– PROF. SUDINDRA V R

This case study developed based on hypothetical life events of Mr. Subash. This case will serve as a reference for the practical application of insurance as a risk management tool for various life events of an individual.  Every part of our life risk is inherent and effective management of risk is most essential. Risks can be manage through various methods: 1. Risk control: steps taken to minimize risk, 2. Risk avoidance: risk eliminated by avoiding the risk altogether 3. Risk retention: deciding to simply accept and pay for any loss himself/herself and 4. Risk transfer: where through contract, the risk is transfer to another party.

Life events of Mr. Subash:

• Mr. Subash lives in Chandigarh and studies B.Com at Punjab University in the year 1977 by taking an education loan.  He was a part of NCC and active player in Cricket participated in various tournaments. He was graduate in the year 1980 at the age of 21, with a B.Com.
• Upon graduating, he found a job in the field of relationship Management and joined the reputed company: ABC Ltd as Relationship Manager at Amritsar, Punjab location. After 3 years with the firm, he transferred to their Gandhinagar, Gujrath branch as a Senior Relationship Manager. He leases a flat in the high-end area and moves in.
• Mr. Subash was an avid cricket player, continued to playing after gaining employment and now plays for his company as well as club in Gandhinagar, Gujrat. He often get injuries during the match or practice session to the office.
• 1985 he married Ms. Lakshmi who lives in Nagpur. Graduated from Mumbai University in 1980 at the age of 20 in Commerce discipline.  She is into hobby trekking and continued as a professional trainer.
• In 1986, they decided to move to new house in posh area and spends Rs. 1, 25,000 on household expenses with the borrowed a money from a prestigious bank. In the same year their son Rakesh was born.  Ms. Lakshmi takes a break from professional training job to bring up the son.
• 1987, he was transferred to Hyderabad with the same company with and during the time Rakesh was hospitalised due to ill health  and it took Rs. 70,000 as hospitalisation expense.
• In 1988 decided to start his own business and developed a transportation business. He borrowed Rs. 3, 00,000 to finance his business. Because of tremendous contacts, he made good progress in business initially and subsequently made huge losses and planned to close down business.
• In 1990, their son started education in one of the reputed international school, which cost Rs. 50,000 as donation.  As Lakshmi is a single girl child, their parents retired from private jobs both in laws expenses to be taken care by Mr. Subhash.
• In 1992, he shifted to XYZ Company as a Branch Manager in Hyderabad with good package and next year bought house by taking a loan of Rs. 7, 00,000 and paid advance money of Rs. 1, 00,000 out of his salary savings.
• 1995, he enrolled in the  Master of Business Administration by withdrawing all his Provident fund amount and the same year his father was hospitalised at the age of 65 and spent heavy amount on hospitalisation expenses and died in 1997.
• After his education, he shifted to Delhi and placed as a Senior Manager in Transportation Company.  During 2004 son started engineering education with reputed engineering college.
• In 2004, Subash got into teaching profession with Management institute and shifted to Jaipur institute of Management in 2006. 
• Rakesh did not take up the job after completing studied.  Rakesh started small company, which is into software development in 2008, after 4 years joined, HP a reputed Software Company in Bangalore, and married Vidya.  In 2012 relocated to Bangalore with son and completed his PhD in 2013. Mrs. Lakshmi undergone some medical treatment in the same year and he retires from job in 2016. 
• Rakesh got baby girl child and kid is healthy, due to old age of mother Mr. Subash has to take care of mother for life. After retirement, Mr. Subash is dependent on little savings

POSSIBLE STRATEGY:

Year	Significance event	Risk exposure	Possible risk Mitigation	Remarks
1977	Education loan  and sports activity	Injury, Loan commitment	Risk retention Risk  avoidance	* Participate in activities and accept the possible loss. * Not to involve in other activities
1980	Job and cricket playing continued	Personal death, loss of income, disability + medical expenses	Risk transfer	Life insurance (accident), medical insurance, income protection insurance.
1985	Marriage and both begin professional career	Personal death, professional liability, business liability	Risk transfer	Term insurance, professional indemnity insurance, medical insurance  (if not covered by employer)
1986	Son born + hospitalised , posh house and break from training of wife	Additional burden personal risk, posh house expenses	Risk control Risk Transfer	*Take care of infection * Property damage insurance/ householders insurance.
1988	Business started and shut down on early.	Business liability, loan/ liability	Risk transfer	Business insurance/ employee liability, protection against loan
1990	Sons education and in law expenses	Increased dependency- education and in law dependency	Risk transfer  Risk retention	* Insurance with savings/investment * Medical expenses for old aged
1992	House construction	Property risk/damage	Risk transfer	* Householder insurance
1995-2004	Son’s education and education for self, father’s hospitalization	Increased cost of fund and hospital expenses	Risk retention	* Retain risk and fund through own sources.
2013	Lakshmi falls ill	Personal risk	Risk control	* Screening and preventive measures
2016 later	Retirement	Retirement risk	Risk transfer Risk control	* Onetime payment towards retirement Insurance * Not to involve in any risky activities during retirement.