Question Bank on Financial Planning & Wealth

Management
(September, 2010)

1. What is the difference between “Financial Planning” and “Wealth

Management”?

2. Financial Planning is required for everyone, irrespective of one’s

age, educational background or family status. Effective Financial
Planning can lead to one’s financial wellbeing and ultimate financial
security in life. What is your opinion on this?

3. What are the various components of Financial Planning?

4. What do you mean by personal budgeting? “It is not income, but

spending habits, which makes one rich” – Comment.

5. What do you mean by the statement “Pay yourself first” in the

context of saving and spending habits.

6. What are the financial rules of thumb relating to: (a) Educational
Loan (b) Car Loan and (c) Housing Loan?

7. What do you mean by the statement “Insurance is a subject matter

of solicitation”?

8. What is the difference between “Insurance” and “Assurance”?

9. What are the different types of insurance covers you know of? What
is the basic difference between life insurance and general
insurance? Which Insurance company has maximum market share
in life insurance market in India? Who is the regulator of insurance
sector in India? What do you mean by re-insurance? How insurance
premium for a policy is determined?

10. What do you mean by (a) Term Insurance? (b) Family Floater? (c)
Domiciliary Hospitalisation? (d) Marine Insurance? (e) The Principle
of Contribution (f) The Principle of Subrogation (g) Insurance has to
weed out the theory of adverse selection (h) All life insurance
policies include incontestability clause (i) Whole life policy (j) Pure
Endowment policy (k) ULIP (l) Group Life Insurance (m) Deferred
Medi claim Policy (n) Overseas Medical Cover (o) Cash-less
Reimbursement and Third Party Administrators (TPAs) (p) Cancer
Insurance (q) Long Term Care Insurance (r ) Motor(car) Insurance
 (s) Third party Insurance (t) Property Insurance (u) Household goods
insurance

11. How much life insurance one needs? How would you arrive at a
figure for this?

12. What do you mean by the words “Mutual” and “Funds” in

“Mutual Fund”? Write at least 3 major advantages and
disadvantages of a Mutual Fund.

13. What do you mean by : (a) AMFI (b) AMC (c) NAV (d) Fund of Funds
(e) Liquid Fund (f) Open-ended Fund (g) Primary market Fund (h)
Gilt Fund (i) Sectoral Fund (k) Index Fund (l) Equity Linked Saving
Schemes (ELSS) (m) Real Estate Mutual Fund

14. Why it is called that “Mutual Funds are subject to Market Risks”?

15. Who is the regulator of (a) Mutual Funds? (b) AMCs? (c)
Money Market Mutual Funds? (d) Gilt Funds? (e) ULIP?