Lesson Notes By Weeks and Term - Senior Secondary 1

Essential features of an insurance contract

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Term – 1st Term

Week: 5

Class: Senior Secondary School 1

Age: 15 years

Duration: 40 minutes of 2 periods each

Date:       

Subject:      Insurance

Topic:-       Essential features of an insurance contract

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

  1. Discuss the essential features of an insurance contract
  2. Explain some special terms used in insurance contract

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

INSTRUCTIONAL MATERIALS: Videos, loud speaker, textbook, pictures

INSTRUCTIONAL PROCEDURES

PERIOD 1-2

PRESENTATION

TEACHER’S ACTIVITY

STUDENT’S ACTIVITY

STEP 1

INTRODUCTION

The teacher reviews the previous lesson on the primary and secondary functions of insurance

Students pay attention

STEP 2

EXPLANATION

He discusses the essential features of an insurance contract

 

Students pay attention and participates

STEP 3

DEMONSTRATION

He explains some special terms used in insurance contract

Students pay attention and participate

STEP 4

NOTE TAKING

The teacher writes a summarized note on the board

The students copy the note in their books

 

NOTE

Essential features of an insurance contract

(a) Insurable interest

Insurable interest Insurable interest exists when an insured person derives a financial benefit or other kind of benefit from the continuous existence of the insured object. A person has insurable interest in something when loss of or damage to that thing would cause the person to suffer a financial loss or other kind of loss.

(b) Material fact

This is the material which will influence the judgement of a prudent insurer in fixing premium or determining whether he will take the risk or not.

(c) Disclosure

This states that the insurer needs information from the proposer to decide whether to accept an offer or to decide the price and other terms of the insurance contract.

(d) Warranties

This is described as something by which the insured undertakes that some particular things shall or shall not be done or some conditions shall be fulfilled.

(e) Adhesion 

This states that the insured must accept the entire insurance contract and all of its terms and conditions without bargaining. The insured has no opportunity to change the terms, any ambiguities in the contract.

 

Special terms used in insurance contract

(a)Insurance as a risk transfer mechanism

Insurance is a risk transfer mechanism whereby an individual or business organization can shift some uncertainty and anxieties of life on their shoulder to others

(b)Insurance as a pooling of risks

This is the main principle of insurance. It states that the insurance company takes up the responsibility of settling possible losses from the risks he accepted. The insurer collects premium from people who suffer similar risks to create a common fund, out of which compensation will be paid to those who suffer losses.

(c) Insurance as a risk reduction mechanism

This states that insurance warns individuals and business owners to embrace appropriate devices to prevent an unfortunate aftermath of risk.

EVALUATION:    1. Discuss all the essential features of a contract

  1. What are some special terms used in insurance contract?

CLASSWORK: As in evaluation

CONCLUSION: The teacher commends the students positively