Financial Planning Skills Test, Grade 3 | Practical Life and Non-Life Insurance Claims and Coverage Cases

Subtracting projected receipts of JPY 31 million and available financial assets of JPY 7 million from projected outlays of JPY 58 million gives a total death protection need of JPY 20 million. The existing death benefit already provides JPY 8 million, leaving JPY 12 million of additional protection. Funding all projected outlays through insurance without deducting public benefits and other resources would overstate the need.

As a general rule, the eight-day period begins on the later of the application date and the date the document describing the cooling-off right is delivered. June 5 is therefore the starting point in this case. Exclusions, procedural requirements, and insurer-specific periods longer than eight days may apply, so the cautionary information should also be checked in an actual transaction.

Life insurance salespersons and agency staff generally lack authority to receive disclosure, so orally telling them about a medical history does not itself constitute disclosure to the insurer. C must answer the insurer's questions truthfully by correcting the disclosure form or using another prescribed method. An intentional or grossly negligent omission or false statement may lead to termination of the contract or denial of a benefit.

A designated proxy claim rider allows a predesignated person to claim specified insurance benefits on the insured's behalf when special circumstances, such as inability to express intent, prevent the insured from claiming. The benefits covered and the permitted proxy claimants vary by contract, so the policy terms and insurer's instructions must be checked for an actual claim.

For an ordinary covered contract, protection is based on up to 90% of the policy reserve and similar amount at failure, so JPY 12 million × 90% equals JPY 10.8 million. The benchmark is not total premiums paid or the contractual death benefit. Changes to actuarial assumptions during a contract transfer may also reduce the eventual insured benefit.

Earthquake insurance must be set between 30% and 50% of the fire insurance amount, so the percentage limit alone would permit up to JPY 120 million × 50%, or JPY 60 million. A separate JPY 50 million cap applies to buildings, however, making JPY 50 million the maximum in this case. The lower of the 50% amount and the absolute building cap controls.

For earthquake insurance beginning on or after January 1, 2017, a large half loss pays 60% of the earthquake insurance amount. JPY 2.4 million × 60% therefore equals JPY 1.44 million. Payment is based on the recognized loss category—total, large half, small half, or partial loss—not simply the actual repair bill.

For covered fire insurance and certain other non-life contracts, the protection corporation supports full payment of claims for insured events occurring before failure and during the three months after failure. The September 15 fire falls within three months of the August 1 failure, so the calculated JPY 5 million claim is covered on that basis. Protection differs by line of insurance and policyholder category.

Compulsory automobile liability insurance caps injury losses at JPY 1.2 million per victim, so it does not pay the full JPY 1.5 million in this case. It covers liability for human injury, not property damage such as damage to a bicycle. Voluntary automobile insurance and its terms must be considered separately for losses above the limit and for property damage.

Fire insurance indemnifies actual loss, so even when multiple policies cover the same damage, the insured generally cannot receive more than the actual loss. Although the two sums insured total JPY 40 million, the actual loss is JPY 28 million, so JPY 28 million is the combined maximum. An insurer's right to recover a contribution from another insurer after paying more than its own share does not allow the insured to collect more than the loss.