Life Insurance Programming From the

Consumer’s View Point

Form the consumer’s view point, life insurance is one of the most
important of all purchases. A life insurance program is a plant, it is a
major bulwark of a family’s financial security and it costs a lot of money.
Life insurance therefore confronts consumers with some important
questions, including the purposes for which it should be used and the kids
and amounts that should be purchased.

Life insurance programming :

Life insurance programming is the process that used to determine the
amount of the life insurance requested on the life of prospective insured.
The process involves an analysis of the prospective insured’s current
financial condition (income, expenses, liquid and non-liquid assets,
liabilities ,savings and investment) the financial objectives the policy
owner , the development and installation of a plan designed to achieve
these objectives and periodic monitoring of the plan to determine the
extent to which the plan is achieving the objective.

Here, I will buy a life insurance policy on my father’s life. So, I determine
the amount of

 My family needs
 Then setting goals
 Re-viewing personal resources
 Policy amount and premium calculation
Analyzing the family need:
As my father is a major earner of my family. If he does at student, my
family will have requirement of money for immediate expense. Here
include unpaid tax, funeral expense and personal debt.

We also need educational expense to carry on me and my younger

brother studies. And also obviously need the income our raising period of
time.

Student Amount Amount

Cash for immediate expense:
 Unpaid tax 70,000
 Funeral expense 10,000
 Personal debt 25,000
1,05,000
Educational expense for younger brother(BBA 1st
year cost):

 Tuition fees 10,000

 Admission fees 15,000
 Form fill up 10,000
 Book, paper and 15,000
other expense
50,000
Child raising period fund :
 Food (Expense for 4,80,000
5 years child,
2000/month per
child.
 Cloth(Per year 1,00,000
5000 for each. 5,80,000
Setting goals:
After analyzing my family needs and demand, I think an insurance policy is
needs for an educational expense and our raising period of time. So I
decide to buy 10 years term insurance policy against on my father’s life.

Annually premium rate (For 1000 TK sum assured)

Age 10 11 12 13 14 15 16
20 106.62 96.38 87.94 80.34 74.37 68.92 66.10
21 106.63 96.38 87.95 80.34 74.37 68.92 66.20
22 106.63 96.38 87.95 80.35 74.38 68.93 66.20
23 106.63 96.39 87.96 80.36 74.38 68.94 66.20
24 106.64 96.39 87.96 80.37 74.39 68.95 66.20
25 106.64 96.40 87.97 80.38 74.40 68.96 66.20
26 106.65 96.41 87.98 80.40 74.42 68.98 66.20
27 106.66 96.42 88.00 80.42 74.44 69.01 66.20
28 106.67 96.43 88.01 80.44 74.47 69.04 66.20
29 106.69 96.45 88.04 80.45 74.50 69.08 66.30
30 106.71 96.48 88.07 80.49 74.54 69.13 66.30
31 106.74 96.52 88.11 80.53 74.60 69.19 66.40
32 106.78 96.56 88.16 80.59 74.66 69.27 66.40
33 106.83 96.62 88.21 80.67 74.75 69.36 66.50
34 106.89 96.69 88.31 80.76 74.85 69.48 66.60
35 106.97 96.77 88.41 80.87 74.98 69.62 66.70
36 107.06 96.88 88.53 81.01 75.11 69.79 66.80
37 107.18 97.01 88.67 81.17 75.11 69.99 67.00
38 107.32 97.17 88.85 81.36 75.52 70.22 67.20
39 107.48 97.35 89.05 81.58 75.77 70.49 67.40
40 107.68 97.57 89.29 81.84 76.08 70.80 67.60
41 107.90 97.62 89.57 82.18 76.38 71.18 67.90
42 108..16 98.10 89.88 82.48 76.75 71.56 68.20
43 108.46 98.43 90.23 82.86 77.17 72.01 68.50
44 108.80 98.80 90.64 83.30 77.64 72.52
45 109.17 99.21 91.08 83.78 78.17 73.08
46 109.59 99.66 91.58 84.31 78.75
For my family, I have to buy 15 years term insurance policy, where the
policy value TK. 10,00,000.

As, my father is 45 years old.

The annual premium will be = (10, 00,000/73.08) TK

=TK.73,080

The monthly premium will be = (73,080/12)

=Tk. 6,090

Policy term/year Bonus rate/Taka

10 97,570
15 1,61,550
20 2,24,100
25 2,83,434
30 3,48,036
35 4,18,961
40 4,97,599

Reviewing present resources:

We have some resources of earning. My father is a service holder, his
salary is taka 30,000 monthly, we have also some land from there we get
40,000 taka per month.
So,

Our present resource = (30,000 + 40,000)=70,000

Present resource = 70,000

Expense (60%) = (42,000)

= 28,000

Where we see the net present resource of my father’s is taka 28,000.

Adopting plan into action:

I have calculated and analyzed many times and applied different
technique for analyzing. After I decide to purchase 15 years insurance
policy on my father’s life. Because it is easy to pay premium and give us
sufficient protection in future.