Assessment: Providing Life Insurance Advice - FNSASICX503A Task

This document presents a completed assignment on providing life insurance advice, addressing the requirements of the FNSASICX503A unit. The assignment covers establishing relationships with clients, identifying their objectives, needs, and financial situations through fact-finding interviews. It explores strategies for building rapport, gathering information, and explaining financial service guides and fee structures. The document also analyzes client objectives, financial details, and risk profiles, along with the importance of documentation and ongoing service. The assignment includes detailed answers to questions on personal insurance strategies, product benefits, and complaint procedures, providing a comprehensive overview of the life insurance advice process. The assignment also includes a detailed fact-finding section, addressing the client's personal and financial details, objectives, and goals.

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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