SUSS COR167e: Managing Personal Finances - Tutor-Marked Assignment 02

This document presents a comprehensive solution to a Tutor-Marked Assignment (TMA02) for the COR167e Managing Your Personal Finances course at the Singapore University of Social Sciences (SUSS). The assignment focuses on three key areas of personal finance: wealth guarding, wealth growing, and wealth giving. The solution addresses various aspects of wealth guarding, including insurance planning and tax considerations. It then delves into wealth-growing strategies, specifically retirement planning and investment accumulation. Finally, the assignment explores wealth-giving through estate planning, covering topics such as wills, trusts, and intestate succession. The solution provides detailed answers to the assignment questions, supported by relevant concepts and examples. The assignment also includes references and bibliography.

Running head: MANAGING PERSONAL FINANCE
Managing Personal Finance
Name of the Student:
Name of the University:
Author’s Note:

1MANAGING PERSONAL FINANCE
Table of Contents
Answer to question 1:.................................................................................................................2
Part a:.....................................................................................................................................2
Part b:.....................................................................................................................................2
Part c:.....................................................................................................................................2
Answer to question 2:.................................................................................................................3
Part a:.....................................................................................................................................3
Part b:.....................................................................................................................................3
Part c:.....................................................................................................................................3
Answer to question 3:.................................................................................................................4
Part a:.....................................................................................................................................4
Part b:.....................................................................................................................................4
Part c:.....................................................................................................................................5
References and bibliography:.....................................................................................................6

2MANAGING PERSONAL FINANCE
Answer to question 1:
Part a:
1. D. I, II, III and IV
2. D. Bathing, Eating, Dressing, Toileting, Mobility, Transferring
3. A. A temporary policy
4. A. I, II and III
5. A. The right to be compensated for a loss up to the full amount of the loss
6. D. I, II and IV
7. A. The contract accelerates savings growth due to its tax-deferred nature
8. C. An insurer’s acceptance of a person’s application of insurance
Part b:
1. Renewable term insurance is an insurance policy having clause to increase the
insurance coverage period. Convertible term insurance allows the individual to
convert the term insurance policy to a permanent policy.
2. The principle of indemnity, assures the insured to claim for damages up to the actual
damages caused and covered by the insurance agreement.
3. Four main methods of indemnity can be defined as, cash payment, repair, replacement
and reinstatement methods (Chen, 2016).
Part c:
1. House owners’ policy covers the damages caused to the house building by flood, fire,
and other perils whereas, the house holders’ policy covers the damages to the contents
and materials of a house building.
2. Compensation payable = 200,000*(1,200,000/2,000,000) = $120,000

3MANAGING PERSONAL FINANCE
Answer to question 2:
Part a:
1. Four types of risks that “Great Mind” might face are, Personal and family related
risks, Healthcare and housing, financial risks and public policy related risks.
2. If “Great Mind” is self employed, then he would be going for a lump sum investment
at a time as part of his retirement, and if he is an employee then he would be planning
for an annuity from his salary income. If he is an employee then he would be going
for a pension plan much before his retirement (Chen, 2016).
Part b:
1. If “Great Mind” plans for an early retirement, then the fund accumulation of the
investment accumulation might get shorter for generating a significant return over the
retired age.
2. In the event of death of “Great Mind” the partnership business can be reconstituted
and continued, it can be dissolved with the death of the “Great Mind” or it can be
continued with the substitute partner from the legal heirs of the “Great Mind”
Part c:
Current age = 38 Years
Retirement age = 65 Years
Years to retirement (n) = 65-38 = 27 Years
Current annual income (P) = $90,000
Wage growth rate (r) = 3%
First year of retirement income = P*(1+r)n = 90000*(1+3%)27 = $199,916

4MANAGING PERSONAL FINANCE
Answer to question 3:
Part a:
1. B. The executor of a will appoints another person to act as the executor of the will
after the former person dies.
2. B. When the insured divorces his or her spouse
3. C. III and IV
4. C. Paying for the maintenance of the deceased’s infant children from his own funds
5. B. Powers, donees, administration, bequest, devise, renunciation, tax planning.
6. B. it is a distribution in equal proportions to and amongst the children of the testator
and such persons as legally represent the children in case any of the children be then
dead.
7. A. Wills must have a specific form and must be printed before they are considered
valid.
8. C. A mother transfers property to her son for fear that by retaining the property in her
name, she would be in breach of HDB’s rules on eligibility and thus have the flat
forfeited by the HDB
Part b:
(i) Three ways in which a marriage may be deemed to have irretrievably broken
down are listed below
 Exceptional hardship
 Exceptionally unreasonable and cruel
 Unreasonable behaviour
(ii) Marvellous Mind is the settler in the given case study; she is also the trustee in
this case. Three children of the Great Mind namely Fantastic Mind, Fabulous
Mind, and Friendly Mind are the beneficiaries in this case.

5MANAGING PERSONAL FINANCE
Part c:
(i) Under intestate Succession Act., three of his children are entitled to his estate.
(ii) Ways for revocation of a will can be listed down as follows.
 Formal declaration
 Making a new will
 Destruction of a will
 By marriage

6MANAGING PERSONAL FINANCE
References and bibliography:
Chen, C. C. (2016). Hedging the aging society: Challenges to the insurance market and law in
Singapore. Singapore Management University School of Law Research Paper, (15).
Jain, S. (2017). Customer Insights for Insurance Companies. In Business Analytics: Progress
on Applications in Asia Pacific (pp. 366-400).
Koh, S. H., & Lee, R. (2017). GST and Insurance: Singapore. In VAT and Financial
Services (pp. 365-372). Springer, Singapore.
Wu, T. H. (2017). From Waqf, Ancestor Worship to the Rise of the Global Trust: A History
of the Use of the Trust as a Vehicle for Wealth Transfer in Singapore. Iowa L.
Rev., 103, 2263.