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WorksheetsLife Insurance 4
Total questions: 15
Worksheet time: 10mins
Human Life Value (HLV)
HLV concept considers the various components of life insurance
HLV concept considers human life as a kind of property or asset that earns an income
It measures the value of human life based on an individual’s expected net future earnings
Typical concerns faced by ordinary people
Loss of Employment
Dying too early
Living with disability
Living too long
The level premium is a premium fixed such that it does not increase with age but remains constant throughout the contract period.
True
False
Level premium has two components
Term or protection component
premium
Fund Options
Cash value element
Term or protection component of Level premium
consists of that portion of premium
actually needed to pay the
savings component
excess payments of the policyholder
cost of the risk
Cash value
Under diversification the funds are spread out among various assets & Under mutuality or pooling, the funds of various individuals are combined
1 is True
2 is True
1 & 2 are True
Both are False
Post family/ Pre-retirement stage implies
When one has begun to earn a livelihood but is single
When one has become a provider who has to take care of education and other needs of children who are growing older
When the children may have become independent and left the house, just as birds leaving an empty nest behind
When one passes through the twilight years of one’s life. One could live with dignity if one has saved and made sufficient provisions
Parameters on which investment decisions are based
Diversification
Insurance Planning
Tax Considerations
Liquidity
Time Horizon
Products may be
Tangible
Intangible
Only Intangible
Only Tangible
Variants of Term Assurance
Decreasing term
assurance
Increasing term
assurance
Term assurance with
return of premiums
Term assurance with
Pension
Endowment Assurance: Combination of 2 plans:
A term assurance plan
Assurance plan
A pure endowment plan
Money back plan
Money back plan is typically an endowment plan with the provision for return of a part of the sum assured in periodic installments during the term and balance of sum assured at the end of the term
True
False
The unique selling proposition (USP) of term assurance is its low price, enabling one to buy relatively large amounts of life insurance on a limited budget
True
False
Beneficiaries under Section 6 of MWP Act
Wife alone
Wife and one or more children jointly
One or more children
Wife and one child
Section 6 of the Married Women’s Property Act, 1874 provides for
creation of a Trust
security of benefits under a life insurance policy to the wife
security of benefits under a life insurance policy to the wife and children
None of these
