Life Assurances Chapter 1 - 3

What are the 5 Personal financial Needs?

• Protection Needs (Death & Illness)

• Savings

• Borrowing

• Investments

• Retirement

What are the two types of income?

Earned income & Unearned Income

Definition Life Assurance Cover

Life Assurance cover, pays out a lump sum on the death of an individual insured by the policy, in return for a regular premium

Definition Serious illness Cover

Serious Illness Cover, pays out a lump or regular sum, if the insured is diagnosed with or developing one or more serious illnesses covered by the policy in return for a regular premium.

Definition Income Protection (IP)

In return for a regular premium, the policy pays of up to 75% of the individuals income annual, as long as they are out of work due to sickness or disability lasting longer than a pre-defined period of time ie - 13 or 26 weeks.

Financial Instruments Provided

• Life assurance

• Serious Illness cover

• Income Protection

• Saving’s Plan

• Pension Plan

• Investment Bonds (Lump sum premium)

Benefits of Financial Planning

• Helps consumers identify & prioritise their financial needs

• Helps the consumer take an holistic view of their financial circumstances

• Helps the consumer make the best use of their financial resources

• Helps the consumer achieve certain financial needs and objectives

• Through regular review changing financial needs are identified

The financial planning process:

• Know the client

• Identify & prioritise their financial needs

• Devise a strategy

• Make suitable recommendations

• Regular Review

What are the main types of Life Assurance Cover?

• Term Assurance

• Whole of Life

Types of Term Assurance

• Pension Term Assurance/ Section 785

• Convertible Term Assurance (CTA)

• Mortgage Protection

• Regular Income benefit (income on death)

• Level Term Assurance

Sum Assured

The amount payable upon death of the life insured

Policy Term

The duration of which the policy is in effect

Considerations for calculating policy premium

• Age of life assured

• Smoker/Non-smoker status

• Health status of life assured

• Occupation of life assured

• Policy Term

• Amount of cover required

• Ancillary benefits - Indexation, CTA, ect