Photo AI
This is an Insurance Question - Junior Cycle Business Studies - Question 4 - 2017
Question 4
This is an Insurance Question. Answer all parts of this question: Lisa Bergin, born on 21 July 1975, lives at Rosemary Street, Roscrea, Co. Tipperary. She is a sol... show full transcript
Worked Solution & Example Answer:This is an Insurance Question - Junior Cycle Business Studies - Question 4 - 2017
Step 1
Write the letter that David sent to Lisa on 15 May 2017 explaining the difference between Endowment Assurance and Whole Life Insurance.
Answer
High Street
Birr
Co. Offaly
Ms Lisa Bergin
Rosemary Street
Roscrea
Co. Tipperary
15 May 2017
Re: Endowment and Whole Life Assurance
Dear Lisa/Dear Ms Bergin,
I am writing following your request seeking information on the difference between Endowment and Whole of Life Assurance policies.
Endowment Assurance is where an agreed amount of money is paid when the insured reaches a certain age or on the death of the insured whichever occurs first. Whole Life Assurance is where an agreed amount of money is paid to the person’s dependants when the person dies.
If you need any further advice please do not hesitate to contact me.
Yours sincerely,
David Long
Step 2
Following David’s advice Lisa decides to purchase a Whole Life policy. Assume you are Lisa, using today’s date, complete the proposal form on page 11 of Section A.
Answer
As this is a hypothetical question based on a proposal form, the details required would typically include:
- Personal information (name, date of birth, address)
- Life cover amount (e.g., €250,000)
- Occupation (e.g., soldier)
- Payment method (e.g., direct debit)
- Health disclosures (e.g., non-smoker, no health issues)
Ensure to fill out all sections as required on the form.
Step 3
Step 4
Calculate the insurance premium that Lisa will have to pay.
Answer
To calculate the insurance premium:
-
House Insurance:
egin{align*} ext{Premium} &= rac{16}{15,000} imes 240,000 \ &= €256.00 \ ext{Contents Insurance}: \ egin{align*} ext{Premium} &= rac{28}{5,000} imes 70,000 \ &= €392.00 \ ext{Total Premium} &= €256.00 + €392.00 \ &= €648.00 \ ext{Less Discount}: \ ext{Discount on Contents} = 15\% ext{ of } €392.00 = €58.80 \ ext{Total After Discount} &= €648.00 - €58.80 \ &= €589.20 \ ext{Final Premium} &= €589.20 \ ext{Total Premium} &= €589.20 \ `` Thus, Lisa's total insurance premium will be €589.20.