CMFAS RES5 Advisory Process & Skills question: multiple for death and total permanent disability

CMFAS RES5Advisory Process & Skills

A client earns $80,000 a year. His only existing death cover is $300,000 of group term insurance through his employer plus $70,000 under the Dependants' Protection Scheme. Using the Basic Financial Planning Guide multiple for death and total permanent disability, the shortfall the representative should plan for is approximately:

A $720,000
B $350,000
C $370,000
D $1,090,000

Show the answer and explanation

Answer: B. $350,000

Total required = 9 × annual income = 9 × $80,000 = $720,000. Existing provision = $300,000 group term + $70,000 DPS = $370,000. Shortfall = $720,000 − $370,000 = $350,000. Fact-finding quantifies each need as total required, existing provision, and the resulting shortfall.

Common mistake

Use the 9× multiple for death/TPD (not 4×), and net off the existing $370,000; group term cover should be flagged because it ends when the client leaves the employer.

Practise more RES5 Advisory Process & Skills questions

Exam-style questions with worked answers, then full timed mocks. Free to start.

Start practising →

Study note: Advisory Process & Skills CMFAS RES5practice questions & mock exams

Related CMFAS RES5 questions

A married client with two young children has an outstanding $400,000 home mortgage but only minimal life cover. He asks the representative to start an investment-linked policy for wealth accumulation. With a limited monthly budget, the representative should A client purchases an investment-linked policy (ILP) and later exercises the 14-day free-look. Regarding the amount refunded, the representative must have disclosed that A key reason to review a client's existing life insurance product is that many carry conversion options which are valuable because they

Build a daily practice habit — a few exam-style questions a day, with worked answers. Free to start.

Start practising →

Original study material mapped to the public CMFAS RES5 syllabus. Unofficial, not endorsed by MAS or SCI. Verify figures and rules against current guidance before relying on them.