ACE School for Professional Studies

Student Name: Program: Module: Source of Questions

Not shared CFP RAIP

Workbook

Pr

Page 1 of 9

ev

the extent of 6 lakh @ Rs. 1.50 per thousand and with an occupational extra of Rs. 2.75 per thousand sum assured. This Company does not allow rebate for SA. However a rebate @ 1.5% is allowed for Hly. mode of Payment. The Tabular Rates are given as under:Age 25 26 27 28 29 30 Calculate what premium he has to pay on half yearly basis under this Policy. Suggested Answers are: 1. 31116/2. 31118/3. 62236/4. 31568/-

y:
TP 48.2 48.4 49.1 49.4 49.8 50.1

45. Mr. Ram has proposed a policy of Life Insurance for Rs. 12 lakh from 14-07-2001 under endowment with profit plan with DAB and EPDB for 20 years. He was born in Shimla on 12-11-1974, The proposal was accepted by the insurance Company with the desired rider to

Age 27

Preview of one of the Query sheets with our solutions, to give you an idea how serious and result oriented all our faculties at ACE School for Professional Studies are. Solution Question Answer Values considered 49.1 =1.5%*E2 =E2-E3 =E4*1200 =1.5*600 =2.75*1200 =SUM(E5:E7) =E8/2 49.1 0.7365 48.3635 58036.2 900 3300 62236.2 31118.1

ie w

O nl

AC

 ACE School for Professional Studies

Before his death on 18th August, 2007 he had paid premium due in the month on 6th August. The mode of payment was Quarterly and the amount of premium being Rs. 320/-. A sum of Rs. 36,000/- as simple reversionary bonus had vested. Insurance Co. has declared IB after valuation on 31-03-2007 as Rs. 68 per thousand. What would be the amount of death Claim? 1. 89,4000 2. 86,000 3. 86,320 4. 89,720

O nl

48. Mr. X was insured for Rs. 50,000 under an Endowment Plan for 28 years. He had taken this plan on his marriage anniversary in the year 1999 on 20th August.

y:

premium for age nearer birth day 27 is 27.46; for age 28 is 27.83 and for age 29 are 28.37. Insurance Company charges 5% extra for monthly mode of payment and allows rebate @ 1,50 per thousand of tabular premium if the SA is 50,000 and above. Suggested answers : 1. Rs. 97/2. Rs. 98/3. Rs. 99/4. Rs. 100/-

AC

47. Mr. Ajay wants to take a policy on his life for Rs. 40,000 for a term of 35 which should mature on 24-12-2042. His DOB is 28-06-1979.Kindly calculate the amount of premium he has to pay per month (rounded off to the nearest rupee). Tabular

Age 28

=E25*40 =ROUND(E27/12,0)

49. Calculate Paid up value of a Endowment Policy which was taken in March 1995

Pr

Page 2 of 9

ev

ie w

E
27.83 =5%*E23 =E24+E23 50000 36000 =68*50 320 =SUM(E36:E41)

27.83 1.3915 29.2215 1168.86 97

50000 36000 3400 320

89720

 ACE School for Professional Studies

98. A planner and prospect agreed for an endowment policy for Rs. 4 Lakhs limited payment for 10 years with a term of 20 years. If reversionary bonus is taken as 7.5% per annum and terminal bonus as Rs. 150 per 1000 what will be maturity value? a) Rs. 10,50,000 b) Rs. 10,60,000 c) Rs. 10,70,000 d) Rs. 10,80,000 138. There is an excess of 10% in a policy and in the example where there is an amount of Rs. 20000 that will be the claim then the insurance company will pay _________. a) Rs. 0 b) Rs. 2000 c) Rs. 18000 d) Rs. 20000

y:

2. With profits, Bonus declared @ 45 per thousand for the year 1995 to 2000 which was increased to Rs. 50 per thousand for 2001 and 2002. For the year 2003 and 2004 Bonus is declared @ 60 per thousand. 3. Type of Bonus Simple Reversionary Bonus. 4. Term 27 years. Suggested Answers: 1. 50,000 2. 114,500 3. 123,500 4. Nil

AC

of which the last premium paid was March 2003. Other Particulars of the Policy are as under:1. SA- 1,50,000

=(45*6+50*2+60)*15000 0/1000 =9/27*150000 =SUM(E52:E53)

ie w

O nl

400000 =150*400000/1000 =7.5%*D68*20 =SUM(D68:D70)

Pr

Page 3 of 9

ev

E
64500 50000 114500 400000 60000 600000 1060000 20000 =10%*D75 =D75-D76 20000 2000 18000

 ACE School for Professional Studies

Use the information below to provide answers to Questions 186 to 188 Your client earns Rs. 60,000 annually. She is married and has a child aged three. If she dies, she wants her family to receive Rs. 45,000 annually for the next 20

Pr

Page 4 of 9

ev

years, with the first payment due on her death, and to provide Rs. 120,000 for her childs college education in fifteen years time. She also wants to set up a final expense fund of Rs. 15,000, and pay off the mortgage, automobile loan, and outstanding credit card balances. Extracts of her personal balance sheet are as follows: Assets Condominium Rs. 210,000 Personal Property Rs. 50,000 Automobile Rs. 40,000 Mutual Funds Rs. 50,000 Bank Deposits Rs. 10,000

ie w

O nl

y:

185. Two ways of assessing life insurance needs is a need based approach and the other is the income replacement method. What in your judgement would be the additional life cover required for Mr.Rao on the basis of each of the two approaches. Mr. Rao is the sole income earner in the family. Mrs. Rao is a homemaker. They are aged 40 and 36 respectively. Life expectancy for both of them is another 40 years. They have no children. Other information you have is: Current investment port folio - Rs. 20 Lakhs; Estimated final Expenses - Rs. 1 Lakh; Present annual expenses-Rs. 3 Lakhs (including a Lakhs of Mr. Raos personal expenses); Mr. Raos post-tax income in hand-Rs. 3.5 Lakhs; Assume a post tax, post inflation return/discounting factor of 3%. a) Rs. 28 Lakhs; Rs. 40 Lakhs b) Rs. 46 Lakhs; Rs. 58 Lakhs c) Rs. 26 Lakhs; Rs. 58 Lakhs d) Rs. 28 Lakhs; Rs. 60 Lakhs

Investmen HLV

AC
Final Cost Spouse

Need Based Approach 100000 Rs. 4,761,643.03

4861643.027 2000000 2861643.027 4861643.027 Income Replacement Method =250000/ Rs. 8,333,333.33 D90Rs. 6,000,000.00

 ACE School for Professional Studies

y:

Life Insurance Rs. 100,000 Mortgage Reducing Term Assurance Rs. 100,000 Group Death Benefit Rs. 30,000 Total Rs. 590,000 Liabilities Automobile Loan Rs. 15,000 Mortgage Rs. 100,000 Credit Card Balance Rs. 5,000 Total Rs. 120,000 Assuming that the life insurance proceeds and liquid funds can earn 6% annually, calculate 186. The present value of the annual incomes she would like to ensure for the family

-45000 20 6% =PV(D124, D123,D12 2,,1) =PV(0.06, 15,,120000)

O nl

a) 500,246 b) 516,146 c) 547,115 d) 900,000

Pr

Page 5 of 9

ev

188. The minimum amount of additional life insurance your client should purchase to attain her financial goals. a) No insurance is needed

ie w

187. The present value of her childs college education cost a) 50,071 b) 55,921 c) 119,827 d) 130,875

AC
-45000 20 6% Rs. 547,115.24 Rs. 50,071.81 597186 135000 590000 597186 135000 590000

 ACE School for Professional Studies

189. Calculate half yearly premium on SA 150000/-on the basis of the following data: Plan Term Endowment 25 years, tabular premium Rs. 53.40 per thousand Accepted with DAB extra Re.1 per thousand S.A. Occupation Extra Rs. 3 per thousand S.A. Rs. 1, 50,000 Rebate Rs. 2 Yearly Mode = Rebate less 3% Half yearly premium Rebate Less 1.5% Quarterly premium Rebate Nil Monthly premium Rebate plus 5% a) 8070 b) 4095 c) 7740 d) 8610

Tabular premium payment mode discount large SA discount +occupation + DAB

O nl
1, 50,000 Half yearly 1%

190. Calculate loan amount: Sum Assured Rs.

ie w

Mode of Payment Rebate for half-yearly mode

ev

Pr

Page 6 of 9

y:
Paid-up value No. of premiums paid X sum assured / No. of premium payable + bonus if any. Surrender value paid up value X S.V factor/100 Paid-up value = 9 X 1, 50,000/100 = Rs.13, 500 + 22, 500 = 36, 000 (As last premium paid was 13.02.92, the interim bonus on 31.03.92 is not taken for calculation loan amount) Surrender value = 36,000 X 52.3/100 = Rs.18, 828

53.40 0.80 = 52.60 2.00 = 50 .60 + 3 + 1 = 54.60 54.60 * 150 = 8190 /2 4095

AC

b) 14,3000 c) 152,000 d) 440,000

=ROUNDUP((D137D139+D138),-3)

143000

 ACE School for Professional Studies

Date of calculation Table Term Surrender value Rs. Vested bonus declared from 3/88 to 3/91: Rs. 150 per thousand sum assured Interim bonus declared on 31.03.92: Rs. 75 per thousand sum assured. Loan: 90% of surrender value if the policy is at force or 85% of surrender value if policy is in paid up condition. a) 18,828 b) 16,004 c) 24,711 d) 21004

18.03.95 16-50 52.30%

Paid up value = 9 * 150000 / 100 + 22500 = 36000 SV = 52.3 / 100 * 36000 = 18,828 Loan 18828 * 85 / 100 = 16004.

O nl

191. Calculate paid-up value:

Sum Assured Rs. 1, 00,000

ie w

Pr

Page 7 of 9

ev

Plan Without Profit Endowment Term 20 years Date of commencement 20.02.1995 Last premium paid 20.02.2000 Quarterly Mode Date of Birth 20.02.1950

y:
No. of premium paid X sum assured/number of premium payable Rs.1, 00,000 X 21/80 = 26, 250 Paid-up value Rs.26, 250 26250

AC

Date of commencement Date of last premium paid

13.02.88 13.02.92

Loan amount: 85% of surrender value, as it is paidup condition 18, 828 X 85/100 = Rs.16, 003.8 or 16, 004

85 % because policy is though paid up but lapsed.

 ACE School for Professional Studies

192. The sales literature of an insurer, pertaining to a particular participating policy, claims that in the past, the company had paid maturity benefits of two-and-a half times the basic sum assured on their 15-year endowment policies. The company uses the uniform compound reversionary bonus system and the terminal bonus system to distribute profits to its participating policyholders. Assuming a uniform reversionary bonus rate of 35 per thousand sum assured was declared over the last 15 years, a basic sum assured of 50,000 and level annual premiums of 5,066.

2.5 times of Sum Assured

AC

Tabular premium 50.05 a) 25,000 b) 50,000 c) 26,250 d) 30,250

Basic Sum Assured Reversionary Bonus Terminal Bonus

Pr

Page 8 of 9

ev

ie w

O nl

192. Ignoring mortality, calculate the terminal bonus content in the maturity proceeds a) 50,000 b) 48,750 c) 83,767 d) 75,000 END

y:

E
Rs. 125,000.00 Rs. -50,000.00 Rs. -26,250.00 Rs. 48,750.00

 ACE School for Professional Studies

THIS WAS JUST ONE RANDOMLY PICKED SOLVED QUERY SHEET TO MAKE YOU UNDERSTAND HOW WE HANDLE STUDENT QUERIES. We understand that this course is not a full time study course where time to study is decided. Knowing that you can be working or pursuing some other study along with this course, you need more support to understand course content completely and clear examinations. Hence we support you in the best manner we can, provided that you are also committed to achieve result. Whenever you are studying, send a query to faculty(from our website) in the query sheet format and you will get solution along with detailed analysis that what was incorrect in your approach. Please note that this is preview only, contact at info@asps.edu.in or call at 01145050201 to 07 if you are interested to have more details. In case you have any study related queries, you can write to faculty desk at
faculty@asps.edu.in

AN ISO 9001:2008 COMPANY ACE School for Professional Studies 26/32, Pal Mohan Sadan East Patel Nagar,Delhi-110008 Tel: 011-45050201-07 Web: www.asps.edu.in

AN APPROVED EDUCATION PROVIDER FOR:

Page 9 of 9