1. Wealth Management Services
- Importance of wealth in securing life goals and financial stability.
- Bank partnership with leading investment and insurance providers to offer varied products to customers.
2. Life Insurance
A contract between the insurer and the insured that guarantees financial payment to beneficiaries in case of death.
2.2 Human Life Value (HLV) Concept:
- Life viewed as an economic asset.
- Key calculation factors:
- Net future earnings (income minus personal expenses).
- Economic loss suffered by family in case of premature death.
- HLV Formula Example:
- Earnings after personal expense = ₹4,00,000/year.
- Discount rate = 8%.
- HLV = ₹50,00,000 (calculated as ₹4,00,000 / 0.08).
2.3 Life Insurance at Bank:
- Partnership with India First Life Insurance Company Ltd.
- Ownership Structure:
- Bank: 65%
- Union Bank of India: 9%
- Carmel Point Investments: 26%
- Key Products:
| Plan Name | Plan Type | Key Features |
|---|---|---|
| MahaJeevan Plan | Traditional Non-Linked | Death and maturity benefits |
| Life Cash Back Plan | Guaranteed Survival | Guaranteed survival benefits |
| Wealth Maximizer Plan | Unit-Linked | Three investment strategies |
| Life Money Balance Plan | Market-Linked | Market-linked returns with trigger-based investments |
| Term Plan | Term | High death coverage at economical rates |
| Group Plans | Group | Tailored for employers to secure their workforce and loan-linked liabilities |
3. Standalone Health Insurance
- Provides financial security during health emergencies and protects savings.
- Covers hospitalization, long-term care, personal accident, and travel expenses.
Health Insurance at Bank :
| Insurance Partner | Health Insurance Products |
|---|---|
| Niva Bupa Health Insurance Co. Ltd | – Group Health Plans – Health Recharge Top-Up Plans – Family Floater options |
| Star Health & Allied Insurance Co. Ltd | – Family Health Optima – Cardiac Care Plan – Cancer Care Gold |
4. General Insurance
- Covers property (fire, burglary), personal accident, liabilities (motor, workmen’s compensation), and health.
- Ensures protection against unforeseen damages or losses due to natural disasters, theft, and accidents.
Insurance Offerings at Bank:
| Insurance Provider | Insurance Offerings |
|---|---|
| National Insurance Company Ltd | – Policies for burglary (सेंध) – Motor insurance – Mediclaim |
| Tata AIG Insurance | – Mediprime (no sub-limits on medical expenses) – SME Protect |
| Chola MS General Insurance | – Health insurance – Fire insurance – Burglary insurance – Packaged insurance for families and businesses |
5. Mutual Funds
- A financial instrument pooling investments from individuals to invest in equities, bonds, and securities.
5.2 Benefits of Mutual Funds:
- Professional fund management.
- Diversification to minimize risks.
- Enhanced financial gains above inflation rates.
5.3 Regulation and Compliance:
- Governed by SEBI.
- Bank employees must obtain NISM certification and register with AMFI.
5.4 Mutual Fund Offerings by Bank:
- Partners with 21 Asset Management Companies (AMCs).
- Example Partners:
- Aditya Birla Sunlife, SBI, Kotak, Axis, Mirae Asset, and Franklin Templeton.
MCQ
1. Wealth Management Services
Q1. What is the primary purpose of wealth management services offered by Bank?
A) To sell standalone products
B) To provide financial security and meet clients’ financial goals
C) To offer a single product for all customers
D) To compete with private insurance companies
Answer: B
2. Life Insurance
Q2. What does the Human Life Value (HLV) concept primarily consider?
A) Premium paid annually
B) The future economic loss of the family
C) The annual insurance company profits
D) The lifetime expenses of an individual
Answer: B
Q3. What is the formula to calculate HLV?
A) Annual expenses / interest rate
B) Annual net earnings / rate of interest
C) Annual income * total liabilities
D) Premium amount / claim period
Answer: B
Q4. IndiaFirst MahaJeevan Plan offers which benefit?
A) Market-linked returns
B) Periodic cash-back payments
C) Guaranteed death and maturity benefits
D) Critical illness coverage
Answer: C
3. Standalone Health Insurance
Q5. Which two companies partner with Bank for standalone health insurance?
A) Tata AIG and Niva Bupa
B) Niva Bupa and Star Health
C) Star Health and National Insurance
D) Tata AIG and Chola MS
Answer: B
Q6. The purpose of health insurance is to:
A) Pay for an individual’s loans
B) Safeguard savings and provide financial assistance during medical emergencies
C) Earn interest on policy investments
D) Cover personal accidents only
Answer: B
Q7. Which product offered by Star Health specializes in pre-existing health conditions like diabetes?
A) Star Medi-Classic
B) Star Family Health Optima
C) Star Diabetes Safe Plan
D) Cancer Care Gold
Answer: C
4. General Insurance
Q8. What is a critical guideline for insuring property under general insurance?
A) Over-insure the property to get higher claims
B) Insure the property for its actual value
C) Use multiple insurers for the same property
D) Only insure properties financed by loans
Answer: B
Q9. Tata AIG’s Travel Guard policy provides coverage for:
A) Critical illnesses
B) Accidental death
C) Unforeseen contingencies during international travel
D) Legal disputes over insurance
Answer: C
5. Mutual Funds
Q10. Mutual funds are primarily regulated by which authority in India?
A) AMFI
B) SEBI
C) RBI
D) IRDAI
Answer: B
Q11. What are the two certifications required for selling mutual funds?
A) SEBI certification and IRDA registration
B) AMFI certification and IRDA license
C) NISM certification and AMFI Registration Number (ARN)
D) NISM certification and RBI approval
Answer: C
Q12. A unique feature of mutual funds is that they:
A) Require a high minimum investment
B) Allow professional management of pooled funds
C) Only invest in government bonds
D) Guarantee fixed returns annually
Answer: B
Miscellaneous
Q13. In case a property is insured for less than its actual value, the insured will:
A) Get claims equal to the full loss incurred
B) Pay double the premium next time
C) Receive proportionate compensation based on the insured amount
D) Have to reapply for insurance coverage
Answer: C
Q14. The IndiaFirst Life Guarantee of Life Dreams (GOLD) Plan offers:
A) A lifetime income option with no life cover
B) Short-term premium payment and regular income for 30-40 years
C) Unit-linked investment strategies
D) High sum insured with low premiums
Answer: B