Observation

This question tested the ability of the candidates to state distinct features of different policies under life assurance. Many candidates attempted the question but, the performance was poor as majority of them demonstrated poor understanding of life contracts.

Some of the suggested answers were:

(a) A whole life assurance is a type of life insurance policy where the sum assured is payable only when the life assured dies within the period of insurance while in endowment assurance, the sum assured is payable at maturity or at the death of the life assured within the policy duration.

(b) Uses of life assurance

(i) Provision for one’s children education;

(ii) Provision for retirement;

(iii) It is taken for investment;

(iv) It is used as collateral security;

(v) It provides monetary estate;

(vi) It offers financial protection against sudden death;

(vii) It is used for loan repayment;

(viii) It is used to augment savings;

(ix) Its premium is used for tax relief;

(x) It is used to augment pension;

(xi) It offers financial protection against disability.

(c) Benefits covered under Life Assurance are:

(i) Death benefit - This is the amount payable to the beneficiaries or personal legal representatives of the life assured in the event of the death of the life assured.

(ii) Maturity benefit - This is a benefit payable to the assured in the event of the survival of the life assured up to the maturity of the policy.