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submitted by Shivani (5 m) on 14 Apr 2011 09:42:25 IST
Insurance is the most ignored aspect of our financial plan. While investments are the kings of our financial plan, insurance is often overlooked by both the investor and financial planner. Some investors don't understand the importance of insurance, other investors are confused between the various complicated insurance products available in the market.No individual or business is immune to risks and liabilities. Insuring yourself and your valuables is therefore a wise and necessary decision to safeguard your liabilities in the event of an unpleasant occurrence to you, your assets and business or to the clients who have invested with you.Today General Insurance s
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The tax season is just round the corner! And there are too many tax saving options available broadly categorized under two heads: one equity and two debt products! There is your financial consultant but more often than not he might suggest only those products that will get him the highest commission! Obviously you are confused! How about analyzing the right tax saving product for you? Want to know how? Read on.To begin with ask yourself these two questions: your risk tolerance level and what stage in life you are in. But why should you do it in the first place?Importance of finding your risk profileFinding answer to this question can lead you to the right tax
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submitted by Amit Kumar (28 m) on 31 Jan 2011 16:09:06 IST
There has been a long debate on unit-linked insurance plans (Ulips) recently, but consumers find that many questions continue to remain unanswered. Meanwhile, the sale of traditional products has increased significantly despite the fact that Ulips are far more transparent today.So how do you know if a Ulip works for you, and if it does, which type is suited to your needs? There are two broad categories of Ulips, which are defined by the death benefits they offer. The Type 1 Ulip provides benefits that are higher of the cover or the accumulated fund value.The Type 2 Ulip offers death benefits that include both the cover and the accumulated fund value. It is important
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Don’t get baffled by the policies that health & life insurers offer. Here’s how you can identify the plan best suited for you. Medical costs are ballooning by the day — even a minor surgery can cost you anywhere between Rs 20,000 and Rs 50,000. Similarly, a cardiac treatment can set you back by Rs 5 lakh, depending upon the city and the hospital you choose. Save, invest, do whatever you want — there can be no dispute over the need for mediclaim to offset the impact of rising healthcare costs.Given the plethora of options in the health insurance space, it is difficult to make a rational choice. With life insurance companies entering
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submitted by Amit Kumar (28 m) on 24 Jan 2011 15:53:27 IST
Janani and Ajay, both in their early twenties, have just begun enjoying the perks of financial freedom. But their respective parents want them to develop a savings habit early into their careers. While Janani's father wants her to buy a traditional life insurance, covering a major part of her salary surplus, Ajay's father wants him to pre-pay his education loan at the earliest. Though both parents are right in emphasising the importance of savings, their suggestions may not really be the best thing. Here's a brief guideline on how first-time earners can deploy their monthly surpluses effectively.Insurance: It is not uncommon for first-time earners to buy
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submitted by Amit Kumar (28 m) on 20 Jan 2011 16:43:26 IST
Asset management firms continue to offer standard investment products such as fixed maturity plans, equity funds and, now, passive products on foreign indices. Investors do not always understand how to effectively utilise these products to create an optimal portfolio. Most do not seek professional investment advice either. The question is: Can asset management firms bridge the knowledge gap and channel investor resources optimally?This article explains why asset management firms should offer investment solutions and not just products. It also explains how such solutions can be structured to improve investment experience for the end-users.Asset management firms typic
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submitted by Amit Kumar (28 m) on 14 Jan 2011 15:53:36 IST
The expectation of life at birth increased by six years for men and eight years for women between 1990 and 2008. Since mortality rates dipped most in infancy and early childhood, the increase in expectation of life for young adults was more modest, in the range of 2-4 years. Sharp drop Despite this apparently small increase, it turns out that there has been a sharp drop in the probability of dying between the ages of 20/30 and 60. For men, the probability of dying between the age of 20 and 59, before life insurance cover runs out, has dropped from 1 in 3 in 1990 to almost 1 in 4 in 2008. There has been a corresponding drop in the probabil
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submitted by Amit Kumar (28 m) on 12 Jan 2011 07:38:40 IST
It is easier to strike a chord with parents by talking about insulating their children’s future from any undesirable events. Consequently, selling child plans is easier as well. Many parents, thus, are completely taken in by the idea of achieving their dream of their child being able to complete his/her education in their absence. In addition to the sum assured that is paid at the time of the policyholder’s demise, future premiums are waived off and the fund value is made available to the child on maturity. Riders providing for loss of income arising out of the parent’s (the insured) death or disability are also touted as one of th
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submitted by Amit Kumar (28 m) on 10 Jan 2011 16:00:32 IST
Most salary-earners believe that wealth-building is only for the ultra high-net-worth individuals. After all, doesn't money beget money? However, wealth creation is really not just for an exclusive club of ultra-rich individuals. Anyone can build wealth through planned investments over a long period of time. However, unless you have strategies in place you are leaving wealth creation to chance. The fact that ultra HNIs achieve higher returns than middle-income individuals owes a lot to their asset allocation pattern. There may be several strategies to build wealth. However, we draw on real-life examples to arrive at four basic tenets that will g
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submitted by Amit Kumar (28 m) on 5 Jan 2011 15:49:29 IST
The last week of 2010 revealed the shocking episode of a fraudulent Citibank employee who was enriching himself at the expense of the bank's clients. Right at the start of 2011 ask yourself if you and your hard earned money can avoid meeting a similar fate. Here we give you basic tips to help you protect your money this year from fraudsters and scamsters. Don't sign blank documents Whatever your bank's relationship manager or insurance agent might say, don't sign blank documents, cheques or forms. Anything you sign on is your responsibility. Filling out forms can take an extra few minutes, but you will be better off. Keep p
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Gautam Buddha once said, "Every human being is the author of his own health or disease." And nothing can be truer than this. We are the only ones who can control our health, no matter how hard we try to shun off this responsibility. So when it comes to our health, we do the best we can: avoid certain foods, exercise when we can and try to change the lifestyles that we lead. And the one thing we often take for granted is insurance. Now at this point you must be thinking: I already have life insurance. Why would I need one for my health? This is a folly that most people make. Having life insurance is not the same as having medical or health insurance.I
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submitted by Amit Kumar (28 m) on 27 Dec 2010 16:07:52 IST
A late, leisurely breakfast of aaloo paranthas is a rare treat. So when the strident doorbell interrupted my feast, I was reluctant to greet the guest. Turns out, there were other, more compelling reasons to be unenthusiastic. For on my door was Uncle K. Relatives can be a painful breed, nosy and pesky. If one of them turns out to be an insurance agent, the pain quotient shoots up. Uncle K has been an agent all his life, and the only time he visits is to sweet talk me into buying yet another policy. He got down to business right away. “You know, I have this new single-premium unit linked insurance plan. As you must be aware, Ulips are in
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submitted by Amit Kumar (28 m) on 22 Dec 2010 14:56:28 IST
Splitting your term plan with variable tenures will help. The competition between life insurance companies is driving down term-insurance premiums. In the past two years, premiums from existing players have come down at least 30 per cent. But from a consumer’s perspective, there is room for further reduction. Term plans can be bought in a structured manner, to ensure that an individual pays less premium without any reduction in his insurance cover. GAIN THE MOST FROM MULTIPLE POLICIES Buy when young to maximise benefits Ensure steady build-up of assets
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If you have a health insurance policy, you might be aware that it covers certain diseases only after a waiting period of four claim-free years. But do you know that conditions related to genetic disorders are not covered at all? And that claims relating to certain self-inflicted ailments-like cirrhosis of the liver due to excessive intake of alcohol, lung and throat cancer due to tobacco use, and HIV-can also be rejected by the insurance company. All this is explicitly stated in the policy terms and conditions but buyers seldom go through the fine print. Even the agent will not disclose these intricate features of the policy for fear of losing business.
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submitted by Amit Kumar (28 m) on 17 Dec 2010 16:06:25 IST
A travel policy is not enough as most domestic ones do not provide health cover. Fifty-year-old Manju Prasad is busy packing for her week-long leisure trip to Shimla, planned during the end of this month. And, she believes she should have travel insurance, going by her and her friends’ and relatives’ past experiences. “But my husband insists that I first get a health cover,” laments the Indore resident. “Even travel insurance policies cover some health risks. Then, why should I buy a health cover unnecessarily?” asks Prasad.Typically, domestic travel insurance policies provide accidental death and disability benefi
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submitted by Amit Kumar (28 m) on 13 Dec 2010 15:51:55 IST
It’s not uncommon for an individual to be covered by two, or even three, health insurance policies. One reason for this is the rise in the cost of health-care services in the past decade. Ten years ago, a Rs 2-lakh health insurance cover was considered fairly sufficient for an entire family. Today, it will barely be enough to pay for a five-day stay in a hospital. Also, medical insurance cover from employers is not sufficient. In both circumstances, one has to buy another policy. But while a larger insurance cover is a good thing, multiple health insurance policies can lead to confusion when making a claim. Should a person claim onl
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Many of us are often unable to continue to pay the premium towards our life insurance policy. Whether its because we were careless and forgot, or because we don't see value in continuing with the policy, or we are in a financial crisis and can't afford it any further, our inability to pay the premium due can result in the policy lapsing. As a result our life insurance coverage ceases to exist. This situation can be dangerous because if something happens to you, your financial dependants/beneficiaries might not get any benefit, which was the reason for you to get the insurance policy in the first place. Here are some basics on policy lapsation and reviv
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For most of us, inflation only conjures up images of sky-rocketing onion or milk prices that can throw the household budget into disarray. But have you thought about the serious damage that inflation can inflict upon your long-term wealth? Even a small but sustained increase in inflation rates can completely wreck your carefully constructed plans for buying a home, funding your daughter's engineering degree or even living it up after retirement (See table). Prepare for 8 per cent The risk of inflation upsetting your financial plans is not theoretical; it is very real, for two reasons. One, inflation in India is usually discussed in terms of the
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Today senior citizens are at a loss on how to continue paying increasing premiums as they age and need for health coverage alos increases. While health insurers are always pleading for increasing premiums as per their claim v/s premium records, they should also understand the decreasing incomes as the clients age.I strongly feel that health insurance policies should be structured similar to term and life insurance policies with FIXED PREMIUMS over the total duration of the policy. Even better, stoppage of premiums post retirement or fixed age (say 60/65 yeras) but coverage continuing for life. Any body listening in the insurance world?
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A comparison of hospitalisation cash and pure medical insurance plans. Having a health insurance is necessary. But it does not always cover your entire expense. The fine print elucidates limited reimbursement of hospital room rent, medicines and doctor’s fees. Also, at times, insurance companies reimburse on the basis of standard charges of the hospital and not the bill amount. To get rid of these uncertainties, some life insurers have come up with plans that offer fixed cash for different illnesses and surgeries. The payment is made irrespective of the actual bill. For example, if you undergo a bypass surgery and the fixed cash pay
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