Chapter 4 - Introduction to financial products and customer needs

Question 1

What is a means test?

Answer 1

it is an assessment to determine the eligibility for benefits

Question 2

List the main types of social security benefits that may be offered by the state

Answer 2

HIM RLC

• Housing support due to low income
• Income support due to unemployment, illness or disability
• Medical care
• Retirement pensions
• Long-term care
• Child support

Question 3

What are the three main insurance principles?

Answer 3

• the existence of an insurable interest
• pre-funding of the risk
• pooling of risk

Question 4

How can logical needs be identified?

Answer 4

Logical needs are determined after a careful analysis and prioritization, followed by fitting products to those needs.

The needs may be identified as:
- Maintaining a current lifestyle
- Protection
- Accumulation for a known purpose
- Accumulation for a purpose as yet unknown from remaining disposable income or capital

This may involve taking advantage of tax-efficient arrangements.

Question 5

How do you analyse stakeholders’ needs?

Answer 5

• Must differentiate between logical needs and emotional needs
• determine whether the needs are current or would arise in the future