IRRM Assignment

Problem Number 1 and 12 2 and 11 3 and 10 4 and 9 5 and 8 6 and 7

Group 1 2 3 4 5 6

1. Mr. and Mrs. Sharma, aged 50 and 47, both have a life expectancy of 35 years. Calculate the insurance required based on need based and income replacement methods on Mr. Sharmas life. You have the following information. Current investments Rs. 25,00,000 Expenses Rs. 3,00,000 (including 1 lakh of Mr.Sharmas personal expense) Mr. Sharmas income post tax Rs. 3.5 lakhs Final costs Rs. 1 lakh Post tax, post inflation rate/discount factor is 3% 2. Mr. Jagdish has given his personal details as follows:a. b. c. d. e. f. g. Current age 30 years, Plans to retire at age 65 Job profile: - Senior Manager in Telco Ltd. with Annual Salary of Rs. 10,00,000 Annual Cash Outflow Professional Tax of Rs. 5,000 Income tax Rs. 1,95,000 Reasonable self-maintenance expenditure of Rs. 1,00,000 p.a. Life insurance premium for self insurance Rs. 20,000 having sum assured Rs. 20 lakhs. h. Life insurance premium for Sulekha(wife) Rs. 13,000 having sum assured Rs. 5 lakhs i. Life insurance premium for Aditya(son) Rs 7000 having sum assured Rs 2 lakhs Assume: Rate of interest for capitalization of future income is at 10%. As a financial planner recommend the insurance cover using HLV method. 3. Mr. and Mrs. Noronha, aged 40 and 36 years both have a life expectancy of another 40 years. Their data sheet depicts the following information: a. Mr. Noronha is the sole bread earner of the family and the family has no children b. Current Market Value has a Market investments of Rs. 20,00,000 c. Annual Expenses Rs. 4 lakhs (including Rs. 1 lakh of Mr. Noronha personal expenses) d. Mr. Noronha income post tax Rs. 3.5 lakhs e. Final cost Rs 1 lakh(funeral expenses of Mr. Noronha) f. Post tax, post inflation rate/discount factor is 3%

Calculate the insurance required based on need based and income replacement methods. 4. Mr Rohan has approached you for his life insurance needs, as a financial planner which of the following data will be required by you to calculate his life insurance needs as per HLV method a. Self life insurance premium with its sum assured b. Self profession tax and self income tax paid c. Income earned by his wife Renuka as well as her life insurance sum assured and its premium d. Income earned by his son Ajay aged 12 e. Income received by Rohan from HUF since being a co-member of such HUF f. Average annual earnings during his entire working career g. Appropriate Capitalisation Rate h. Present age, Years of Working life planned 5. LIC premium table depicts the following data for a certain policy in which your client Mr. Sanjay is interested. Tabular Premium: i) Rs. 33.10 per Rs.1000 sum assured ii) Rs 2 less for yearly mode iii) Re. 1 less for half yearly mode iv) Rs. 3 less for sum assured of Rs 1,00,000 and above Double accident is allowed up to a maximum of Rs. 10 lakhs sum assured on payment of Re.1 per 1000 sum assured. As a financial planner calculate the yearly premium for Rs. 15 lakhs sum assured with occupation extra of Rs. 4 thousand sum assured. 6. Calculate the premium from the following data: a. Plan: Money back b. Sum assured: Rs. 1,00,000; rebate for large sum assured Rs. 2 per thousand c. Mode: half yearly; rebate 1.5% d. Age: 36 years e. Proposal accepted at ordinary rates with double accident benefit f. Tabular premium: Rs. 69.25, premium for double accident benefit is Re. 1 per thousand per annum 7. Calculate the half yearly premium for the data given below: SA: Rs. 3,00,000 Date of Birth: 16.06.1982 Date of Maturity: 15.09.2036 Term: 25 years Double accident Benefit: Re. 1 per thousand Mode Half yearly Tabular premium: i. Age 24 Rs. 49.50 ii. Age 25 Rs. 50.60 iii. Age 26 - Rs. 52.00

8. Calculate the yearly instalment: a. Sum assured: Rs. 1,00,000 b. Plan term: Endowment Plan 20 years

c. Date of Maturity: 23.12.2022 d. Date of Birth: 28.06.1974 e. Tabular premium: i. Age 27 Rs. 26.93 per thousand ii. Age 28 Rs. 27.83 per thousand iii. Age 29 - Rs. 28.37 per thousand f. Premium adjustment: i. 5% extra for monthly mode ii. Re. 1 less for half yearly mode iii. Rs. 1.50 less for yearly mode Rebate of Rs. 1.50 for sum assured of Rs. 50,000 and above. Assume that premium will be paid annually. 9. Calculate the half yearly premium for the data given below: a) Plan-Term-endowment 25 years, tabular premium Rs. 53.40 per thousand b) Accepted with DAB extra Re. 1 per thousand S.A. c) Occupation extra Rs. 3 per thousand d) S.A. Rs. 1,50,000 Rebate Rs. 2 e) Yearly mode = Rebate less 3% f) Half yearly premium less 1.5% g) Quarterly premium NIL h) Monthly premium plus 5% 10. Calculate the loan amount that can be given: a. Date of commencement: 20.08.1990 b. Plan term: Endowment with profit, 25 years c. Sum assured: Rs. 1,50,000 d. Last premium paid 20.08.2003 e. Surrender Value Factor 55% f. Bonus Accrued Rs. 1,000 / 1,000 11. Calculate the surrender value from the information below: a. SA: Rs. 1,00,000 b. Date of Birth: 28.03.1985 c. Last premium paid: 28.03.1999 d. Term: 30 years e. Bonus: Rs 80 per thousand SA f. Mode of payment: Quarterly g. Date of Calculation: 28.06.1999 h. Surrender Value factor i. 72% ( for 14 years) ii. 78% (for 15 years) iii. 80% (for 16 years) 12. Calculate the yearly premium for the data given below: a. Date of Birth: 19/09/1979 b. Date of Commencement of Cover: 21/02/2005 c. Plan term: Endowment with profits 25 years d. Sum assured: Rs 1,00,000 e. Mode Rebate: Yearly-3% and Half yearly-1.5% f. Sum assured rebate: upto Rs 49,999 Re. 1 per thousand

Rs. 50,000 and above Rs. 2 per thousand g. Tabular premium: i. Age 24 Rs. 49.50 ii. Age 25 Rs. 51.75 iii. Age 26 - Rs. 52.50