Learner Name

ID Number
Organisation

FORMATIVE ASSESSMENT:
LEARNER WORK FILE VERSION 1
Unit Standard Title: Apply knowledge and skill to explain the
application of structured long term insurance
portfolios

Unit Standard No: 242590

Unit Standard Credits: 6

NQF Level: 5

Mark information:
Specific
1 2 3 4 5 Total % C / NYC
Outcome/Section

Maximum marks 22 20 6 12 60 100

This outcomes-based learning material was developed by Masifunde Training Centre with funding from INSETA in July 2014.
The material is generic in nature and is intended to serve as a minimum standard for the industry.

This material may be used and copied for your own personal use. This material may not be republished, nor may it be reverse
engineered, translated, modified or used to make derivative information of materials without the express written permission of
INSETA which can be obtained by contacting [email protected]. Short excerpts from the material may be
reproduced without authorisation on condition that the source is indicated.
Disclaimer
Whilst every effort has been made to ensure that the learning material is accurate, INSETA and Masifunde Training Centre
(Pty) Ltd take no responsibility for any loss or damage suffered by any person as a result of the reliance upon the information
contained herein.
242590 Learner Work File Ver. 1 1

Formative Activities

Section 1: 22 marks

Activity 1

In this activity, you have to explain the features of structured long term insurance
portfolios.

1.1 Source one of your client’s structured long term insurance portfolio documents.
Analyse this investment portfolio and summarise it in terms of the guarantees and
market exposure. (3)

1.2 Complete the following table with regards to the term and liquidity constraints of
a structured long term insurance portfolio.
(5)
Equity Unit Trust Endowment Policy
Term

Liquidity

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1.3 Analyse the fee structure of the structured long term insurance portfolio that you
have used for Activity 1.1. Give a brief outline of the fee structure and mention what
the impact of this fee is on the performance of the particular portfolio. (3)

1.4 Give a brief description, in your own words, of your understanding of a “tranche
based product”. (2)

1.5 Complete the following table with reference to the risk as well as returns in the
mentioned insurance portfolios. (5)

Equity Unit Trust Endowment Policy

Potential
Return

Risk

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Equity Unit Trust Endowment Policy

1.6 Explain the difference between surrender value and intrinsic value of an
investment. (4)

Section 2: 20 marks

Activity 2

In this activity, you have to explain how insurers construct and manage structured
long term insurance portfolios.

2.1 You are required to explain how insurers construct and manage structured long
term insurance portfolios. Use information from one of your clients and the following
guidelines:

a) Analyse an investment to determine whether it is managed actively or

passively.
b) Indicate how value is created within the investment in (a) above. (5)

c) Analyse the market exposure in a client’s portfolio in terms the potential risk
and return of the investment. Clearly attach all evidence in your Work Learner
File. (5)

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2.2 Briefly discuss the difference between active and passive management of an
investment in terms of creating value within the investment. (4)

2.3 List and explain at least 3 (three) economic conditions that will have an impact on
the ongoing and final performance of a structured long term insurance portfolio.
(3 x 2 = 6)

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Section 3: 6 marks

Activity 3

In this activity, you have to assess the suitability of a structured long term insurance
portfolio investment for a specific client.

3.1 Refer back to the insurance portfolio that you have used for Activity 1.1. Mention
the risks associated with this specific portfolio . (4)

3.2 Write notes on one situation where you might have to recommend a structured
long term insurance portfolio to a client with reference to the client’s total portfolio
and investment objectives. (2)

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Section 4: 12 marks

Activity 4

In this activity, you have to interpret the performance of a structured long term
insurance portfolio investment in relation to other classes.

4.1 Identify competitive structured long term insurance portfolio competitive products.
Compare and evaluate them in terms of features, risk and potential return. (8)

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4.2 Briefly compare a structured long term insurance portfolio investment with an
alternative traditional investment product. Complete your answer in the table below:
(4)
Structured Long Term Insurance Traditional Investment Product
Portfolio

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All qualifications and part qualifications registered on the

National Qualifications Framework are public property. Thus the
only payment that can be made for them is for service and
reproduction. It is illegal to sell this material for profit. If the
material is reproduced or quoted, the South African Qualifications
Authority (SAQA) should be acknowledged as the source.

SOUTH AFRICAN QUALIFICATIONS AUTHORITY

REGISTERED UNIT STANDARD:
Apply knowledge and skill to explain the application of structured long term
insurance portfolios
SAQA US UNIT STANDARD TITLE
ID
242590 Apply knowledge and skill to explain the application of structured long
term insurance portfolios
ORIGINATOR ORIGINATING PROVIDER
SGB Insurance and
Investment
QUALITY ASSURING BODY
-
FIELD SUBFIELD
Field 03 - Business, Commerce and Finance, Economics and
Management Studies Accounting
ABET UNIT OLD NQF NEW NQF CREDITS
BAND STANDARD LEVEL LEVEL
TYPE
Undefined Regular Level 5 New Level 6
Assignment Pend.
REGISTRATION REGISTRATION REGISTRATION SAQA
STATUS START DATE END DATE DECISION
NUMBER
Reregistered 2009-11-03 2012-06-30 SAQA
0160/05
LAST DATE FOR LAST DATE FOR ACHIEVEMENT
ENROLMENT
2013-06-30 2016-06-30

In all of the tables in this document, both the old and the new NQF Levels are
shown. In the text (purpose statements, qualification rules, etc), any reference to
NQF Levels are to the old levels unless specifically stated otherwise.
This unit standard replaces:

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242590 Learner Work File Ver. 1 10

Old
New NQF Replacement
US ID Unit Standard Title NQF Credits
Level Status
Level
Apply technical knowledge
and insight to explain the New Level
Level
14531 application of structured Assignment 3 Complete
5
long term insurance Pend.
portfolios

PURPOSE OF THE UNIT STANDARD

This Unit Standard is intended learners who are Product Developers, Wealth
Managers, Personal Financial Planners and Intermediaries.

The qualifying learner is capable of:

Explaining the features of structured long term insurance portfolios.

portfolios.

specific client.

investment in relation to other asset classes.

LEARNING ASSUMED TO BE IN PLACE AND RECOGNITION OF

PRIOR LEARNING
It is assumed that learners are competent in Communication and Mathematical
Literacy at NQF Level 4.

UNIT STANDARD RANGE

The typical scope of this Unit Standard is:

rates, bull/bear market, inflation and currency movements.

but are not limited to, liquidity, tax, performance, and underlying instruments or
components.
, collective
investments, offshore portfolios, fixed deposits and traditional smoothed bonus
portfolios.
Specific Outcomes and Assessment Criteria:

SPECIFIC OUTCOME 1
Explain the features of structured long term insurance portfolios.

ASSESSMENT CRITERIA

ASSESSMENT CRITERION 1
The components of a structured long term insurance portfolio is analysed with

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reference to guarantees and market exposure.

ASSESSMENT CRITERION 2
The term and liquidity constraints of a structured long term insurance portfolio are
explained with reference to a particular product.

ASSESSMENT CRITERION 3
The fee structure of a structured long term insurance portfolio product is analysed
and an indication is given of the impact of the fee on the performance of the
product.

ASSESSMENT CRITERION 4
The use of tranche based products is explained with reference to pricing, benefits
and features of selected products.

ASSESSMENT CRITERION 5
The relationship between the returns in a structured long term insurance portfolio
and the returns in the market are explained and an indication is given of why there
is a difference.

ASSESSMENT CRITERION 6
The difference between surrender value and intrinsic value of an investment is
explained with reference to conditions under which it is reasonable to exit a
structured long term insurance portfolio.

SPECIFIC OUTCOME 2
Explain how insurers construct and manage structured long term insurance
portfolios.

ASSESSMENT CRITERIA

ASSESSMENT CRITERION 1
An investment is analysed to determine whether it is managed actively or passively
and an indication is given of how value is created within the investment.

ASSESSMENT CRITERION 2
The market exposure in a specific portfolio is analysed in terms the potential risk
and return of the investment.

ASSESSMENT CRITERION 3
The effect of different economic conditions on the ongoing and final performance
of a structured long term insurance portfolio is explained with examples.

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SPECIFIC OUTCOME 3
Assess the suitability of a structured long term insurance portfolio investment for a
specific client.

ASSESSMENT CRITERIA

ASSESSMENT CRITERION 1
The risks associated with structured long term insurance portfolios are explained
with reference to a specific portfolio.

ASSESSMENT CRITERION 2
Situations where it is appropriate to recommend a structured long term insurance
portfolio to a client are explained with reference to the client's total portfolio and
investment objectives.

SPECIFIC OUTCOME 4
Interpret the performance of a structured long term insurance portfolio investment
in relation to other classes.

ASSESSMENT CRITERIA

ASSESSMENT CRITERION 1
Competitive structured long term insurance portfolio competitive products are
compared and evaluated in terms of features, risk and potential return.

ASSESSMENT CRITERION 2
A structured long term insurance portfolio investment is evaluated against an
alternative traditional investment product.

UNIT STANDARD ACCREDITATION AND MODERATION OPTIONS

assessor with the relevant ETQA or ETQA where a Memorandum of Understanding

(MOU) exists with the relevant ETQA.
will enable achievement of this Unit
Standard must be accredited as a provider through the relevant ETQA or ETQA
where a Memorandum of Understanding (MOU) exists with the relevant ETQA.
cording to
the moderation guidelines and the agreed ETQA procedures.

UNIT STANDARD ESSENTIAL EMBEDDED KNOWLEDGE

N/A

UNIT STANDARD DEVELOPMENTAL OUTCOME

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N/A

UNIT STANDARD LINKAGES

N/A

Critical Cross-field Outcomes (CCFO):

UNIT STANDARD CCFO IDENTIFYING

The learner is able to identify and solve problems in which responses show that
responsible decisions using critical thinking have been made in indicating
conditions under which it is reasonable to exit a structured long term insurance
portfolio investment.

UNIT STANDARD CCFO COMMUNICATING

The learner is able to communicate effectively in explaining structured long term
insurance portfolios to a client.

UNIT STANDARD CCFO DEMONSTRATING

The learner is able to demonstrate an understanding of the world as a set of related
systems in explaining the risk return relationship of structured long term insurance
portfolios and the appropriateness for a selected client.

All qualifications and part qualifications registered on the National Qualifications

Framework are public property. Thus the only payment that can be made for them is for
service and reproduction. It is illegal to sell this material for profit. If the material is
reproduced or quoted, the South African Qualifications Authority (SAQA) should be
acknowledged as the source.

INSETA copyright 2014