2.1 Name any FOUR examples of long-term insurance - NSC Business Studies - Question 2 - 2022 - Paper 2

The term 'excess' refers to the amount an insured person must pay upfront when making a claim on an insurance policy. It serves multiple purposes:

1. Deductible Amount: A portion of the claim is to be paid by the insured to discourage minor claims and ensure that only significant claims are submitted.
2. Insurance Premiums: Excess helps lower the insurance premium, as higher excess amounts tend to lower the cost of the policy.
3. Fraud Prevention: It protects insurers from fraudulent claims by discouraging false claims, as the insured incurs a direct cost.

2.3.1 Dumisani used slides that were projected on a screen.
2.3.2 He provided the audience with hard copies of his presentation.

Limited liability means that a shareholder’s or partner’s financial responsibility is limited to the amount they invested in the company. In contrast, unlimited liability implies that an individual is fully responsible for the debts of their business, putting personal assets at risk to settle debts.

The Johannesburg Securities Exchange (JSE) functions as follows:

• It provides a platform for companies to raise capital by selling shares.
• It acts as a barometer of economic health by reflecting market conditions in South Africa.
• It offers investors a place to buy and sell shares, enabling liquidity.
• The JSE regulates trading to ensure fair and orderly exchanges.

To calculate simple interest, use the formula:

$I = P imes r imes t$
where:

• $I$ is the interest
• $P$ is the principal amount (R7,000)
• $r$ is the rate of interest (10%)
• $t$ is the time in years (2 years)

Calculating:
$I = R7,000 imes 10\% \times 2 = R7,000 \times 0.10 \times 2 = R1,400$
Thus, the simple interest Thapelo will receive is R1,400.

Fixed deposits present several advantages and disadvantages:

Advantages:

• Fixed interest rates provide certainty in returns.
• Insured funds guarantee safety against market fluctuations.
• Restriction on withdrawals fosters financial discipline for investors.

Disadvantages:

• Limited liquidity until the maturity date.
• Potential loss of purchasing power due to inflation over the investment period.

Insurance provides several advantages for businesses:

1. Risk Management: Protects against unforeseen calamities, ensuring business continuity.
2. Financial Security: Provides financial compensation for losses incurred.
3. Peace of Mind: Business owners can focus on operations knowing they are protected against risks.

To handle feedback professionally, a presenter should:

• Be polite and courteous while acknowledging feedback.
• Keep responses focused and to the point, avoiding defensiveness.
• Encourage further questions for clarity and engagement.
• Demonstrate openness to constructive criticism and willingness to improve.