Fig. 4 shows an advertisement for travel insurance. TRAVEL INSURANCE FOR ALL AGES Come to PAXICOVER DIRECT Open 7 days a week Apply by phoning 01234 567 890 or apply online at www.paxicoverdirect.com with a 10% discount on your premium. [Figure 4] Use the information in Fig. 4 to help you to answer the following questions.

Mark scheme

Marking points from the official mark scheme (May/June 2012). The mark or mark type is shown in brackets.

1. [2] (a) (i) Any two points × 1 mark or one well explained point × 2 marks:
2. might be taken ill on holiday/accidents
3. might have their luggage lost or stolen
4. may have to cancel the holiday
5. may have travel delays
6. may wish to claim compensation if something goes wrong
7. can be compulsory for some holiday bookings.
8. Any other relevant point.
9. [2] (a) (ii) Any two personal risks × 1 mark each:
10. motor
11. property
12. contents
13. buildings
14. fire
15. theft
16. personal liability
17. life
18. personal accident
19. health
20. pet
21. card
22. mortgage protection
23. flood.
24. Any other relevant risk.
25. [2] (b) (i) Any two points × 1 mark each:
26. 10% discount on premiums
27. available 24/7
28. can postpone payment by using credit card
29. can study what is on offer before making the application for insurance
30. can compare insurance companies before making a choice
31. can arrange insurance sitting at home.
32. Any other relevant point.
33. [2] (b) (ii) Any two points × 1 mark each:
34. saving in labour costs/as many of the processes are computerised
35. can target customers all over the world
36. can give detailed information about the policy offered
37. can target customers who want to purchase as much as possible online
38. can change information whenever they want
39. no need to open new offices
40. comparison websites.
41. Any other relevant point.
42. [3] (c) (i) Any three points × 1 mark each:
43. yes she will be able to claim but she should not expect to receive compensation from both insurance companies – against the principle of contribution – compensation may be shared by the two insurance company or one insurance company will pay with the knowledge of the other company.
44. Any other relevant point.
45. Principle = 2 max.
46. [3] (c) (ii) Any three points × 1 mark each:
47. probably not – it depends if the illness was related to the heart condition. He did not complete the proposal form with utmost good faith. He should have declared that he had a history of heart problems. If the illness is nothing to do with his heart, he may be able to claim.
48. Any other relevant point.
49. (Allow proximate cause.)
50. Principle = 2 max.
51. [6] (d) Level 2 (4-6 marks)
52. Has discussed whether or not the issue of Paxicover Direct being a large company is an advantage or a disadvantage to people who insure with the company and has given a reasoned opinion.
53. Many insurance companies are very large organisations. Many are multinational companies with interests and offices in many countries. Insurance is based on pooling of risk so they are likely to be able to offer insurance at reasonable rates because they are operating with a large pool of paid premiums from which to meet claims. They may be able to take advantage of economies of scale – savings in marketing costs and the employment of specialist staff. They are also able to offer a range of insurance policies to suit many types of customer and to be able to offer different ways of obtaining insurance as shown in Fig. 4.
54. On the other hand, because they are very large organisations, the personal touch is likely to be lost. It may be difficult to obtain information about queries that arise. It may be difficult to make a claim or to make contact with the company when the need arises. They are likely to have systems for dealing with applications for insurance and for claims. Communication with them may be easy or difficult from different parts of the world. The advertisement gives very little information about the travel insurance offered. It would be important for any potential customer to make sure what was covered and what was excluded before taking out insurance with Paxicover Ltd.
55. Where the company is located and how large it is, is unlikely to affect those who insure with the company. What matters is how efficient the company is and how easy it is to claim if the need arises.
56. Level 1 (1-3 marks)
57. Has commented on Paxicover Direct being a large company offering insurance with/without any opinion as to whether it will affect people who insure with it.
58. Paxicover Direct, as a large company, will have offices in many countries. It may be easy to obtain insurance, it may not. People wanting to insure will not worry as to whether the company is a large company or not. They insure in case something happens to them.