Simran a seasoned professional working with a well-known IT company, earning around
Rs. 1.50 Lacs per month. Her husband Samarjeet Singh is a Doctor and a successful
practicing surgeon earning around Rs. 5.00 Lacs per month. They have a daughter, 3-
year-old Simarpreet Kaur. Simran and Samarjeet are planning to buy a house for a price
of Rs. 5.00 Cr. in next 2-3 months and taking a loan from a Bank. While having a
conversation with them you got to know that the total Insurance Cover is only Rs 5.00
lacs in the family put to gather all the insurance and only a Health Insurance of Rs. 2 Lacs
given by Simran’s company.
As a consultant to Dr. Samarjeet and Simran you are expected to:
a. Do a comprehensive calculation of Human Life Value and identify the exact amount of
the Insurance Cover to be given. (5 Marks)
b. As per your understanding what all Insurance Products would you like to suggest them
as a complete financial protection for the family.
Human Life Value
Net Income =
Present Value of the Net income: Rs 6.50
The amount of insurance coverage that should be given is 80% of 6.50 which is Rs 5.20
They should take Long-Term Care Insurance since its coverage provides nursing-home care, home health care, and personal or adult day care for individuals age 65 or older or with a chronic or disabling condition that needs constant supervision. They should also take life insurance, car insurance and home insurance that they are about to buy.