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?