Life Assurance

Learning IntentionLearning Intention Success CriteriaSuccess Criteria

1.1. Understands the terms Understands the terms linked with Life Insurancelinked with Life Insurance

1. To explain the terms linked with Life insurance

2.2. Can calculate the Can calculate the premium due when told premium due when told the cost per £100 or £ the cost per £100 or £ 1000 etc1000 etc

2. To show how to calculate insurance

premiums

What is Life Assurance

Premium : This is the amount you pay the company.You may pay one premium per year or pay it monthly

The amount insured is paid on the death of the person paying the premiums

People like to leave money to their family on the event of their death. This helps to pay for expenses .

Endownment.

Parents often want to protect their families. This type of insurance protects them for a shorter time eg 25 years. The insurance company pays the insured person the amount insured 25 years later or his family if he dies before this.

Whole Life.

Reading a Table

Reading a Table

AgeNon-

SmokerSmokerMale Femal

e

16-24

16-31 £1.80 £2.20

25 32 £1.90 £2.30

26 33 £1.95 £2.35

27 34 £2.05 £2.45

Whole Life ( with profits )

MONTHLY PREMIUM

FOR EVERY £1000 INSURED

What is the monthly premiums to insure

A 25 year old female, non smoker25 year old

female

Non-smoker

Either £1.80 or £2.20

£1.80Premium is

What is the Premium

AgeNon-

SmokerSmokerMale Femal

e

25

26

27

32

33

34

£1.80

£1.90

£1.95

£2.05

£2.20

£2.30

£2.35

£2.45

MONTHLY PREMIUM FOR EVERY £1000 INSURED

16-24

16-31

Premium for a

Female

Of Age 29 who is a

Non-Smoker

0

1 2 3

4 5 6

7 8 9

C

.

÷

x

0

+

On

²

-

Ans

=

√

NextStart Type in the Premium then click the arrow

Calculating Premium : Example 1

To insure his life for £1 000 costs Kevin £1.90 per To insure his life for £1 000 costs Kevin £1.90 per month.month.

How much will it cost to insure his life for £6 000How much will it cost to insure his life for £6 000

Insurance for £1000 = Insurance for £1000 = £1.90£1.90

£1000£1000 :: £1.90 £1.90

£1000£1000 :: £1.90 £1.90

£1000£1000 :: £1.90 £1.90

£1000£1000 :: £1.90 £1.90

£1000£1000 :: £1.90 £1.90

£1000£1000 :: £1.90 £1.90

Insurance for £6000Insurance for £6000 66

£1000 x 6 = £6000 £1000 x 6 = £6000

Premium is Premium is £11.40£11.40

= £1.90 x= £1.90 x

Calculating Premium : Example 2

To insure her life for £1 000 costs Sue £2.05 per month.To insure her life for £1 000 costs Sue £2.05 per month. Sue wishes to cover her life for £9 600Sue wishes to cover her life for £9 600. .

What will the monthly premium be?What will the monthly premium be?

Insurance for £1000 = Insurance for £1000 = £2.05£2.05

Insurance for £9 600=£2.05 xInsurance for £9 600=£2.05 x 9.69.6

Premium is Premium is £19.68£19.68

£1000 x £1000 x = £9 600= £9 600

9 6 09 6 0 00 ÷10÷10÷ ÷ 100100

9600 ÷ 10009600 ÷ 1000

Opposite of Multiply is Opposite of Multiply is dividedivide

÷ 1000÷ 1000

=9.=9.66

How Many 1 How Many 1 000’s000’s

X 9.6X 9.6

What is the premium

0

1 2 3

4 5 6

7 8 9

4.35x7.9

C

.

÷

x

34.365

+On

²

-

Ans

=

√

Insurance for £1000 Insurance for £1000 ==

£7900 = £7900 = ££

Premium Premium isis

xx

£4.35£4.35

Insurance forInsurance for

AgeAge

Premium £ Premium £ per £1000per £1000

4040 4141 4242 4343 4444 4545

3.23.200

3.63.655

3.83.800

4.04.055

4.34.355

4.84.800

New Example

Premium to insure

£7900£7900 for a person aged

4444

Start