!
Declaration of Understanding and Authenticity *
I have read and understood the assessment instructions provided to me in the Learning Management System.
I certify that the attached material is my original work. No other person’s work hasbeen used without due
acknowledgement. I understandthat the work submitted may be reproduced and/or communicated for the
purposeof detecting plagiarism.
Student Name*: Date:
* I understand that by typing my name or inserting a digital signature into this box that I agree and am bound by
the above student declaration.

DFP Module 4 Workplace Simulation 1505
Units: FNSASICX503, FNSASICZ503, FNSASICM503, FNSFPL504
Important assessment information
Aims of this assessment
This simulated workplace assessment activity is conducted to the standard expected in the
workplace in order to demonstrate consistent performance of typical activities experienced
in the financial services industry.
This assessment covers the fundamentals of insurance. The focus of this assessment is to
analyse a Product Disclosure Statement (PDS) from an insurance provider – Comminsure
owned by Commonwealth Bank. The different policy ownership options are explored, as are
the options around holding insurance cover inside versus outside of superannuation
(including within an SMSF). Important insurance features such as guaranteed renewability,
guaranteed insurability and guaranteed agreed value are explored in the context of the
Comminsure policy. Income protection is covered with a focus on options regarding waiting
periods and benefit periods. Occupation classes and how they impact underwriting and
premium are addressed. The Partial disability benefit within an income protection policy is
explored. The important rights and responsibility of both consumer and insurance is covered
in the context of “Non-disclosure”. The Comminsure policy is researched to understand the
legal implications of “knowing” non-disclosure versus “unknowing” non-disclosure. Critical
Illness (trauma) policy features are explored in the Comminsure policy. Aspects such as
qualifying periods for certain conditions and specific definitions for cancer are addressed
with a spotlight placed on skin cancer in terms of meeting definition requirements to receive
a critical illness payout.
Marking and feedback
This assignment contains 3 assessment activities each containing specific instructions.
This particular assessment forms part of your overall assessment for the following units of
competency:
 FNSASICX503
 FNSASICZ503
 FNSASICM503
 FNSFPL504
Grading for this assessment will be deemed “competent” or “not-yet-competent” in line with
specified educational standards under the Australian Qualifications Framework.
What does “competent” mean?
These answers contain relevant and accurate information in response to the question/s with
limited serious errors in fact or application. If incorrect information is contained in an answer,

DFP Module 4 Workplace Simulation 1505
Units: FNSASICX503, FNSASICZ503, FNSASICM503, FNSFPL504
it must be fundamentally outweighed by the accurate information provided. This will be
assessed against a marking guide provided to assessors for their determination.
What does “not-yet-competent” mean?
This occurs when an assessment does not meet the marking guide standards provided to
assessors. These answers either do not address the question specifically, or are wrong from a
legislative perspective, or are incorrectly applied. Answers that omit to provide a response to
any significant issue (where multiple issues must be addressed in a question) may also be
deemed not-yet-competent. Answers that have faulty reasoning, a poor standard of
expression or include plagiarism may also be deemed not-yet-competent. Please note,
additional information regarding Monarch’s plagiarism policy is contained in the Student
Information Guide which can be found here: http://www.monarch.edu.au/student-info/
What happens if you are deemed not-yet-competent?
In the event you do not achieve competency by your assessor on this assessment, you will be
given one more opportunity to re-submit the assessment after consultation with your
Trainer/ Assessor. You will know your assessment is deemed ‘not-yet-competent’ if your
grade book in the Monarch LMS says “NYC” after you have received an email from your
assessor advising your assessment has been graded.
Important: It is your responsibility to ensure your assessment resubmission addresses all
areas deemed unsatisfactory by your assessor. Please note, if you are still unsuccessful in
meeting competency after resubmitting your assessment, you will be required to repeat
those units.
In the event that you have concerns about the assessment decision then you can refer to our
Complaints & Appeals process also contained within the Student Information Guide.
Expectations from your assessor when answering different types of assessment questions
Knowledge based questions:
A knowledge based question requires you to clearly identify and cover the key subject matter
areas raised in the question in full as part of the response.
Skill based questions:
Where you are asked to write as though you are speaking to a client, your answers must
show your ability to:
 understand your client’s concerns/perspective/views
 show empathy
 display a professional response
 explain ideas clearly and simply so your client can understand the issues

DFP Module 4 Workplace Simulation 1505
Units: FNSASICX503, FNSASICZ503, FNSASICM503, FNSFPL504
Good luck
Finally, good luck with your learning and assessments and remember your trainers are here
to assist you 
Assessment Activity 1
Researching & Analysing Insurance Products – part A
Activity instructions to candidates
 This is an open book assessment activity.
 You are required to read this assessment and answer all 4 questions that follow.
 Please type your answers in the spaces provided.
 Please ensure you have read “Important assessment information” at the front of this assessment
 Estimated time for completion of this assessment activity: 2 hours

DFP Module 4 Workplace Simulation 1505
Units: FNSASICX503, FNSASICZ503, FNSASICM503, FNSFPL504
Assessment 1
As a financial adviser, you will often be authorised to recommend different insurance product providers as
part of your AFSL’s approved product list (APL).
Researching and analysing the different features and benefits among insurance products is an important
part of the financial adviser’s role, in addition to comparing pure price differences alone.
Referring to Appendix 1 in your module 4 course materials, you are required to research and analyse the
Comminsure insurance product range contained with the Comminsure Protection PDS.
1) Referring to page 9 of the Comminsure PDS, answer the following questions:
a. Define what “policy owner” means?
The policy owner is looked upon as an individual who can make alterations or can be given a benefit
for the policy purchased by the individual.
b. If a life insured dies, is the life insured or policy owner (assuming they are different) entitled to
the insurance benefit (i.e. payout)?
The policy owner, who in case is different, would be the beneficial policy owner.
2) Referring to page 5 of the Comminsure PDS, who will be the policy owner of insurance;
a. If it is owned outside of superannuation?
If it is owned by a company or an individual that is not the trustee of any superannuation fund
b. If it is owned inside a Self-Managed Superannuation Fund (SMSF)?
Owned by the SMSF trustee
c. If it is owned inside superannuation?
Owned by the trustee of the superannuation fund, Colonial Mutual Superannuation Pty Ltd and the
Colonial Super Retirement Fund (CSRF)

DFP Module 4 Workplace Simulation 1505
Units: FNSASICX503, FNSASICZ503, FNSASICM503, FNSFPL504
3) Referring to page 5 of the Comminsure PDS, who will the life insured be;
a. If the insurance is owned outside of superannuation?
A person who is the policy owner or any other person.
b. If the insurance is owned inside a Self Managed Superannuation Fund (SMSF)?
A member from the SMSF
c. If the insurance is owned inside superannuation?
A member from the Colonial Super Retirement Fund (CSRF)
4) Refer to the definition of “guaranteed renewable” on page 17 of the Comminsure PDS. Now refer to
the definition of “guaranteed insurability option” on page 24 of the Comminsure PDS.
Required:
a. Is the concept of “guaranteed renewable” and the “guaranteed insurability option” the same
concept? If not, why not.
Guarantee renewable explains that the insurer will not cancel the policy, raise the rate of the
premium or place any additional; restrictions on the cover because of the number of claims
one makes under the policy or any alterations in the health condition, pastimes and
occupations. On the other hand, guaranteed insurability rider is known to be a life insurance
which permits the life insurance policy owner to purchase additional life insurance with no
underwriting. Rider is known to be the additional benefit to a life insurance that is beyond
the death benefit.
b. List three events that would allow a life insured to increase their life insurance benefit without
underwriting under the “guaranteed insurability option” on page 24 of the Comminsure PDS.
The adoption and the birth of a child
A child starting their secondary school

DFP Module 4 Workplace Simulation 1505
Units: FNSASICX503, FNSASICZ503, FNSASICM503, FNSFPL504
Mortgaging a home or raising the mortgage of the home.
c. Assume your client John McNamara has two children called Alice and Miles. John has a Life Care
insurance policy with Comminsure for the following amount - Term Life insurance of $1,000,000.
Alice, John’s daughter is about to start secondary school. Under the Guaranteed Insurability
option on page 24 of the Comminsure PDS, explain why the maximum John is allowed to increase
his Term Life cover by (without additional underwriting) is NOT $250,000?
John can even increase the coverage amount by 25% of the current cover or up to the lesser
of the 200000 per event. Hence, in this scenario, 200000 is known to be the cap with the
help of which John can increase his life care.

DFP Module 4 Workplace Simulation 1505
Units: FNSASICX503, FNSASICZ503, FNSASICM503, FNSFPL504
Assessment Activity 2
Researching & Analysing Insurance Products – part B
Activity instructions to candidates
 This is an open book assessment activity.
 You are required to read this assessment and answer all 4 questions that follow.
 Please type your answers in the spaces provided.
 Please ensure you have read “Important assessment information” at the front of this assessment
 Estimated time for completion of this assessment activity: 2 hours

DFP Module 4 Workplace Simulation 1505
Units: FNSASICX503, FNSASICZ503, FNSASICM503, FNSFPL504
Assessment 2
As a financial adviser, you will often be authorised to recommend different insurance product providers as
part of your AFSL’s approved product list (APL).
Researching and analysing the different features and benefits among insurance products is an important
part of the financial adviser’s role, in addition to comparing pure price differences alone.
Referring to Appendix 1 in your module 4 course materials, you are required to research and analyse the
Comminsure insurance product range contained with the Comminsure Protection PDS.
1) Refer to page 13 of the Comminsure PDS.
a. What is the minimum and maximum waiting period available under the Income Protection policy
options?
Minimum waiting period available: 14 days
Maximum waiting period available: 2 years
b. Is the minimum waiting period provided on any conditional basis, and if so what is that?
The minimum 14 day waiting period is not available of the insured performs task in a heavy risk or a
specialised risk occupation.
2) Refer to page 14-15 of the Comminsure PDS
a. Under the Income Protection “Guaranteed agreed value policy” definition, do you need to justify
your income when you make a claim, yes or no?
If you provide the demanded evidence of their income or one is qualified as a medical graduate and
then one can apply for a guaranteed agreed value policy. With this kind of policy we have to pay the
monthly benefit selected and does not ask to provide justification for the amount that is to be
claimed.
b. What is the maximum monthlyIncome Protection benefit payable under “Most Occupations”?
30000

DFP Module 4 Workplace Simulation 1505
Units: FNSASICX503, FNSASICZ503, FNSASICM503, FNSFPL504
3) Refer to page 48 of the Comminsure PDS
a. Under the “Partial Disability” benefit option, do you get paid an Income Protection benefit if you
can only work partially due to illness or accident?
If the life insured is disabled partially, payment has to be paid for partial disability benefit.
b. Outline the formula used to determine the partial disability benefit
(A-B)x C
A= is the pre-disability income of the life insured
B-= monthly income of the life insured for the month for which claim has been made for partial
disability
C= is the monthly benefit
4) Under the Non-disclosure section of all Insurance contracts, it states words to the effect that;
“under the Insurance Contracts Act 1984, you have an obligation to disclose to the insurer every matter
that you know, or could reasonably be expected to know, or is relevant to the insurer’s decision whether to
accept the risk of the insurance and, if so, on what terms. This duty to disclose also applies to a request to
extend, vary or reinstate your insurance”.
a. Refer to page 16 of the Comminsure PDS. List 4 instances in bullet point form where disclosure is
notrequired?
 Which reduces the risk that will be undertaken by the insurer
 Something that is of common knowledge
 One that is known by the insurer or in the general course of the business will be known
 As to which compliance with your duty has been waived by the insurer
b. Refer to page 16 of the Comminsure PDS. For insurance cover issued on or after 29th June 2014,
explain the different consequences of the potential to be paid a benefit by an insurance company
under the following two scenarios:

DFP Module 4 Workplace Simulation 1505
Units: FNSASICX503, FNSASICZ503, FNSASICM503, FNSFPL504
i. Non-disclosure by an insurance applicant that involved unknowing innocent
misrepresentation or omission, whereby, had the insurer known at the time of
underwriting of the correct information, the insurer wouldn’t have issued the
cover
If one fails to comply with the disclosure duty and the insurer would not have issued the cover if the
failure had not taken place, the insurer may avoid the cover within three years after issuing it.
ii. Non-disclosure by an insurance applicant involving knowingly providing
fraudulent information or fraudulent non-disclosure
If the non-disclosure is fraudulent, the insurer may avoid the cover at any time period.
c. Molly was diagnosed with malignant breast cancer 18 months ago, to which she received
chemotherapy. She is now in remission. Molly decides she should take out Term Life insurance
todayas she has a young family and understands the gravity of her mortality after her cancer
scare. Molly does not include this vital information about her cancer diagnosis on her insurance
application for $600,000 of Term Life Insurance. The insurance questionnaire specifically asks if
Molly has ever been diagnosed with cancer, to which Molly answers “NO”. She is approved for
the insurance at standard rates, based on her application information. In a devastating chain of
events 6 months from today, Molly receives the news her breast cancer has aggressively returned
and metastasised into her liver and brain. She dies 5 months later (11 months from today).
Required:
If Molly had hypothetically chosen Comminsure’s Term Life insurance policy, would the
insurer payout a benefit on Molly’s life insurance policy? If so why and if not, why not?
As Molly failed to comply with her responsibilities related to the disclosure and the insurer would not
have issues the cover if the failure had not taken place, the insurer may avoid the coverage within
three years of the issue. an insurer who has the power to avoid cover may chose not to avoid it but
imply in reducing the sum that has been insured for in relation to the formula that looks into the
premium that would be payable if Molly had disclosed all the valid information to the insurer or
change the cover in such a manner as to place the insurer in the position it would have been had the
failure to comply with the disclosure duty had not taken place. As Molly was covered death, the

DFP Module 4 Workplace Simulation 1505
Units: FNSASICX503, FNSASICZ503, FNSASICM503, FNSFPL504
insurer may not apply to the reduced sum option and must do within three years of the issuance of
the cover.