Lesson Notes By Weeks and Term - Senior Secondary 1

Term – 1^st Term

Week: 13

Class: Senior Secondary School 1

Age: 15 years

Duration: 40 minutes of 2 periods each

Date:       

Subject:      Insurance

Topic:-       Insurable interest II

SPECIFIC OBJECTIVES: At the end of the lesson, pupils should be able to

1. Discuss the methods of acquiring insurable interests in life insurance
2. Discuss the methods of acquiring insurable interests in property insurance

INSTRUCTIONAL TECHNIQUES: Identification, explanation, questions and answers, demonstration, videos from source

INSTRUCTIONAL MATERIALS: Videos, loud speaker, textbook, pictures

INSTRUCTIONAL PROCEDURES

PERIOD 1-2

NOTE

METHODS OF ACQUIRING INSURABLE INTEREST IN LIFE

INSURANCE

a. By Marriage: A person who is married has an insurable interest on his or

her spouse. Wife can affect policy on the life of her husband and husband

can also affect policy on the life of his wife.

b. In case of partnership: A partner can insure the other partner’s life up to

the limit of their financial involvement such as they stand to lose on the

death of any one of them.

c. In the case of creditor: A creditor can also stand to lose money if a

debtor dies before repaying the loan thus the creditor has an insurable

interest to the extent of the loan plus interest.

d. By Exception: According to the Industrial Assurance and Friendly

Societies Act 1948, amended by the Amendment Act 1958, a person may

assure the life of a parent, step parent or grandfather up to an amount of 30

pounds which is considered to be enough for their burial expenses.

e. By Financial relationship: An insurable interest can exist between

parents and children however it must involve financial relationship whereby

the parents or the children suffer financial loss following the destruction of

the basis on which the relationship was established.

METHODS OF ACQUIRING INSURABLE INTEREST IN PROPERTY

INSURANCE

a. Ownership: The owner of a property has insurable interest in the

property which allows him to seek the insurance policy.

b. Agent: An agent can affect insurance on behalf of his principal provided

the principal possesses an insurable interest in that circumstance.

c. Mortgagees and mortgagors: This often relates to the purchase of house,

a building society which the mortgagees and the mortgagors who is the

purchaser. Both parties under this arrangement have an insurable interest

in the property. The insurable interest of the mortgagees will be limited to

the extent of the loan granted to the mortgagor.

d. Bailees: The goods or property of another person which is legally in

possession of certain people can be insured by them against their future

financial loss while in their care for its full value since they would be

responsible for the replacement of the goods or properties, if damaged or

destroyed.

e. Husband and wife: A spouse has insurable interest in the property of

his/her partner so they also have mutual interest on each other’s lives.

f. Executor and trustees: There is often need to effect an insurance policy

to cover the property of his upon which an executor or a trustee assumes

control. As a trustee or executor of a will, one is legally responsible for the

property under his charge.

EVALUATION:    1. Discuss three methods of acquiring insurable interests in life insurance

2. Discuss three methods of acquiring insurable interests in property insurance

CLASSWORK: As in evaluation

CONCLUSION: The teacher commends the students positively