Submit your solution document in the form of a single MS Word file
The Attachement below is the case study.
The information provided in this case study will be used at various parts of this assisgment.
Question 2 (38 marks)
(a) Using the information given in the case study above, determine Belle’s
insurance requirement using the CPF Insurance Estimator found at
https://www.cpf.gov.sg/cpf_trans/ssl/financial_model/insurance_estimator/ie
1.asp
Assume in your study that under Dependant’s Needs:
i. Household expenses (including Parental Support) will be reduced by 30% in the
event of Belle’s death. Round down the result to the nearest whole number.
(need to show the step bt step how to derive the answer)
ii. Expected returns and Inflation are 2% and 3.5% respectively
(need to show the step bt step how to derive the answer)
In your answer, insert a detailed printout of your results – all the headings and their items must
be shown (a sample is shown below)
(18 marks)
b) Insurance is an important risk management tool for personal financial
planning, and insurers need to be able to make a proper and unbiased
evaluation of the risk they underwrite. To do this, insurers depend on the
principle of Uberrimae Fidei. Please read the two references given below:
1. Your Guide to Life Insurance found with The Life Insurance
Association (LIA) at
http://www.lia.org.sg/files/document_holder/Consumer_Guides/YGTLI_Eng%28Oct07%
29.pdf,
2. Section 25 (5) of the Life Insurance Act (Chap 142)
“No Singapore insurer shall use, in the course of carrying on insurance
business in Singapore, a form of proposal which does not have prominently
displayed therein a warning that if a proposer does not fully and faithfully
give the facts as he knows them or ought to know them, he may receive
nothing from the policy.”
i. What is meant by Uberimmae Fidei, especially in the context of insurance
contracts? Refer to Investopedia.
(6 marks)
ii. Why is Uberrimae Fidei important to the underwriting and issuing of contracts of
insurance? What will be the impact of non-disclosure of material facts.
(6 marks)
iii. If Belle were to die of cancer, comment on which of Belle’s insurance policies
will be paid out, and if not, why not. (8 marks)
Question 3
(a) Belle would like advice on how she can contribute to SRS in 2014. How and in what
amount can she contribute towards Supplementary Retirement Scheme (SRS) Contribution,
when would she would be able to claim relief for the contribution. Give her your advice
with reasons.
(10 marks)
(b) From the SRS Booklet (dated 18 February 2011) downloaded from the Ministry of Finance
website, what type of investments are allowed under the SRS.
(5 marks)
(c) What are the criteria for, and total amount of Qualifying Child Relief Belle can claim for the
Year of Assessment 2014? Show working to justify your answers.
(5 marks)
Question 4 (22 marks)
(a) Discuss with Belle how she will be able to give her assets to her family (including her parents)
in the event she passes on.
(10 marks)
b) In the event that Belle passes on without making any formal arrangement (as discussed in (a)above) to pass on her estate, how will her estate then be distributed. Explain with relevant references.
(12 marks)
