evaluation of the familys living expenses and it comes up to be 90000 per year

Evaluation of the familys living expenses and it

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evaluation of the family’s living expenses and it comes up to be $90,000 per year. The expected inflation rate is 4% and the living expenses are needed for the next 15 years. Rose decides to leave the $1 million in a bank and as interest rate is relatively low, she will ignore the returns. Compute the total living expenses needed for the next 15 years and determine if the $1 million is enough. The premium will be paid at the beginning of each year. (5 marks) (e)Rose is also considering investing the $1 million payout. She wonders what is the approximate annualised return she should seek in order for the $1 million payout to be sufficient to cover the living expenses for the next 15 years. Compute for Rose. The premium will be paid at the beginning of each year. (5 marks) Question 5 Over the past decade, there has been a shift in the way financial products, in particular insurance products, are being distributed. There has also been much debate on unbiased advice, pure product selling, and the level of protection penetration in Singapore. As an insurance specialist, you have been approached by the regulatory body to give your opinions on the following:
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FIN375e Copyright © 2017 SIM University Page 5 of 5 Examination January Semester 2017 (a)Bancassurance has been growing steadily. Do you see this trend as the new channel to replace the current agency model for distributing insurance products and helping to improve the overall insurance protection penetration of Singaporeans? Discuss. (10 marks) (b)One of the concerns is on how to increase the insurance protection of Singaporeans. There have been discussions on the root cause of underinsurance with suggestions covering premiums, the distribution channel, consumer education, government subsidy etc. Suggest and discuss three recommendations which will help deepen the protection needs of Singaporeans. (15 marks) (3) ----- END OF PAPER -----
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