Loading…
CMFASPrepStudyingRES5
Switch exam
Financial advisory
RES5Financial Advisory Services✓A DB4 (higher of value of units or sum assured) ILP has a sum assured of S$50,000 while the value of the units has grown to S$62,000. The annual cost of life cover is S$4.00 per S$1,000. What is the monthly mortality charge?
Under DB4 the mortality charge applies to the sum at risk (v - u) only when v > u. Here v = S$50,000 and u = S$62,000, so v < u and the charge is zero — the units alone already exceed the sum assured, leaving no sum at risk.
Charging the full sum assured on a DB3 basis gives (S$4/1,000/12) x S$50,000 = S$16.67; forgetting to divide by 12 gives S$200; charging the excess of units over sum assured (S$12,000) gives S$4.00. When units exceed the sum assured, DB4 charges nothing.
Practise more M9 Participating Policies & ILPs questions
Exam-style questions with worked answers, then full timed mocks. Free to start.
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 M9 syllabus. Unofficial, not endorsed by MAS or SCI. Verify figures and rules against current guidance before relying on them.