Tracy and Martin are married couple and have monthly salary $42,000 and $45,000 respectively. Their total liabilities are $4,320,000 Tracy was seriously injured when she was running at the Standard Chartered Hong Kong Marathon a month ago. She needed to stay in the hospital for an operation (categorized as minor). The following expenses were incurred for her medical treatment: 12 days of hospitalisation at $880 per day $82,000 surgeon's fee $60,000 operating theatre $12,000 anaesthetist's fee $4,700 post-hospitalisation outpatients visits (9 times) $20,500 home nursing service (20 days) $16,500 physiotherapy treatment Below is the coverage provided by Tracy's health insurance plan: Coverage Maximum benefit amount (HKS) $850 per day Room and board (up to 120 days) Room and board $2,800 per day (intensive care unit) (up to 30 days) $780 per day Home nursing fee (up to 31 days) Physiotherapy fee $15,000 Pre- and post-hospitalisation Maximum number of visits: 12 visits outpatient visits Co-payment per visit: $100 Surgeon's fee Complex: $200,000 Major: $100,000 Intermediate: $60,000 Minor: $36,000 Anaesthetist's fee 35% of surgeon's fee payableNote 1 Operating theatre S46,000 Top-up benefit $650 per day Hospital cash (up to 60 days) Note 1: The percentage here applies to the surgeon's fee actually payable or the benefit limit for the surgeon's fee according to the surgical category, whichever the lower. Note 2: The amount here applies to eligible medical expenses actually payable in excess of the corresponding benefit limit according to the surgical category, subject to 35% coinsurance. $80,000 Note 2 Required: (a) Calculate the total dollar amount borne by Tracy for this injury. You are required to complete the following table as the working of your calculation. (11 marks) Benefit item Actual cost Amounts Amounts Amount incurred covered by exceeding borne by insurance the company coverage ? ? ? ? Tracy (6) An insurance agent offers Tracy another health insurance plan that reimburses actual medical expenses only. It includes a $1,000 deductible on the total amount of medical expenses incurred, a 20% coinsurance, and an out-of-pocket limit of $30,000. How much dollar amount is borne by Tracy for the medical treatment of this injury if she enrolls in this health insurance plan? (5 marks) c) Calculate Tracy's insurance need by using the EASY method and DINK method respectively. Tracy expects the total funeral cost is $160,000. (4 marks) (d) A straight life or limited payment life insurance policy normally consists of the amounts of guaranteed cash value and non-guaranteed dividend. What are guaranteed cash value and non- guaranteed dividend? Briefly explain. (word limit: 80 words). (4 marks) (e) Tracy comes across some provisions, such as incontestability clause, grace period, and policy reinstatement, in a life insurance contract. Brief explain to Tracy the meaning or purpose of these three provisions. (6 marks) Tracy and Martin are married couple and have monthly salary $42,000 and $45,000 respectively. Their total liabilities are $4,320,000 Tracy was seriously injured when she was running at the Standard Chartered Hong Kong Marathon a month ago. She needed to stay in the hospital for an operation (categorized as minor). The following expenses were incurred for her medical treatment: 12 days of hospitalisation at $880 per day $82,000 surgeon's fee $60,000 operating theatre $12,000 anaesthetist's fee $4,700 post-hospitalisation outpatients visits (9 times) $20,500 home nursing service (20 days) $16,500 physiotherapy treatment Below is the coverage provided by Tracy's health insurance plan: Coverage Maximum benefit amount (HKS) $850 per day Room and board (up to 120 days) Room and board $2,800 per day (intensive care unit) (up to 30 days) $780 per day Home nursing fee (up to 31 days) Physiotherapy fee $15,000 Pre- and post-hospitalisation Maximum number of visits: 12 visits outpatient visits Co-payment per visit: $100 Surgeon's fee Complex: $200,000 Major: $100,000 Intermediate: $60,000 Minor: $36,000 Anaesthetist's fee 35% of surgeon's fee payableNote 1 Operating theatre S46,000 Top-up benefit $650 per day Hospital cash (up to 60 days) Note 1: The percentage here applies to the surgeon's fee actually payable or the benefit limit for the surgeon's fee according to the surgical category, whichever the lower. Note 2: The amount here applies to eligible medical expenses actually payable in excess of the corresponding benefit limit according to the surgical category, subject to 35% coinsurance. $80,000 Note 2 Required: (a) Calculate the total dollar amount borne by Tracy for this injury. You are required to complete the following table as the working of your calculation. (11 marks) Benefit item Actual cost Amounts Amounts Amount incurred covered by exceeding borne by insurance the company coverage ? ? ? ? Tracy (6) An insurance agent offers Tracy another health insurance plan that reimburses actual medical expenses only. It includes a $1,000 deductible on the total amount of medical expenses incurred, a 20% coinsurance, and an out-of-pocket limit of $30,000. How much dollar amount is borne by Tracy for the medical treatment of this injury if she enrolls in this health insurance plan? (5 marks) c) Calculate Tracy's insurance need by using the EASY method and DINK method respectively. Tracy expects the total funeral cost is $160,000. (4 marks) (d) A straight life or limited payment life insurance policy normally consists of the amounts of guaranteed cash value and non-guaranteed dividend. What are guaranteed cash value and non- guaranteed dividend? Briefly explain. (word limit: 80 words). (4 marks) (e) Tracy comes across some provisions, such as incontestability clause, grace period, and policy reinstatement, in a life insurance contract. Brief explain to Tracy the meaning or purpose of these three provisions. (6 marks)