Discuss draft of a speech and to present your recommendation to the customer. The speech must satisfy the following requirements: the recommended option, and (2) the reason for your recommendation.
In this case study, you areasked to provide a financial advice to customers who should decide whether to purchaselife insurance policies within or outside the superannuation fund. Read the case carefullyand provide your advice by analysing the tax implication of each choice.
Jack, who is 36 years old, has beenemployed by XYZ Inc. for 12 yearsand subscribed his superannuation fund on his employment starting date at XY. Hehas a superannuation account balance $200,000with $30,000 of tax-free component. Jack’s current income is $190,000 and it is expected to be unchanged until his retirement. Jack would like his non-dependent childrento receive a lumpsum after-tax benefit $500,000 on his death. Because he has only $200,000 in hissuperannuationaccount, he should buy additional life cover to meet his financial plan. Jack can buy the life covereither outside the superannuationthroughthe superannuation.As a financial advisor, which option would you recommend?
Justifyyour advice by providing the pre-tax premium of each option, and in particular, report how/why your advice will depend on whether the policy within superannuationwill be purchasedfrom concessional contribution or not.
(For simplicity, you canmake the following assumptions: first, regarding the tax-payable of death benefits, consider the maximum tax-payablein case Jack dies today (i.e., consider the tax-payable most conservatively); second,the premium of lifecover is 5% of the sum insured. If you need any additional assumptions for your analysis, please clearly state them in your report.)
Personal Reflection on Group Work
This is an individual written reflective piece on your experience of working in a team. It is to be submitted separately from the group project. This task provides an opportunity to analyse and honestly reflect on your own performance in the group work. In this report, you should answer the following questions within 500 words (excluding the questions).
Your participation in teamwork:
1.How did you contribute to the group’s teamwork processes and to the group’s achievement of the task?
2.What would you do differently or better next time you work in a team? The team’s processes:
1.What were the strengths of your team in completing the report?
2.What issues/problems (if any) did your team encounter? How did the team address them?
3.How could you improve team processes next time you work in a team?
Please read carefully and answer the following questions. For the questions that ask whether you agree on a given statement, you must provide reasons why you agree/disagree with it.
- Mary says, “As an insurance broker, I will advise all my customers to opt own-occupation TPD insurance rather than any-occupation TPD, because it is much easier to receive the benefit of own-occupation TPD.” Do you agree with Mary?
- John says, “I would buy either a TPD policy or an income protection policy, but not both, because the two policies insure against the same risk – being disabled.” Do you agree with John?
- Discuss why the insurer does not use “self-experience approach” when estimating the group underwriting rebate of small groups.
- Provide two reasons why life insurance policies (such as life cover, TPD cover, and Trauma cover) are offered as a combined policy, and two reasons why they are offered as separate life insurance policies.
- Tom says, “Suppose that an insurer offers two agreed-value income protection policies at the same premium. If the two policies provide identical contractual terms except the sum insured and the waiting period, the policy with a shorter waiting period must provide a larger sum insured. ” Do you agree with Tom?
- Jack says, “My insurer refused to indemnify the damage of my house because my case fell into an exclusion condition. I rechecked the Key Fact Sheet (KFS) and Product Disclosure Statement (PDS) of my policy and realized that the exclusion condition is stated only in PDS. I believe that I can receive the coverage by filing a lawsuit against the insurer, because it does not disclose the information in KFS.” Do you agree with Jack?
- Domestic insurance policies usually require policyholders to notify any alteration, addition, demolition or repair of insured property, if such a change in the condition of the project costs more than $50,000. Discuss why (i) the insurer requires policyholders to notify of the change in the condition of insured property; and (ii) it waives the notification requirement for small changes that cost less than $50,000.
- Explain why self-ownership buy/sell insurance policy is more tax advantageous (with respect to Capital Gains Tax) than the cross-ownership policy.
- Cathy says, “I don’t have to buy a motor vehicle policy that insures against my legal liability for the property damage of the third party, because my company owns a product and liability insurance which insures against the legal liability of shareholders.” Do you agree with Cathy?
- Discuss why the sum insured of theft insurance is not reinstated at the payment of claims until the next period of policy.
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