QUESTION 1 Raj (aged 33) and his wife, Anita (aged 30), have just purchased a new condominium in Bandar Sunway for RM550,OOO. They plan to take an 80% mortgage loan of RM440,OOO for the next 35 years. Raj has the following assets: a Nissan Cefiro worth RM65,OOO, stocks on Bursa Malaysia worth RM180,OOO, group insurance by his employer worth RM400,OOO and personal insurance with a face amount of RM250,OOO. He has a hire purchase loan on the Nissan Cefiro amounting to RM40,OOO. Should he pre-decease Anita, Raj plans to provide RM36,OOO per annum for Anita till she reaches age 70. He would also like to create an Emergency Buffer fund of RM50,OOO and Final Expenses fund of RM35,OOO. Using the Capital Liquidation method, compute the amount of additional life insurance that Raj needs to purchase. Assume a discount rate of 4% per annum and that income is received at the end of the period. In the example above; as life mortality is uncertain, Raj would like to provide for his wife, Anita, an income of RM36,OOO for an indefinite time period. Using the Capital Preservation method, compute the amount of additional life insurance that Raj needs to purchase. Assume a discount rate of 4% per annum and that income is received at the end of the period.
QUESTION 1
Raj (aged 33) and his wife, Anita (aged 30), have just purchased a new condominium in Bandar
Sunway for RM550,OOO. They plan to take an 80% mortgage loan of RM440,OOO for the next 35
years. Raj has the following assets: a Nissan Cefiro worth RM65,OOO, stocks on Bursa Malaysia worth
RM180,OOO, group insurance by his employer worth RM400,OOO and personal insurance with a face
amount of RM250,OOO. He has a hire purchase loan on the Nissan Cefiro amounting to RM40,OOO.
Should he pre-decease Anita, Raj plans to provide RM36,OOO per annum for Anita till she reaches age
70. He would also like to create an Emergency Buffer fund of RM50,OOO and Final Expenses fund of
RM35,OOO. Using the Capital Liquidation method, compute the amount of additional life insurance
that Raj needs to purchase. Assume a discount rate of 4% per annum and that income is received at
the end of the period. In the example above; as life mortality is uncertain, Raj would like to provide
for his wife, Anita, an income of RM36,OOO for an indefinite time period. Using the Capital
Preservation method, compute the amount of additional life insurance that Raj needs to purchase.
Assume a discount rate of 4% per annum and that income is received at the end of the period.
QUESTION 2
In the example above; as life mortality is uncertain, Raj would like to provide for his wife, Anita, an
income of RM36,OOO for an indefinite time period. Using the Capital Preservation method, compute
the amount of additional life insurance that Raj needs to purchase. Assume a discount rate of 4% per annum and the income is received at end period.
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