NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Life Insurance Products
Mr. Kulkarni, aged 35, wants pure risk cover for 25 years only to protect his family's home loan and has no need for any maturity benefit. Which product best matches this need at the lowest premium?
A level term insurance plan fits best. It gives pure death cover for a fixed period with no maturity benefit, so the premium is lowest for a given sum assured. Endowment, money-back and whole life plans include a savings element that makes them costlier.
- ALevel term insurance planCorrect
- BMoney-back policy
- CWhole life participating policy
- DEndowment policy
Explanation
A term plan pays only on death during the term and has no maturity value, so it gives the highest cover per rupee of premium. Endowment, money-back and whole life policies bundle savings, which raises the premium for the same cover.
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