Question 2 (a Alex is a smoker and travels frequently to developed countries to host scuba diving tours. In the past year, he received two traffic violations for running a red light and speeding. He drinks a glass of wine per week at social events. Alex is looking to buy life insurance. After learning about his lifestyle, discuss five (5) factors that may affect his purchase of life insurance policy. (5 marks) (b) Mr Chin and Mrs Chin have been married for 10 years, are childless and have no desire to have children. Mr Chin's annual net income is RM120,000, and he has group term insurance for the same amount. Mrs Chin's net income is RM45,000 and she has no group term insurance. Their home is valued at RM320,000, and they currently have 20 years left on their RM250,000 mortgage. Mr Chin would like to bequeath an amount of RM100,000 to the hospital that cared for tais parents. Mrs Chin inherited RM250,000 recently upon the death of her father, which they are using to maximize their retirement savings plan by contributing the amount into their employee provident fund (EPF) account. In the event of his own death, Mt Chin would like to leave the house to Mrs Chin mortgage-free and also a life insurance policy that can generate an income of at least RM30,000 per year for the next 10 years to cover the living expenses. To meet Mr Chin's needs, compute the minimum amount of life insurance coverage he should buy. Assume 3% interest earned annually by investing the money received from the life insurance policy. (6 marks) Apply your knowledge on asset and income protection, recommend and advise Mr Chin on the alternative type of insurance policy to cover the mortgage loan outstanding of RM250,000. (4 marks) Question 2 (a Alex is a smoker and travels frequently to developed countries to host scuba diving tours. In the past year, he received two traffic violations for running a red light and speeding. He drinks a glass of wine per week at social events. Alex is looking to buy life insurance. After learning about his lifestyle, discuss five (5) factors that may affect his purchase of life insurance policy. (5 marks) (b) Mr Chin and Mrs Chin have been married for 10 years, are childless and have no desire to have children. Mr Chin's annual net income is RM120,000, and he has group term insurance for the same amount. Mrs Chin's net income is RM45,000 and she has no group term insurance. Their home is valued at RM320,000, and they currently have 20 years left on their RM250,000 mortgage. Mr Chin would like to bequeath an amount of RM100,000 to the hospital that cared for tais parents. Mrs Chin inherited RM250,000 recently upon the death of her father, which they are using to maximize their retirement savings plan by contributing the amount into their employee provident fund (EPF) account. In the event of his own death, Mt Chin would like to leave the house to Mrs Chin mortgage-free and also a life insurance policy that can generate an income of at least RM30,000 per year for the next 10 years to cover the living expenses. To meet Mr Chin's needs, compute the minimum amount of life insurance coverage he should buy. Assume 3% interest earned annually by investing the money received from the life insurance policy. (6 marks) Apply your knowledge on asset and income protection, recommend and advise Mr Chin on the alternative type of insurance policy to cover the mortgage loan outstanding of RM250,000. (4 marks)
