AAFM Exam CWM_LEVEL_2 Topic 3 Question 10 Discussion

Section C (4 Mark)

Read the senario and answer to the question.

By calculating HLV of Mahesh indicate the shortfall in his life insurance coverage using the given data:

Mr. Mahesh age 52, retirement age 60, paying professional tax of Rs. 5800 and income tax subject to allowable deductions as Rs. 230000, reasonable self maintenance expenditure estimated Rs. 140000 p.a., life insurance premium for self Rs. 25000 with total sum assured Rs. 1200000. He also pays insurance premium of Rs. 15500 and Rs. 7000 for life insurance policy of his wife and son respectively. Rate of interest assured for capitalization of future income is at 7%