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Not starting a business with enough cash, known technically as being "undercapitalized", is probably second only to not researching your business concept as a major cause of small business failure. This outcome is usually the result of inadequate advance planning during the pre-launch phase. First and foremost you must estimate what your family expenses are and how you will assure that your business income is sufficient to pay them. You should sit down with your family and honestly discuss the minimum amount of money the household must have each month to provide security. Ask each member of the family to offer one or two areas where some expense can be red
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As the best selling product of most life insurance company, investment-linked policy is the most policy holders’ favorite insurance plan. You might or might not be informed that your investment-linked policy will likely to lapse in the future. The fact is that an investment-linked policy will probably lapse due to the following unforeseen circumstances:-High insurance charges – Insurance companies charge a natural premium on your investment-linked policy. When you are young, everything is available on low price. When you are getting older, the insurance charges will increase accordingly. And the amount is a shocking number when you reach age at 70 and ab
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Indemnity is the legal philosophy upon which the concept of most insurance policies rests. Indemnity is the protection from loss and damage claims filed by another person. For instance, the owner of an amusement park may have indemnity insurance to compensate visitors injured on his or her property. The eventual insurance payout would be enough to restore the injured person back to the financial state he or she was in before the accident, but nothing more. Only a legal complaint brought against the park owner could result in additional punitive damages. Indemnity insurance protects the holder from suffering financial loss due to a lawsuit.The principle behind indemn
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Variable Life Insurance is a special type of a Permanent Life Insurance policy in which both the death benefit and the cash value depend on the investment performance of the underlying assets, usually one or two investment accounts known as "separate accounts" or "sub-accounts" within the insurance company's portfolio. Sub-accounts are organized as special trusts for the benefit of the insured which are kept separate from the general account of the insurance company.Thus, this type of Life Insurance enables you to participate in several investment options simultaneously with targets your premiums and separate accounts. The number and types of
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Life insurance policies are long-term contracts and the benefits are more complicated as they are dependent on the happenings of some pre-defined insured events. The contingent nature of the benefits makes it all the more important to clearly define the beneficiaries. Nomination and assignment are the tools conferred upon the policyholders to effectively manage the benefits accruing under a life insurance policy.Nomination is a right that is given to the life insurance policyholder to appoint a person or persons to receive the benefit under the policy in case it becomes a death claim. Simply put, if a person who is insured dies, the person in whose favour the nomina
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Insurance companies shout themselves hoarse about fancy variants of policies that, incidentally, cost a fortune. At the other end, financial planners wax eloquent about the need to take pure risk life insurance. These term plans are no-frills, risk-only covers and are the cheapest form of life insurance. Planners recommend these because they take care of an individual's insurance needs at a low price and do not come bundled with investment.However, the premium rates on term insurance plans go up as the tenure of the policy increases. So, is there a way to reduce the premium outgo without compromising on the extent of the cover? Yes. Just split the level of cover
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When an insurance company starts formulating the interest rate and premium structure for a particular customer, then the most important aspect considered by them is the risk factor associated with the materialization of the hazard or damage or death. Hence, insurance risk is the most important aspect in the insurance sector. It is the risk factor which pushes the customers to access insurance because they want to hedge the future uncertain occurrence of the hazard or damage or loss through financial reimbursement from the insurance company.In order to evaluate the risks associated with the customer, the insurance company first gathers all the relevant information ab
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Health insurance is a contract between you and the insurers. It is intended to protect you and your dependents against any financial constraints that may take place because of a medical emergency. You should keep in mind some aspects while purchasing for an insurance cover.Firstly, you have to decide what you want to cover. Is it just critical illness or injuries, all hospitalization expenses or OPD expenses as well? To put it more simply, ask yourself if you get cover for both in-patient and out-patient costs. If it is just critical illness, find out which critical diseases are covered. This makes sense in case you have a family history of heart disease as most ins
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Insurance law regulations in India manage all the matters related to various insurance companies in the country. The concept of insurance in India dates back to the ancient period. The idea of getting anything insured gained its momentum from the overseas traders who used to practice marine insurance in somewhat crude form. Social insurance was the first of its kind which took shape in India. Since its introduction, the history of insurance in India has undergone many phases. Earlier, the insurance companies in India were privatized.Entry of private companies: A landmark decisionIn the later years, insurance companies were nationalized with the help of insurance law
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Moral hazard is a term that has to do with the actions and character of an individual and how those attributes may impact that the ability of a person to secure insurance protection. It covers different types of accidents, health issues, and other relevant types of coverage. Essentially, the moral hazard is the degree of risk that the insurance company is taking in order to provide coverage on the individual.The concept of moral hazard begins with the application for insurance coverage. This is a good understanding that the individual will be completely forthcoming about any factors that could negatively influence the decision to accept the application. For instance
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A good life insurance policy can protect you from financial difficulties and provides assurance that your loved ones will be taken care of in the event of any mishap. However, many a times people find it difficult to estimate the appropriate value of insurance they need.Your life insurance needs change through different stages of your life. When you are young, you may not have much need for life insurance. However, as you take on more responsibility and your family grows, your life insurance needs increase. You should periodically review your needs in order to ensure that your life insurance coverage is adequate.There are several simple methods that can be used to e
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Some years back Insurance was bought primarily as a saving and to lower the tax burden. Even today people buy Life Insurance for the purpose of saving tax without understanding the logic of Insurance. The proof lies in the fact that maximum number of policies are sold between December and March just before the financial year end. Just because buying Life Insurance lowers your tax burden it is understood by the most people that it is the best form of Investment. Most people do not understand that the basic logic of Life Insurance is to provide security to your family from an unfortunate event.Life Insurance serves the following basic purposes:•
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While conventionally life insurance products have been bought for the tax sops (under Section 80C) they offer, there is much more to life insurance. Purchasing a life insurance policy is a very important exercise for all individuals. A life insurance policy helps the nominees in indemnifying the financial loss in case of an eventuality. Besides, the policy can also act as a savings product and help in accumulating a corpus over a period of time. Before purchasing an insurance policy, one should be cautious about:-1. Focus on your needs and your risk profileIt is important to focus on your requirements and needs before purchasing any insurance policy. The policy shou
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The stock market has been showing the signs of weakness. Should this worry participants in equity through unit-linked insurance plans (Ulip)? The product is best for generating wealth over periods not less than 10 years. There is also enough evidence to show that equity out performs other assets over the long term and can give annualized returns of 15-20 per cent.The volatility that equity markets are experiencing now is not unusual for this asset market. Sashi Krishnan, the CIO of Bajaj Allianz Life Insurance, says, “For Ulips, which target consistent long-term performance, the time horizon of the investment portfolio plays a significant role. Since the portf
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Life and its circumstances are fragile. Therefore, today the need for some kind of financial protection for the future becomes mandatory. There are various options available for the consideration of investment avenues. The most commonly expressed needs or desires of people are the need to save for the future family expenses and old age, a house to call their own, financial assistance in the event of contingencies like accidents etc. and of course, a certain degree of tax relief.The periodical payments of premium become a habit. Unlike, other savings plans where only the accumulated savings is payable on maturity, the entire sum assured is payable in a Life Insurance
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Annuities fall into two general categories that are based on when the annuity's payments are scheduled to begin. These categories are immediate and deferred annuities. A contract is designated as an immediate annuity if income payments to the annuitant are scheduled to begin one payout interval for e.g. one month or one year after the purchase date of the annuity. This contract is also known as a deferred annuity if income payments are to begin at some further point in the future - perhaps as much as several years from the date of purchase.In the case of immediate annuities, the naming has often caused confusion. It should, therefore, be remembered that although
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In the intensely competitive age we live in, organizations across the world displayed an inclination to go that extra mile to retain their best employees. And why not? After all, an organization’s position among its peers in the industry is primarily determined by the quality of the talent it has.Rolling out employee stock option plans was one of the earlier strategies adopted by organizations to reward and retain outstanding performers. Plans aimed at retaining employees soon started to proliferate, with companies providing for flexible working hours and permitting employees to work out of their homes.These group term plans have been launched by private insur
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The markets have touched 12,000 and still counting. Experts are divided on the direction the markets will take in the days ahead. Insurance agents will use the rising markets as an opportunity to push sales of equity-linked insurance policies, But, if the markets take a dip after you have invested, you will have little opportunity to exit. So, does it make sense to invest in equity ULIPs?On the other hand, mutual fund agents will tempt you with new fund offers with little or no lcok-in. So what do you do?One year returns of equity ULIPs Company
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She takes the entire responsibility of your home and works 24/7. Her services are indispensable, irreplaceable. A homemaker, a housewife - call her what you may but while you may have bought enough insurance for yourself, chances are you’ve given little thought about insurance for your wife. Your alibi - she’s not an independent earning member.But considering the whole lot of responsibilities she shoulders, shouldn’t housewives buy insurance for themselves? Says Bijal Bakhai, Certified Financial Planner, "A housewife would definitely need insurance. In her absence the husband would need to incur various additional costs of appointing a nanny f
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With March approaching, tax payers will have to ensure they buy adequate insurance to claim benefits under Section 80C and 80D. But it does not necessarily mean that the entire limit should be used up, just to take tax advantage.Medical insurance premiums up to Rs 15,000 come under Section 80D. And life insurance premiums up to Rs l00,000 get benefits under Section 80C.A proper mix of cover that gets tax advantage is essential to ensure that there is adequate insurance. But first, you need to identify the needs. And they will keep on changing, according to your age, dependents and other factors. Here's some help:Between 25 and 35 years: A person who is jus
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