Class: Senior Secondary School 1 (SS1, SS 1, SSS1, SSS 1)
Term: First Term
Week: 11
Age: 15 years
Duration: 45 minutes
Subject: Insurance
Curriculum Theme: Insurance
Previous Lesson: Insurable Interest.
Topic: Insurance interest (cont)
Subject Matter: creation of insurable interest, difference between insurable contract and wagering contract

Specific Objectives

By the end of the lesson, pupils should be able to:

Cognitive Domain:

Define insurable contract.
Define wagering contract.
Explain how insurable interest is created.
State at least three differences between an insurable contract and a wagering contract.

Affective Domain:

Appreciate the importance of insurable interest in valid insurance contracts.
Recognise the legal implications of a wagering contract.

Psychomotor Domain:

Discuss the methods of creating insurable interest.
Present the differences between the two contract types in a tabular form.

Participate actively in class discussions on insurance contracts.

Reference Materials

The following resources were used in planning this lesson:

9 Years Basic Education Curriculum
State Unified Scheme of Work
Comprehensive Insurance for Senior Secondary Schools by E.O. Olaniyan

Instructional Materials

The teacher will teach this lesson with the aid of:

Charts illustrating insurable interest scenarios
Tabular presentations showing differences between contract types

Rationale for the Lesson

This lesson helps pupils understand how a valid insurance contract is formed and the specific requirements for insurable interest. It enables them to differentiate between legal insurance agreements and illegal gambling, which is important for making informed decisions in real-life financial situations.

Prerequisite/Previous Knowledge

Pupils should have a basic understanding of what an insurance contract is and the concept of insurable interest from the previous lesson.

Lesson Content/Board Summary

Insurable Interest (Cont.)

Creation of Insurable Interest

Insurable interest can arise in several ways, mostly based on legal or financial relationships between parties.

The following are ways insurable interest is created:

Ownership: An owner has an insurable interest in their property.
Contract: A person may acquire insurable interest through a contract, such as a mortgage, lease, or sales agreement.
Legal Liability: A person may have an insurable interest in potential legal liability arising from their actions or ownership (e.g., motor insurance).
Family Relationship: Spouses have insurable interest in each other’s lives. Parents may have it in their children’s lives, and vice versa, depending on financial dependency.
Creditor-Debtor Relationship: A creditor has an insurable interest in the life of their debtor, or in the property mortgaged by the debtor.

Difference Between Insurable Contract and Wagering Contract

Insurable Contract: An insurable contract is a legal agreement where one party (the insurer) agrees to compensate another party (the insured) for specified losses in exchange for a premium. It requires the presence of insurable interest.

Wagering Contract: A wagering contract (or gambling contract) is an agreement between two parties where one party promises to pay money or money’s worth to the other party on the happening or non-happening of a specified uncertain event, without any pre-existing insurable interest.

The following are the differences between an insurable contract and a wagering contract:

Basis: An insurable contract is based on the principle of indemnity and requires insurable interest. A wagering contract is based on chance and does not require insurable interest.
Legality: Insurable contracts are legal and enforceable by law. Wagering contracts are generally void in law and not enforceable.
Purpose: The purpose of an insurable contract is to provide protection against a possible future loss. The purpose of a wagering contract is to gain profit from an uncertain event.
Risk: In an insurable contract, the risk already exists and is transferred from the insured to the insurer. In a wagering contract, the parties create a new risk between themselves.
Public Policy: Insurable contracts are considered beneficial to society. Wagering contracts are generally seen as against public policy.

Teaching Methods/Instructional Techniques

Discussion, Lecture, Demonstration, Question and Answer, Visual Aids

Instructional Procedures

Step 1: Introduction

Time: 5 minutes
Teaching Skill: Set Induction
Teacher’s Activity: The teacher greets the pupils and reviews the previous lesson on the meaning and importance of insurable interest. The teacher then introduces the new topic: the creation of insurable interest and the difference between insurable and wagering contracts.
Pupils’ Activity: Pupils respond to greetings and recall points from the previous lesson. They listen attentively to the introduction of the new topic.
Learning Point: Pupils connect the new lesson to previous knowledge and understand the lesson’s focus.

Step 2: Explanation of Creation of Insurable Interest

Time: 10 minutes
Teaching Skill: Explanation/Elucidation
Teacher’s Activity: The teacher explains the various ways insurable interest can be created, giving practical examples for each method (e.g., ownership, contract, legal liability, family relationship, creditor-debtor relationship). The teacher uses charts to illustrate these points.
Pupils’ Activity: Pupils listen, take notes, and ask questions for clarification regarding the creation of insurable interest.
Learning Point: Pupils understand how insurable interest is established in different situations.

Step 3: Defining Insurable Contract

Time: 5 minutes
Teaching Skill: Definition/Concept Formation
Teacher’s Activity: The teacher defines an insurable contract, highlighting its key characteristics, especially the requirement of insurable interest and the principle of indemnity.
Pupils’ Activity: Pupils listen and write down the definition and characteristics of an insurable contract.
Learning Point: Pupils can define and identify an insurable contract.

Step 4: Defining Wagering Contract

Time: 5 minutes
Teaching Skill: Definition/Concept Formation
Teacher’s Activity: The teacher defines a wagering contract, explaining that it is based on chance, lacks insurable interest, and is generally void in law.
Pupils’ Activity: Pupils listen and write down the definition and characteristics of a wagering contract.
Learning Point: Pupils can define and identify a wagering contract.

Step 5: Comparing Insurable Contract and Wagering Contract

Time: 10 minutes
Teaching Skill: Comparison/Differentiation
Teacher’s Activity: The teacher uses a tabular presentation to highlight and explain the differences between an insurable contract and a wagering contract based on basis, legality, purpose, risk, and public policy. The teacher encourages pupils to identify additional differences.
Pupils’ Activity: Pupils observe the tabular presentation, listen to the explanations, and contribute to identifying differences. They also take notes.
Learning Point: Pupils clearly understand the distinctions between the two types of contracts.

Step 6: Pupils’ Discussion and Summary

Time: 5 minutes
Teaching Skill: Group Discussion/Summarization
Teacher’s Activity: The teacher divides pupils into small groups to briefly discuss and summarise the key differences between insurable and wagering contracts. Selected groups present their findings.
Pupils’ Activity: Pupils discuss in groups and present their summaries, reinforcing their understanding.
Learning Point: Pupils articulate the differences confidently and collaboratively.

Step 7: Evaluation/Review

Time: 5 minutes

Teaching Skill: Questioning/Assessment

Teacher’s Activity: The teacher evaluates the learning by asking the following questions:

What is an insurable contract?
How is insurable interest created? Mention two ways.
State three differences between an insurable contract and a wagering contract.
Why is a wagering contract generally not enforceable by law?

Pupils’ Activity: Pupils answer orally and in writing.

Learning Point: Pupils demonstrate understanding of the lesson.

Step 8: Conclusion

Time: 5 minutes
Teaching Skill: Consolidation
Teacher’s Activity: The teacher reiterates the main points of the lesson, emphasising the importance of insurable interest for a valid insurance contract and the illegality of wagering contracts. The teacher assigns homework: “Research and write down two examples of situations where insurable interest might be difficult to prove.”
Pupils’ Activity: Pupils listen to the summary and copy down the homework assignment.
Learning Point: Pupils consolidate their understanding and prepare for further exploration of the topic.

Lesson Keywords

Insurable Interest – A legal right to insure arising out of a financial relationship, recognised by law, between the insured and the subject matter of insurance.
Insurable Contract – A valid legal agreement for protection against loss, requiring insurable interest.
Wagering Contract – An agreement based on chance, without pre-existing insurable interest, generally void in law.
Indemnity – The principle of insurance that ensures the insured is compensated for their actual loss, not to make a profit.
Void Contract – A contract that has no legal effect and cannot be enforced by law.

Differentiation

The teacher will provide additional support to pupils who struggle with understanding the legal terms by using simpler language and more relatable examples. Advanced pupils will be encouraged to research specific legal cases related to insurable interest and wagering contracts.

Note for teachers using this lesson plan

Ensure that the examples used for creating insurable interest are clear and relevant to the pupils’ context. Emphasise the practical implications of differentiating between insurable and wagering contracts to help pupils understand the importance of legal insurance agreements.