INSURANCE PRACTICAL QUESTIONS

A family’s monthly expenditure is Rs. 50,000. The earner accounts for 20% of the expense. He wants to cover his family’s inflation-adjusted expenses for the next 30 years considering average inflation at 5.5% p.a. and the investment return at 7.5% p.a. The approximate life insurance needed is ________.

A family’s monthly expenditure is Rs. 60,000. The earner accounts for 15% of the expense. He wants to cover his family’s inflation-adjusted expenses for the next 35 years considering average inflation at 5% p.a. and the investment return at 8% p.a. The approximate life insurance needed is ________.

A family’s present monthly expenditure is Rs. 45,000. The earner accounts for 15% of the expense. He wants to cover his family’s inflation-adjusted expenses for the next 30 years considering average inflation at 5% p.a. and the investment return at 8% p.a. The approximate life insurance needed is ________.

Anil’s annual income is Rs. 10 lakhs p.a. and family’s present monthly expenditure is Rs. 40,000. The earner accounts for 20% of the expense. His life expectancy is estimated as 30 years from today. He wants to leave an estate of Rs. 25 lakhs for his family. Calculate the approximate life insurance needed for his family to cover inflation-adjusted expenses for the next 30 years considering average inflation at 5% p.a. and the investment return at 8% p.a. __________.

Mr. A’s annual income is Rs. 12 lakhs p.a. and family’s present monthly expenditure is Rs. 50,000. The earner accounts for 20% of the expense. His life expectancy is estimated as 30 years from today. He wants to leave an estate of Rs. 30 lakhs for his family. Calculate the approximate life insurance needed for his family to cover inflation-adjusted expenses for the next 30 years considering average inflation at 5% p.a. and the investment return at 8% p.a. __________.

A single person, aged 35, earns Rs. 7 lakh p.a. out of which taxes and self-expenses account for Rs. 1.25 lakh p.a. His salary is expected to rise by 10% p.a. whereas taxes and personal expenses are likely to rise by 6% p.a. If he expects to work till 60 years, what economic value can you enumerate on his life, if he is confident of getting a return of 9% p.a. from investments?

Arun, aged 35, earns Rs. 9 lakh p.a. out of which taxes and self-expenses account for Rs. 1.75 lakh p.a. His salary is expected to rise by 12% p.a. whereas taxes and personal expenses are likely to rise by 7% p.a. If he expects to work till 60 years, What economic value can you enumerate on his life, if he is confident of getting a return of 9% p.a. from investments?

ABC Ltd has a retirement age of 58 years. Rahim, an employee, at age 32 expected increments of 7% p.a. as per company policy when his annual net earnings were Rs. 5.50 lakhs. After 6 years, he got the next cadre and his annual net earnings became Rs. 9 lakhs. The increments in the revised cadre are at 9% p.a. He had purchased a life cover by income replacement method at age 32. What additional cover is required if he expects his investments to yield 10.25% p.a.?