Financial Underwriting Quiz

Razia, 57, owns a garment manufacturing unit in Mumbai. She wants a cover of Rs. 2 crores and has an annual income of Rs. 10 lakhs. She has submitted the correct set of income proofs.

Will Razia be granted the proposed coverage?

Select the correct answer from the list below.

• Yes, Razia will be granted the proposed coverage since it is permissible for her age and as per the financial underwriting guidelines.

• No, Razia cannot be granted the proposed coverage as her age is beyond 56 years. The permissible cover allowed for age 56 years and above is 10 times the annual income.

If a customer does not have 3 months salary slip to submit because he is a new joiner, what is the document that needs to be submitted in lieu of the salary slips?

Select the correct answer from the list below.

• Latest copy of professional receipt/contract agreement

• Appointment letter copy

• Previous company's full and final settlement invoice

Which of the following documents helps one understand earned and unearned income?

Select the correct answer from the list below.

• Bank statement showing the source of funds (preceding 6 months)

• Balance Sheet

• ITR

• Computation of Income

Mr. Johnson, a manager in a software company in USA, holds an NRI account with HDFC Bank. He as applied for an HDFC Life savings plan with a sum assured of Rs. 75 lakhs and has submitted the following documents:

ITR (last 2 financial years), last 3 months salary slips, Employer contract letter, NRI questionnaire, KYC documents or details, Valid work permit, FATCA annexure

Which additional document does Mr. Johnson need to submit?

Select the correct answer from the list below.

• Bank statement of a bank based in India and showing salary credits, because this helps decide the financial eligibility

• Employer's appointment letter

• Foreign bank statement, because this helps validate the applicant's address as NRls may not have a permanent address outside India

Mr. Patel has applied for an HDFC Life term plan with sum assured of Rs. 1 crore and a HDFC Life savings plan with sum assured of Rs. 60 lakhs. Sharan, the sales person, has assessed Mr. Patel's financial health using the following parameters: motive, overall profile suitability, need, quantum of cover, possibility of a fraud, moral hazard or over-insurance.

Which other parameters does Sharan need to assess Mr. Patel on?

Select the correct answer from the list below.

• Capacity to pay regular premiums, availability of the right kind of documents and willingness to submit the same

• Prospect's educational background and willingness of his family to pay the premiums in case he fails to do so.

On what basis does financial underwriting justify the proposed cover?

Select the correct answer from the list below.

• Health status of the life assured and the family members

• The potential economic loss in case of death of the life assured

• Family background of the life assured

• The potential economic loss in case of death of any of the family members

Mr. Suri's tenant pays him Rs. 25, 000 every month as rent. He earns Rs. 50, 000 salary as well. Recently, he received his FD interest and the annual dividend on the shares he had invested in a few years ago.

Which of the following incomes would be considered as Mr. Suri's earned or active income?

Select the correct answer from the list below.

• FD interest

• Salary

• Rent

• Dividend on shares

For Term Plan, which type of income is considered ?

Select the correct answer from the list below.

• Earned / Active income.

  Example : Salary, Business Income

• Unearned / Passive Income.

  Example : Any kind of interest ( FD, Stock, NSC), rent, Dividend

Identify the Active income.

Select all correct answers from the list below

• Regular income as monthly rent

• Yearly dividend from own company, Swastika Impex

• Income from partnership firm

• Yearly dividend on shares

• Working with an MNC...salaried