Planit:Detailed Takaful Policies Exercise Answer Key

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Question One:

Karim’s Family Takaful has a sum assured of RM 35,000 and the participant’s account is worth RM 15,000 for a total amount available of RM 50,000 on death or disability. It has the estate named as the beneficiary, and he contributes RM 200 to the takaful every month. This policy pays out 100% in the first year of Karim’s complete disability, not indexed. He plans on participating in this family takaful until his assumed mortality.

Tasnim’s Whole Life insurance policy for RM 20,000 is also to go to the estate, and she pays a RM 120 premium every month. This policy pays out 100% in the first year of Tasnim’s complete disability, not indexed.

Karim’s conventional 5-Year Term Insurance expires in three years and has coverage for RM 40,000, for which he pays RM 1,600 each year. The beneficiary of this policy is the estate. In the event of Karim’s disability, the policy pays out 25% in the first year, 25% in the second year, and 50% in the third year. It does come with an indexation on benefits of 4.0%.


Answer:

To be able to enter detailed insurance information, first click Policies in the upper right corner.

To add Karim’s family takaful:

  1. Click Policy in the right hand corner
  2. Enter a Description for Karim’s family takaful.
  3. Set the Account Type and Regulatory Type to Insurance Policy
  4. Ensure that the Ownership is set to 100% for Karim Shadeed.
  5. Here you can enter the Payment Mode as Month, and the Payment Amount is $200
  6. Click Save
  7. Karim’s Permanent Takaful should now appear on the summary screen. Click Coverage beside it to add value to the policy.
  8. Enter a new Description and set the Type to Whole Life since he will participate in the takaful until his death.
  9. The Insured is Karim Shadeed, and the Death Benefit is $50,000 (combined sum assured and participant’s account).
  10. After setting Estate as the Beneficiary in the drop-down menu, click Save
  11. You can also add Karim’s corresponding disability coverage by clicking Coverage beside it to add value to the policy.
  12. Enter a new Description and set the Type to Disability (Personal).
  13. The Insured is Karim Shadeed, and the Lump Sum Benefits are $50,000 as was previously revealed.
  14. For the 1st Year enter 100% so all of the policy will pay out at once.
  15. Uncheck the Taxable Benefits checkbox, since they are not taxable when paid.
  16. The Index Rate is already correct at the default of 0%.
  17. Click Save

To add Tasnim’s personally owned life insurance:

  1. Click Policy again in the right hand corner
  2. Enter a Description for Tasnim’s personally owned life insurance.
  3. Set the Account Type and Regulatory Type to Insurance Policy
  4. Ensure that the Ownership is set to 100% for Tasnim Kaliq.
  5. Here you can enter the Payment Mode of Monthly, and the Payment Amount of $120.00
  6. Click Save
  7. Tasnim’s Personal Life Policy should now appear on the summary screen. Click Coverage beside it to add value to the policy.
  8. Enter a new Description and set the Type to Whole Life.
  9. The Insured is Tasnim, and the Death Benefit is $20,000.
  10. After setting estate as the Beneficiary in the drop-down menu, click Save
  11. Tasnim’s Disability Policy should now appear on the summary screen. Click Coverage beside it to add value to the policy.
  12. Enter a new Description and set the Type to Disability (Personal).
  13. The Insured is Tasnim Kaliq, and the Lump Sum Benefits are $20,000.
  14. For the 1st Year enter 100% so all of the policy will pay out at once.
  15. Uncheck the Taxable Benefits checkbox, since they are not taxable when paid.
  16. The Index Rate is already correct at the default of 0%.
  17. Click Save

To add Karim’s 5-Year Term Insurance:

  1. Click Policy again in the right hand corner
  2. Enter a Description for Karim’s conventional term insurance.
  3. Set the Account Type and Regulatory Type to Insurance Policy
  4. Ensure that the Ownership is set to 100% for Karim Shadeed.
  5. Here you can enter the Payment Mode as Annual, and the Payment Amount is $1,600
  6. Click Save
  7. Karim’s Term Insurance should now appear on the summary screen. Click Coverage beside it to add value to the policy.
  8. Enter a new Description and set the Type to Term Life.
  9. The Insured is Karim Shadeed, and the Death Benefit is $40,000.
  10. After setting estate as the Beneficiary in the drop-down menu, click Save
  11. You can also add Karim’s term takaful coverage under the same policy. Click Coverage beside Karim’s Disability policy to add value.
  12. Enter a new Description and set the Type to Disability (Personal).
  13. The Insured is Karim, and the Lump Sum Benefits are $40,000 as was previously revealed.
  14. For the 1st Year enter 25%.
  15. The 2nd Year was 25% also.
  16. The 3rd Year pays out the remaining 50%.
  17. Uncheck the Taxable Benefits checkbox, since they are not taxable when paid.
  18. The Index Rate should be set this time to 4.0%.
  19. Click Save
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