Book for Insurance Planning – CFP
Posted by Prashant Shah on September 21, 2012
A fantastic book on Insurance written by CII UK. Finely Indianised and a must read for those who are learning Insurance as a subject for strong foundation. Equally useful for CFP exam. The only thing which is not covered in this book are the numerical on the subject which will be published soon on the site.
Click to download:IC-33 text book 2011
Note: This book has been provided to help students to understand insurance and for awareness of people. I don’t claim any ownership of the book. It is a copyrighted material of CII which I downloaded from the website.
The Chartered Insurance Institute (CII) is the premier professional organisation for those working in the insurance and financial services industry. It is dedicated to promoting higher standards of competence and integrity through the provision of relevant qualifications for employees at all levels and across all sectors, and has been at the forefront in setting professional standards for the insurance industry for over a century.
PVS (Prashant V Shah) 
deepak said
Hi prashant,
Please suggest the suitable book for general insurance. I heard from one guy that today’s insurance paper was a bit tough. It was as per new pattern. Mostly numericals.
aishwarya surana said
hi sir,
please suggest me suitable books for risk analysis and insurance planning module. speacially for numericals….i appeared for this module but failed coz the numericals were tough.
Prashant Shah said
Dear Aishwarya,
For life insurance you can use IC33 book which is already uploaded on this site. Finding proper material for general insurance is a challenge but you can use any education provider’s book or IC34 for the same.
Regards,
Prashant V Shah.
vikas said
@prashant i cudnt clear the insurance paper….i feel after syllabus change the xam has grown difficult specially the numericals….can u suggest sum material or help with numericals??
R Varadarajan said
Dear Prashantji,
I could not find any Practice questions in respect of the Insurance Module. Is it some where else in the blog and I have missed. I shall be obliged to have your advise please as I am planning to appear for the same within a fortnight and shall be
Prashant Shah said
It is there under insurance segment.
Prashant.
R Varadarajan said
Dear Prashantji,
There are ” Practice Questions” in respect of the other modules whereas there is none under Insurance. This is the one I have been looking for so that I can solve the problems and get some practice. Shall be grateful to receive your quick response.
R Varadarajan
R Varadarajan said
Dear Prashanji/Manish/Vinayak,
Can some one suggest some Practice Questions & Answers for Insurance Planning. Your early response would be appreciated.
Varadarajan
Manish said
Dear R Varadarajan i have a huge question bank of insurance planning module moreover i tried to find the same on scribd.com so that i can provide you the link for your practise but regret to say that i could not find any papers other than iifp which i think is less useful compare to fpa papers.however i am sharing some important questions here so that you can use it for ur further practise:-
1.]Calculate age nearer birthday, age last birthday & age next birthday based on following
data: DOP is 22nd March 2003 and DOB is 8th June 1950.
(a) Age nearer birthday is 53, age next birthday 53 and age last birthday 52
(b) Age nearer birthday is 54, age next birthday 54 and age last birthday 53
(c) Age nearer birthday is 52, age next birthday 52 and age last birthday 51
(d) None of the above
2.]Calculate IP if SA is 30,000/-, TP is 68.70, Mode is Yearly, Rebate for Yearly mode is
1.5% and Rebate for SA above Rs. 4,000/- is Re/- 1/- per thousand.
(a) 2025
(b) 1985
(c) 2000
(d) 1995
3.]Calculate installment premium if SA is 25,000 with DAB, TP is 36.55, Premium for
DAB is Re. 1/- per thousand, Mode is Half-yearly, Rebate for Half-yearly mode is 1.5%,
and Rebate for SA above 4,000/- is Re. 1/- per thousand.
(a) 400
(b) 450
(c) 500
(d) 475
4.]Calculate Yearly premium if DOP is 3 3 2003, DOB is 28 6 1974, proposal is to be
backdated by 3 months, SA is 50,000/-, TP is 27.46 (age 27), 27.83 (age 28), 28.37 (age
29), YLY Mode Rebate is 1.50 and If SA is 50,000/- or more.
(a) 1241
(b) 1242
(c) 1250
(d) None
5.]Calculate HLY premium if SA is 1,00,000/-, DOB is 28 6 1974, DOP is 20 12 2002,
TP for age nearer BD 27 is 27.46, for 28 it is 27.83 and for age 29 it is 28.37. Rebate for
HLY is 1/- and rebate for SA 50,000/- and above is 1.50
(a) 1266.5
(b) 1246.5
(c) 1293.5
(d) None of the above
6.]Calculate Paid up value with the help of the following data: SA is 4,000/-; Plan &
Term is Endowment for 20 years; DOC is 1st January 1995; LUP is 1st January 1998 and
Mode of payment is Quarterly.
(a) Rs.3000
(b) Rs.1500
(c) Rs.2500
(d) Nil
7.]Find out SV if DOS is 5 – 4 – 2003, Plan & Term is Endowment for 31 years, SA is
40,000/-, due date of the LPP (H) is 25 – 9 – 2001, DOC is 25 – 9 – 1986, VB after
valuation as on 31 – 3 – 2001 is 34,000/- and SV factors for various durations are 22% for
(a) 11,000
(b) 13,500
(c) 16,200
(d) 9,250
8.]Calculate SV if DOS is 5 – 4 – 2003, Plan & Tern are Endowment for 31 years, Sa is
40,000/-, LPP (H) is 25 – 9 – 2001, DOC is 25 – 9 – 1986, VB is Nil and SV factors for
various durations are 22% for 14 years, 25% for 15 years and 30% for 16 years
(a) 4,400/-
(b) 6,000/-
(c) 5,000/-
(d) 5,500/-
9.]Calculate Loan Value if Plan & Term are Endowment for 31 years, SA is 40,000/-,
DOC is 25 – 9 – 1986, Mode is HLY, IP due in September 2001 has been paid, VB as on
31 – 3 – 2001 is 34,000/-, SV factors for various durations are 22% for 14 years, 25% for
1
(a) 13,500/-
(b) 16,006/-
(c) 13,339/-
(d) 14,580/-
10.]Find out the claim amount to be paid if DOD is 18 – 2 – 2002, DOC is 20 – 7 – 1989,
LUP (Q) is 20 – 1 – 2002, IP is 320/-, SA is 40,000/-, VB is 30,000/- and IB is 70 per
thousand as per Valuation as o 31 – 3 – 2001.
(a) Rs.50,000
(b) Rs.69,360
(c) Rs.72,160
(d) Rs.52,800
11.]Find out the claim amount payable if DOD is 18 – 2 – 2003, DOC is 20 – 5 – 1989,
LPP (Q) is 20 – 2 – 2003 paid on 6 – 2 – 2003, IP is 300/-, SA is 50,000/-, VB is 36,000/-
and IB as per Valuation as on 31 – 3 – 2002 is 68/- per thousand.
(a) 89,700/-
(b) 86,300/-
(c) 86,000/-
(d) 89,400/-.hope these questions help u.All these questions are calculative sums as i think you can crack theory questions by understading the concept. if i recall anything i have shared some of these questions to vinayak for his help in solving them so i suggest you to check the comments of insurance segment for more clarity.
Manish said
the keys for the above questions are as follows:-
1.]a
2.]b
3.]b
4.]d
5.]c
6.]b
7.]c
8.]b
9.]d
10.]c
11.]c.the answers are according to papers some of the answers in the bank are incorrect so check it with ur calculations.
R Varadarajan said
Many thanks Manish. These will surely help. If you can find the link in scribd.com, please inform. Let me also try that site
sonam said
Hi Prashant ji,
Can you please tell the difference between insurance on Market and reinstatement basis with the help of examples. How are the claims settled?
Prashant Shah said
Dear Sonam,
Regret for late reply
Sum Insured:
1. Property can be insured on depreciated cost (market value) or replacement cost basis. In order to get better protection, insurance on reinstatement (replacement) basis is recommended. The sum insured selected should be adequate for reinstatement.
2. In case the value of a property may increase due to factors like increase in prime cost, Exchange rate etc. during the currency of the policy, the corresponding sum insured may be increased up to 25% maximum by opting for the ‘Escalation Extension’.
3. Similarly, any reduction in sum insured during currency may be effected for which refund of premium will be allowed on short period basis.
I request you to read further on http://www.orientalinsurance.org.in/Standard-fire-special-perils-policy.html
Regards,
Prashant V Shah.
Jasbir singh said
Dear sonam,
I don’t know about insurance on market, but reinstatement of policy is related to renewal of policy. When the policy lapses it benefits neither insurer nor the insured because at higher age insured have to pay high premium on the same amount of S.A.. and for insurance company the level of premium is based on the ratio of death claims in that particular age group and the expenses at the initial stage is high the insurer can recover them only if policy remain in force. For this reason insurance companies gives chance to policy holder to revive the policy by paying interest on due premiums and disclosing health information.
For e.g. suppose X took insurance policy of S.A.100,000Rs with term 20years and paid 5000rs/year as premium till next 4 Years and after that due to financial loss could not pay 6th premium within grace period and policy gets terminated/lapse. Now if he dies then his nominee will be paid only paid up value of policy not S.A. (100,000*5/20) which will be 25000Rs. This has affected his sum assured which could be 100,000Rs, just assume that if he would have revive the policy before death by following each steps then his nominee would have got 100,000Rs.
Prashant Shah said
Dear Jasbir,
Your illustration is perfect but it is more of revival. At times revival and reistatement are used interchangeably but the reistatement clause is used more in general insurance (if I am not wrong).
Invite comments of others for the same as it is more often asked in exam.
Regards,
Prashant.
Jasbir singh said
Now I got the idea of different between insurance on market and reinstatement… thanx to sonam for raising the question
sonia said
Dear Prashant,
I like you post and hence posting a question from the sample paper of RAIP.
Q1 A businessman bought a piece of land in March, 2002 for Rs. 80 lakh. He got a factory built on the land at a cost of Rs. 90 lakh, the factory became operational on 1st
September, 2005. The land prices have appreciated at 15% per annum in the period and the construction cost has escalated at 12% per annum since 2005. At what
value the factory should be insured in April, 2013 on Market Value basis if the depreciation on factory premises is charged at 6% per annum on straight line method?
Answer of FPSB website
Cost of land in 2002 8,000,000 Rs.
Cost of construction in 2005 9,000,000 Rs.
Cost escalation 12% p.a.
Cost of construction in 2013 22,283,669 (9000000*(1+12%)^8_
Depreciation rate (on SLM method)- 8 years 6% p.a.
Therefore, sum insured on market value basis 11,587,508 Rs. 22283669*(1-8*6%)
My query: Why the depreciation is calculated in all the solutions provided by FPSB on appreciated cost of asset, the deprectaion is normally calculated on the original cost of the asset. So, in this case the answer according to me should be
Depreciation = 4680000 (90,00,000*(1-8*6%)
Hence, Sum Insured = 22,283,669 – 4680000 = 17603668.59
Please suggest if I am wrong. This answer does not match with the options provided. Please give the reasoning if the FPSB answer is correct.
Waiting for your early reponse.
Regards,
Sonia
Abhijit Das said
Hi All,
Thanks a lot for your posts which really helps a novice like me.
I am planning to appear for insurance module by end of june and have heard that the question pattern is no longer similar to the earlier ones. Also there has been feedback that questions are tougher than the sample papers provided by fpsb.Earlier there used to be considerable problems from TVM which doesnot seem to be the case anymore. Request guidance on how to prepare for this paper pls.
Appreciate all your help here.
Regards
Abhijit
Prashant Shah said
Dear Abhijit,
You can look at the curriculum provided by FPSB and search relevant topics. I am almost done with compilation and same will be posted soon. You can also refer to the sample papers provided by FPSB.
Feel free to ask queries.
Prashant.
Ankit Pareek said
I had recently appeared for the RAIP module and could not get through because the numericals part in the exam are way too tough which need a lot of time to get the correct answer but due to time constraints and lack of practice as there is no proper question bank for NUMERICALS available in the market. I would be highly thankful if anyone could help me on this. ( suggestion for book of numericals as per FPSB)
Regards,
Ankit Pareek
Prashant Shah said
Dear Ankit,
I believe life insurance is not troubling much but general insurance, especially claim on market value basis may be the concern.
I will be posting different aspects for the same but it may take time because of the heavy schedule.
I will try to post is asap but meanwhile you can refer to the websites of general insurance companies for better help.
Frankly there is no hope of getting any question bank from anyone.
Regards,
Prashant.
Harry said
Dear Prashant,
Can you please share some sample questions here or refer some website where we can find the new questions of RAIP.
Regards
Harry
Prashant Shah said
Dear Harry,
We have had many question banks of RAIP namely of FPA, IMS but with new style I feel that they are of least use hence we may have to rely only on the sample questions published by FPSB.
Regards,
Prashant.
Harry said
Ankit, can you please share in this forum, what kind of questions came from Module 1″ Introduction to Financial Planning” what all questions came numericals from General Insurance, how was the theory part etc.. please share with the forum,
vishal said
can you sent some question of insurance as per new cfp syallabus
Mayuri Singh said
sir i have appeared for the raip module twice but could not clear. I can get trough the sums but finding bit difficulty while doing theory ,can u please suggest me referal books and suggestions to pass through the raip module.