### Lesson Plan: Insurance - Concept of Contribution
#### Class: Senior Secondary 1
#### Subject: Business Studies / Commerce
#### Topic: Concept of Contribution in Insurance
#### Duration: 60 minutes
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#### Learning Objectives:
By the end of this lesson, students will be able to:
1. Define the principle of contribution in insurance.
2. Explain the importance of the principle of contribution.
3. Illustrate how the principle of contribution applies in real-life insurance scenarios.
4. Solve basic problems involving contribution between multiple insurers.
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### Lesson Materials:
- Whiteboard and markers
- PowerPoint slides or chart paper for visual aids
- Handouts with example problems
- Textbook or reference material on insurance principles
- Sample insurance policy documents (optional)
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### Lesson Structure:
#### Introduction (10 minutes)
1. **Warm-up Discussion:**
- Ask students if anyone has heard about different types of insurance (car, health, home, etc.).
- Discuss why insurance is important in daily life.
2. **Introduce the Topic:**
- Write the word "Contribution" on the board.
- Briefly define insurance and introduce the concept of the principle of contribution.
#### Content Delivery (25 minutes)
1. **Definition and Explanation:**
- Use PowerPoint slides or chart paper to provide a clear definition:
**Contribution**: A fundamental principle in insurance whereby multiple insurers covering the same risk share the indemnity payment proportionately.
- Discuss why this principle exists – to prevent the insured from making a profit from insurance and to ensure fair distribution of claims among insurers.
2. **Illustration with an Example:**
- Explain a real-life scenario where the principle of contribution applies.
For instance:
If a person has two fire insurance policies from different companies, and the house burns down, both companies will share the claim proportionally.
- Use a simple numerical example to illustrate:
- House insured for $100,000 with Company A and $100,000 with Company B.
- Total insurance = $200,000.
- If a loss of $50,000 occurs, each company pays $25,000 (50,000/200,000 * 100,000).
3. **Importance of Contribution:**
- Ensure students understand the role of contribution in:
- Preventing over-insurance.
- Promoting cooperation among insurance companies.
- Ensuring fair compensation without profit.
#### Class Activity (15 minutes)
1. **Group Exercise:**
- Divide students into small groups and distribute handouts with different scenarios that involve contribution.
- Each group works on calculating the payouts from multiple insurers.
2. **Review and Discuss:**
- After 10 minutes, have groups present their solutions.
- Discuss the answers and correct any misunderstandings.
#### Conclusion (10 minutes)
1. **Summary:**
- Recap the key points: Definition, importance, and application of the principle of contribution in insurance.
2. **Q&A Session:**
- Open the floor for any questions or clarifications.
#### Assessment (5 minutes)
- **Exit Ticket:**
- Ask students to write down one real-life scenario where the principle of contribution might apply and give a brief explanation.
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### Evaluation:
- Observations during group activities and discussions.
- Correctness of answers during the group presentation.
- Responses on the exit tickets.
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### Homework:
- Assign a short essay on "How the Principle of Contribution Benefits Insurance Companies and Policyholders."
- Reading assignment from the textbook on related insurance principles (e.g., indemnity, subrogation).
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### Notes:
- Adjust the complexity of numerical examples based on the students' grasp of basic arithmetic and algebra.
- Encourage students to bring examples of real insurance policies (with personal details redacted) for further study and practical understanding.
This lesson plan aims not only to teach the theoretical aspects of the principle of contribution but also to engage students through practical problem-solving and real-world application.