### Lesson Plan: Understanding Insurance Premium
**Grade Level: Senior Secondary 1**
#### **Subject:** Commerce / Economics
**Topic:** Insurance Premium
**Duration:** 60 minutes
**Objective:**
- To understand the concept of insurance premiums.
- To identify factors that influence insurance premiums.
- To calculate simple insurance premiums.
- To appreciate the importance of paying insurance premiums.
**Materials:**
- Whiteboard and markers
- Projector and computer (for presentation)
- Handouts with key notes and example exercises
- Calculators
- Internet access (optional)
#### **Lesson Outline:**
**1. Introduction (10 minutes)**
- Welcome students and briefly outline the day's topic.
- Start with an engaging question: "What do you know about insurance?" Allow a few minutes for students to share their thoughts.
- Provide a brief overview of what insurance is (a risk management tool that provides financial protection against potential future losses).
**2. Explanation of Insurance Premium (15 minutes)**
- Define 'insurance premium': The amount of money that an individual or business must pay for an insurance policy.
- Use a simple analogy (e.g., "Insurance premium is like paying a subscription to Netflix. It's a regular payment made to ensure you have access to the service.")
- Show a short video clip (3-5 minutes) on the basics of insurance premiums (if available).
**3. Factors Influencing Insurance Premiums (15 minutes)**
- Discuss various factors that affect insurance premiums. These may include:
- Age and health status
- Type of insurance (health, auto, life, etc.)
- Coverage amount
- Location
- Driving record (for auto insurance)
- Occupation and hobbies
- Present real-life examples to help students grasp the concept (e.g., a 25-year-old healthy person paying lower life insurance premiums compared to a 50-year-old smoker).
**4. Calculation of Insurance Premiums (15 minutes)**
- Provide a step-by-step method to calculate simple insurance premiums.
- Example problem: "John, a 30-year-old non-smoker, buys a $100,000 life insurance policy with a premium rate of $5 per $1,000 of coverage annually. Calculate his annual premium."
- Solution: Coverage amount = $100,000 / $1,000 = 100 units
Premium per unit = $5
Annual Premium = 100 * $5 = $500
- Distribute handouts with additional practice problems and have students work in pairs to solve them.
- Review the answers as a class.
**5. Importance of Paying Insurance Premiums (5 minutes)**
- Discuss the significance of paying premiums consistently to ensure continued coverage and financial protection.
- Highlight consequences of missed payments (policy lapsing, loss of coverage).
**6. Q&A and Recap (5 minutes)**
- Open the floor for any questions and clarifications.
- Recap key points: definition of insurance premium, factors affecting premiums, calculations, and the importance of regular payments.
**7. Homework Assignment (Optional)**
- Assign a brief essay: "Why is it important to consider various factors when choosing an insurance policy and calculating premiums?"
#### **Assessment:**
- Monitor student participation and understanding during class exercises.
- Collect and review the practice problems worked on in pairs.
- Evaluate the optional homework assignment for comprehension and articulation.
**Extension/Follow-up Activities:**
- Invite a guest speaker from the insurance industry to provide deeper insights.
- Organize a simulation activity where students can role-play as insurance agents and clients to further understand premium calculations and negotiations.