Saving
What is saving?
Savings refers to that part of our income we choose not to spend.
What is borrowing?
Borrowing means getting money from a person or financialinstitution and agreeing to pay it back at a later stage.
What is insurance?
Insurance offers protection against possible loss and tries toput the insured person back in the same financial positionthey were in before the loss occurred.
What is Financial planning?
Financial planning is an ongoing process and will need to be reviewed and revised from time to time.
What does DIRT stand for? For double points: what is it?
Deposit Interest Retention Tax (DIRT) is a tax on interest earned on savings. The financial institution deducts the tax from the interest earned and pays it to the government (the Revenue Commissioners).
Name two reasons people save?
For future planned expenditure/For emergencies/For major family events/For retirement/To earn interest/To improve credit rating and limit the need for future borrowing.
What is an asset? give an example..
An asset is something of value that you own.
What is a premium?
A premium is the amount paid by the insured person to an insurer in return for providing insurance cover for a particular risk.
What is a will?
A will is a legal document containing instructions for what should be done with personal money and property after death.
What is average clause? Double point: What is the formula for average clause?
The average clause applies in the case of underinsurance and partial loss, based on the principle of indemnity. Insured value/actual value x loss
List the three financial institutions where you could save
An Post, Credit Union, Commercials Bank
What is credit rating or creditworthiness?
Creditworthiness is an estimate of a person’s ability to payoff a loan, based on their saving and borrowing history with financial institutions.
What are the three types of motor insurance?
Third party, Third part fire and theft, Comprehensive.
Name three main factors that may impact on your financial planning
Age/Employment status/Number of dependents/Health status/Economic outlook/Marital status
What types of deposit account are offered by commercial banks? Double points: Explain two of the deposit accounts you named.
Demand/Term/Notice
Name two factors to consider when saving
Risk/Reward/Liquidity/Taxation/Convivence/Future benefits/ Terms and conditions
What is Collateral?
Collateral is something used as security for repayment of aloan. It can be sold by the lender and used to cover unpaiddebt.
What is the difference between assurance and insurance?
Insurance covers events that might happen, while assurance covers events that will happen.
Name the five stages of the financial lifecycle.
Dependent, Interdependent, Developing/Growth, Pre- retirement/Maturity, Retirement
Name the 5 principals of Insurance. Double point: explain three of them
Insurable interest/ Utmost good faith/ Subrogation/Contribution/ Indemnity
What is the formula for simple interest?
Interest = Principal × Time × Rate
Name two rights of a borrower?
Written details of agreement/A cooling-off period of ten days /Be informed of the Annual Percentage Rate (APR)/Know what the cash and total credit price are for the product/Know the number of instalments and the amount of each one/Be made aware of any fees or penalties for paying off the loan early.
Actuary/ Loss adjuster/ Insurance broker, agent
What is your estate?
Your estate is made up of everything you own.
What is compound interest? Double point: 90 seconds to say how much will be in your account if you invest 1200e a year at 8% each year for 3 years. (Calculator, NO PHONE)
Compound interest is when interest is added to the savings and then that added interest also earns interest from then on. This means that the saver earns interest on their interest and not just the principal.
Ans: 1511.65