**Lesson Plan for Senior Secondary 1 - Topic: Insurable Interest II**
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**Lesson Title:** Understanding Insurable Interest in Insurance
**Subject:** Economics
**Class Level:** Senior Secondary 1
**Duration:** 60 minutes
**Core Objectives:**
1. Define 'Insurable Interest' in the context of insurance.
2. Identify situations where insurable interest exists.
3. Explain why insurable interest is a fundamental principle in insurance contracts.
4. Illustrate the consequences of lacking insurable interest in insurance policies.
**Materials Needed:**
- Whiteboard and markers
- Projector and computer (for PowerPoint presentation)
- Handouts with key terms and examples
- Case studies for group discussions
**Lesson Plan Outline:**
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**Introduction (10 minutes):**
1. **Greeting and Quick Review:**
- Greet the students and take attendance.
- Quickly recap the previous lesson on the basics of insurance and the concept of risk.
2. **Ice-Breaker Activity:**
- Ask students to discuss in pairs: "What is one valuable possession they wouldn't want to lose, and why?"
**Teaching Segment (20 minutes):**
1. **Definition and Explanation:**
- Present the formal definition of insurable interest: "A stake in the value of an entity or event for which a loss or damage would cause the insured to suffer a financial loss or certain other kinds of losses."
- Explain the importance of insurable interest: it ensures only those who face a personal financial loss can claim insurance benefits, preventing moral hazard and fraud.
2. **Criteria for Insurable Interest:**
- Economic relationship: Insured must have a financial relationship with the subject matter.
- Legal relationship: Ownership, custody, or a contract can establish insurable interest.
3. **Examples:**
- Tangible Property: Homeowners insuring their houses.
- Life Insurance: Policies taken out on immediate family members or business partners.
- Liability: Professionals insuring against potential lawsuits.
**Class Activity (15 minutes):**
- **Group Discussion:**
1. Divide the students into small groups and give each group a case study illustrating different scenarios.
2. Case Study Examples:
- A person buying insurance for a car they don’t own.
- A company insuring the life of a key employee.
- A tenant insuring the building they are renting.
3. **Guided Questions for Discussion:**
- Does an insurable interest exist in this scenario? Why or why not?
- What are the potential consequences if insurable interest does not exist?
**Interactive Segment (10 minutes):**
1. **Q&A Session:**
- Allow students to ask questions about any part of the lesson they didn't understand.
- Use real-life examples to clarify doubts and reinforce learning.
2. **Quick Quiz:**
- Conduct a short quiz to test their immediate understanding of insurable interest with multiple-choice or true/false questions.
**Conclusion (5 minutes):**
1. **Summary:**
- Recap the key points: definition of insurable interest, criteria for its existence, and examples.
- Emphasize why having insurable interest is vital for valid insurance contracts.
2. **Homework Assignment:**
- Ask students to write a one-page essay on "Why Insurable Interest is Essential in Preventing Insurance Fraud," providing examples.
**Closing:**
- Thank students for their participation.
- Provide an overview of the next lesson: Introduction to Indemnity in Insurance.
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**Assessment:**
- Participation in group discussions.
- Quiz performance.
- Quality of the homework essay and engagement in the lesson.
**Differentiation:**
- For advanced students, provide more complex case studies.
- For struggling students, use simplified definitions and more guided support.
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This lesson plan ensures that students understand the concept of insurable interest and recognize its importance in the field of insurance, setting a strong foundation for further study in economics and business.