Internal Assignment for April 2022

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Ans-3(A)

Introduction

Financial planning is important for every people. People should save some amount for future. Savings is
a method of setting aside some of the money usually in parts so as to attain the desired targets. So
every people have to invest in different type of finance.

Concept and Application

ULIP- Unit Linked Insurance Plans- is a plan where, investments are subject to risks associated with the
capital markets. ULIPs give investors the benefits of both insurance and investment under a single
united plan. However, the risk in investment portfolio is borne by the policy holder. ULIPs also give the
triple advantage of insurance, wealth creation and tax-saving investment.

Endowment plan- is a combination of insurance and investment. In contrast to term plan, which is a
pure insurance, there is a maturity benefit in endowment plans. Typical maturities are ten fifteen or
twenty years up to certain age limit. Some policies also pay out in case of critical illness.

Term insurance plan- type of life insurance in which no cash is accumulated for the policyholder. This
type of life insurance, the insurance cover is provided only for a limited time. This is also known as pure
insurance because the premium buys the protection in case of death. If the insured person dies during
the policy term, death benefit is paid to their family member. The term plan provides high cover at low
premium rates which helps in fulfilling the future requirements of their family in case of his/her
absence.

Conclusion

Ans- 3 (B)
Introduction
Retirement plan -is an important phase in an individual’s life. A retired life is more meaningful if the
individual has made appropriate plans in terms of personal and financial objectives. An individual could
derive an estimate of his/her financial needs after retirement based on the salary increments, rate of
inflation and tax liabilities. An individual should keep a moderately conservative attitude in estimating
the future financial needs owing to the unpredictable nature of these factors.

Concept and application-

An amount for savings and investment, a percentage amount of an individual’s must be kept aside. The
retirement plans should include medical insurance and social security benefit plans.

Retirement plan guidelines

1. Time Horizon- the present age and expected retirement age are the basis of the initial
groundwork for retirement planning. The longer the time horizon between present day and
retirement, the higher would be the level of risk that an individual’s portfolio could withstand.
The risks of return volatility are mitigated with a longer time horizon.
2. Spending Requirements- precise assessment of retirement spending goals would help an
individual to plan retirement accurately as higher spending needs in the future requires
additional savings today.
3. After Tax Rate of Return- after tax rate of return must be calculated to assess the feasibility of
the portfolio producing the needed income. The retirement income should be estimated by
keeping in view the tax deductions applicable.
4. Portfolio allocation- the most important step in retirement planning is to arrive at proper
portfolio allocation that balances risks and returns and still meets post retirement income
expectations.
5. Estate planning- proper estate planning and life insurance coverage ensure that an individual’s
assets are distributed in a way that his/her family members do not experience financial hardship
following the individual’s death.

Retirement plan for Ankur- He earn 15 lakhs per am. He can take any plan so that he can fulfill his and
their family desire. He has to focus on more saving so that he can enjoy the retirement time.

Conclusion:-.

Ans 3 (B)