Skip to content

NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Case Studies in Comprehensive Financial Advice

Caselet: Meera, aged 35, is a salaried professional with a dependent spouse and child, a home loan, and no life cover. Her annual income is Rs 18 lakh and her liabilities are Rs 40 lakh. Her adviser uses the human life value approach. Which of the following insurance recommendations is most appropriate for her?

A pure term insurance plan with adequate sum assured is most appropriate. Meera has dependants and a loan, so she needs large, low-cost protection to replace her income and clear liabilities. Endowment or ULIP products give inadequate cover per rupee of premium, and health cover does not address death.

  1. AA endowment plan with a small sum assured for savings
  2. BA pure term insurance plan with a sum assured covering income replacement and liabilitiesCorrect
  3. CA ULIP with a sum assured equal to one year's premium
  4. DA health insurance policy alone, as life cover is unnecessary

Explanation

With dependants and a loan, the need is high cover at low cost, which a pure term plan provides. Endowment and ULIP plans give low cover relative to premium. Health insurance does not replace income on death.

Did you get it right without looking?

One question tells you little. A timed set on Case Studies in Comprehensive Financial Advice shows your real accuracy, how long you take and where you lose marks.

Practise Case Studies in Comprehensive Financial AdviceFree diagnostic mock

More Case Studies in Comprehensive Financial Advice questions