NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Life Insurance Products
A 35-year-old client wants pure risk cover at the lowest premium for 25 years, with no maturity benefit, to protect his family's income. Which product best fits this need?
A term insurance plan fits best. It gives pure death cover for a fixed period with no maturity benefit, so cost per rupee of cover is lowest. Endowment, money-back and whole life plans bundle savings or lifelong cover, making premiums much higher.
- AMoney-back plan
- BEndowment plan
- CTerm insurance planCorrect
- DWhole life participating plan
Explanation
Term insurance provides only death cover for a fixed period with no survival benefit, so it is the cheapest per rupee of cover. Money-back, endowment and whole life plans include savings elements, which raise premiums.
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