Sunday, February 17, 2019

Are you always on the road? It is time to buy personal accident insurance

Are you always on the road? It is time to buy personal accident insurance

At 26, Rajiv was the most prudent person I had ever met. He had a fantastic career graph, with a wonderful wife and two kids on the personal front. Like any other family man, he bought a term insurance to secure his family in his absence. After the birth of his second child, he also bought a comprehensive family floater health insurance. Armed with both these policies, he was confident that his family would always remain safe and secure in case of an emergency.

However, life is unpredictable and takes uneven turns when you least expect. One day while going to the office, his motorcycle collided with a car coming from the other side. The accident left him incapacitated for the next six months. While his health insurance policy took care of hospitalization expenses, he had to dig into his savings to meet household expenses. As he was alive, his term insurance also did not help him. Suddenly, reality struck him hard and made him think, is there anything he could have done to avoid the current situation?

There are many people like Rajiv for whom coverage means taking health and term insurance policies only. While you may bank on your term insurance in case of death and health insurance in case of a medical emergency, you can depend on your personal accident policy in case of any disability.

Why should you go for personal accident insurance?

Indian roads, which record the highest road fatalities in the world, claimed more lives in 2015, with the number of road deaths increased to 1.46 lakh.
As per some government data, 400 people are killed every day in road accidents. Accidents come unannounced, and they affect not only physically, but financially also. In case the breadwinner is involved in the accident, the family’s income may also get affected if he/she is forced to take a break from the work. The situation becomes worse if the policyholder dies in an accident. While injuries can make you disabled temporarily or permanently, they can drain your life’s savings, leaving your family in a tough situation. Hence, for securing your family’s well-being and meeting its day-to-day needs in your absence, it is must to buy a personal accident policy.

While it is difficult to avert accidents, one can buy a personal accident policy to deal with the financial burden of an accident. The policy offers compensation in the event of injuries caused due to accidents.
What it covers
  1. Accidental death: In the case of death of the policyholder during the policy tenure, the nominee gets the sum insured as mentioned in the policy document.

  2. Permanent total disablement: If due to an accident, the policyholder has a permanent or total loss of limbs, sights or any other disability, he/she will be paid the sum insured.

  3. Reimbursement of accidental hospitalization expenses: In the case of a minimum of 24 hours hospitalization following an injury, the policyholder can approach the insurer to compensate for the hospitalization expenses.

  4. Accidental hospital daily allowance: Some insurers give a per day allowance for each day of hospitalization to cover expenses like food, transport, etc.

  5. Additional features: Along with the traditional benefits, personal accident policies also offer additional benefits like:
  • Child education benefits

  • Legal and education benefits

  • Injury arising due to terrorist activities
How much cover is recommended?

As an accident or disability causes financial losses, therefore, the extent of cover should be able to:
  • Maintain the family’s current financial situation

  • Deal with financial goals

  • Cover expenses, like home treatment, physiotherapy, etc.
Is it affordable to buy a personal accident policy?

Yes, personal accident insurance policies are one of the most affordable insurance coverage available in the market. By paying a small premium amount, you can get comprehensive coverage. Further, unlike other policies, the age of the policyholder doesn’t decide the premium, as it mainly depends on the occupation of the person. It means a young army officer will have to pay high premium rates than a 50-year old teacher.

For the premium calculations, most of the insurers have categorized occupations in the following heads:

How to file a claim?

The claim process is simple and mentioned in the policy document. Here’s the standard process to be followed:
  • You or your nominee needs to notify the insurance company immediately or within the stipulated time frame

  • Submit the policy documents within a stipulated time frame

In the case of disablement, the insurer would ask for a doctor’s report to find out the extent of disablement.

What to choose a rider or a standalone policy?

Accident cover can be bought both as a rider and a standalone policy. However, most riders offer limited coverage as they cover only the accidental death and permanent disability. On the other hand, a standalone policy offers comprehensive coverage as it includes various types of losses, including partial or temporary disablement and income loss. Further, these policies are comprehensive and can easily be customized by the policyholder.

Some employers also offer group personal accident cover. Usually, the personal accident policy should be at least 5-10 times of your monthly income, but the coverage offered by the corporate policy may not be sufficient. Also, a group plan only covers employees, but individual accident policy coverage can be extended to family members at an affordable premium rate.

Be safe than sorry

It is advised to buy the policy when you are young because the chances of an accident are quite high at that stage of life. Moreover, the unhealthy lifestyle doubles the risk of an accident. Thus, it is good to buy a policy when you are young.

Know all about Staggered Monthly Payout in Term Insurance

Most of the Bollywood films released between 1970s-1990s had one thing in common- father died, and his wife and kids suffered in life. While the father left behind wealth for the family, the villain in the film tried to kill the family to get the wealth. Or, fooled the mother and asked her to sign on the property papers. The mother, who was already in the grief of his husband’s death, signed the papers. Now, the villain had all the wealth and the lady, and her kids struggled to survive.

Know all about Staggered Monthly Payout in Term Insurance

Now, assume what if your family also met with the same fate? Though, you might put your term insurance policy on the table to contradict it, are you sure buying the policy alone would financially secure your family?

A few days ago, I was talking about my recently bought term insurance with my wife. Of course, she was first reluctant to discuss it, but when I persisted, she agreed. After listening to me for a while, she asked me a question: “What will I do with this money”?

Like my wife, many people have little financial knowledge. Although a term insurance will pay a huge sum of money to your nominee if something unfortunate happens to you, do you think, your family will be able to manage the lump sum amount/one-time payment received on your death? Will your nominee use the amount in a way that all the financial goals you had earlier chalked out are fulfilled? If these questions have made you think even for a minute, it is the time to consider a term insurance offering a staggered payout option.

What does staggered payout mean and how is it useful?

The death of a loved one is devastating for the family and as a result, the family may not be able to make rational decisions about money which they get from the insurance company. There could be a crowd of greedy financial advisors who may take undue advantage of the situation like it happened in the case of Mrs. Rajni Verma, whose husband Mr. Viren Verma bought a term insurance with regular lump sum payout option. Post his sudden death, his wife Rajni received the insurance amount of Rs 1 crore.

Being financially illiterate and at an emotionally unstable phase of her life, Rajni relied on her relatives and friends to decide the fate of the money. However, the money was invested without a thought in some loss making properties and mutual funds. Some relatives also borrowed money and did not return it. It was a complete financial disaster and was too late before Mrs. Rajni realized that the entire money was gone. She was left with no financial assistance to support her eight-year-old son and 11-year-old daughter. Though Mr. Viren had bought a term insurance, his policy failed to support his family financially.

It happens to a lot of families and therefore, it is better to opt for a staggered payout option. Under staggered payout, the family gets a portion of insurance benefits on the death of the policyholder, and the remaining is paid-out in the form of recurring monthly income over the tenure of 10-15 years, depending on the insurer. It means the family will get a pre-decided amount every month, similar to the policyholder’s salary. Such plans are useful for a family who will not be able to manage a lump sum amount.

Further, term plans with a staggered payout option can also be bought online. Also, from the perspective of tax benefits, both term insurance plans offering staggered and lump sum payouts are treated equally. Irrespective of the payout option chosen, premiums paid on the term insurance are eligible to get an exemption under Section 80C of the Income Tax Act. Unlike an annuity from the pension plan, the monthly income received under term plans is tax-free under Section 10(10D).

Usually, under staggered payout, the following options are available:

Should you goodbye lump sum plans completely?
Staggered or deferred payouts add customization to term insurance plans, but don’t write off lump sum plans completely. Increasing income is a good option, but it might not suit everyone. People looking for protection against high debts, like home loan, credit card dues, etc.; might find a regular online term plan offering lump sum benefit a better option, while those looking to secure living expenses and future goals, might be interested in deferred payout and increasing income plans. Also, there could be some immediate needs for which lump sum plans make more sense. If you know your family is financially educated, and you are confident that they can smartly use the money or are at a key life stage like education or marriage, then you should opt for lump sum payouts.

According to the survey conducted by one of the Indian insurance companies, 62% respondents said that financial protection is complete only if the policy gives lump-sum death benefit along with the regular income to meet daily household expenses.

Therefore, for the adequate coverage, you should opt for a term insurance plan that combines lump sum and monthly payment option. For instance, ICICI Pru iProtect Smart, an online term plan, gives three different ways to receive death benefits: Lump sum, Income and Increasing Income. At any time, a beneficiary can convert all or some of the monthly income into lump sum.

No one knows your family better than you, and so you are the best to decide their fate. Whatever the mode of payment you choose, make sure the insurance coverage is adequate.

Wednesday, July 27, 2016

Reliance Nippon Life Insurance by Reliance Capital a Review

Reliance Capital has introduced a new offer on its Reliance Nippon Life Insurance plan. This offer is called as Increasing Money Back Plan.

This is a guaranteed money back plan along with life cover for entire policy period. Reliance Nippon Life Insurance will give you money back on each three years with increasing amount than previous amount. Also lump sum maturity amount at the end of policy term. Premium amount will be fixed for entire policy period. You will also got tax exemption as per Income Tax rules.

Now we will look at the main facilities and benefits of Reliance Nippon Life Insurance plan -

  • This is an unique plan which gives you both money back and life cover for entire policy term.

  • Payout percentage will increase on every 3 year from 10 percent to 20 percent to 30 percent to 50 percent to 100 percent of base sum assured.

  • This plan is available to age 15 to 55 years and starting from minimum sum assured Rs. 1,00,000 or minimum premium of Rs. 18000 per year.

  • This policy has an good option for you like you may pay for entire period of policy term or you can stop premium after 7 years , it is totally depend on you.But policy term will be mature after 15 years in both cases.

  • There is an option for loan against the policy.You may avail upto 80 percent loan against the surrender value.This will be available in case of emergency.

  • In case of unfortunate death of you during the policy term your nominee will get full death benefit. This amount will be 10 times of the annual premium or guaranteed sum assured of the policy on maturity or 105 percent of the total premium paid.

  • Also as per Reliance Capital they will provide you a fixed discount on premium depending upon the Sum assured amount chosen by you.

For your easy understand we are giving an example

Mr. Kumar just married at the age of 30 and after his marriage he decided to invest some money on Reliance Nippon Life Insurance. He chosen sum assured of Rs. 2,50,000, premium pay of Rs. 28578 (excluding taxes) for 15 years.

Now look at the conditions-

If Mr. Kumar paid premium for entire 15 years then he will get money back of -

  • Rs. 25,000 after 3 Years  . (10% of Sum Assured)

  • Rs. 50,000 after 6 Years  . (20% of Sum Assured)

  • Rs. 75,000 after 9 Years  . (30% of Sum Assured)

  • Rs. 1,25,000 after 12 Years  . (50% of Sum Assured)

  • Rs. 2,50,000 after maturity (15 Years) . (100% of Sum Assured)

But unfortunately Mr. Kumar passed after a sudden accident on 11th year of the policy term. Then his wife will receive a lump sum amount of Rs. 3,30,076 as a death benefit. Now calculate it , he paid total 11 nos. premium (Premium of Rs. 28578 /Year) means Rs. 3,14,358 and death benefit amount is Rs. 3,30,076 which is 105 percent of premium paid amount.

Friday, February 5, 2016

How Much Money You Should Invest

How much money you should invest?

Taking an investment decision is not easy. It is an art as well as a science. Selecting the right investment opportunity for yourself is an art while utilizing the correct investment strategy requires a scientific approach. Numerous factors also come into play that differ from individual to individual, depending upon your personal goals and objectives. That said, before you start investing, here are five things you need to keep in mind while deciding the amount of money you want to invest:

Identify investment objectives: Before deciding upon how much investment you need to make, it is important to set out and define financial goals. Be it buying a house, a car, children’s education or marriage, insurances, a retirement plan or any other objective, you need to attach a figure to your goal. At the same time, you also need to decide the time taken to achieve this goal. This will help you calculate how much you need to invest on a monthly or yearly basis. However, make sure this does not exceed your income at any point in time.

Young investors: If you are a young investor in your twenties, then you can save and invest more. This is because you will have comparatively lower responsibilities and financial burden. You can then set aside a larger proportion of your income. A lot of experts suggest that you should invest at least 30% of your income at the start of your career. It is also expected that you have a higher ability to take risks as your financial liabilities are lower. So, typically, a major portion of your investments should be in equity-based investments. As time passes, and your risk-taking ability reduces, you can opt for more stable investments like fixed-income mutual funds and so on.

Investing early: The amount you invest depends on when you start investing. This is because two factors determine how much money you end up with—the amount you invest and the time period of your investment. The earlier you invest, the more you earn. This is because you earn interest on your profits too. You thus have longer to accumulate enough money. Your overall returns increase. This may even enable you to achieve your targets early.
It can best be illustrated by an example. If you set out early a target of Rs 5 crore of investments before you retire, you can spread your investments over a 40 year time span. Suppose, you expect a 12% per year return on your investments, the monthly investments required would work out to Rs 3,980 – an affordable sum. If you started 10 years later, reducing the time period to 30 years, you would need to invest Rs 14,000 per month.

Taxation: Every year, the government stipulates that you can invest Rs 1.5 lakh and reduce your total taxable income. This includes investments in financial instruments like Public Provident Fund (PPF), Equity-Linked Saving Schemes (ELSS) and so on. It is almost always worthwhile to tap into this tax-saving mechanism. However, first check what your total taxable income is. If it is only Rs 50,000 over the minimum tax threshold, then why invest Rs 1.5 lakh in these instruments? You can invest Rs 1 lakh in other long-term options like mutual funds and equity portfolio.

Liquidity needs: It is good to invest. But ensure you have some money left in your hands for your regular expenses. Those eager to invest often get into long-term commitments like Systematic Investment Plans (SIP). These ensure you shell out a fixed sum every month. If you fix the amount at a very high level, you won’t have any money left for your spending needs. For example, if you earn Rs 40,000 per month, it would not be wise to invest Rs 30,000 per month. Would the remaining Rs 10,000 cover all your needs? What if there is an emergency and you need liquid cash? Take these into consideration while deciding your monthly investment amount.

Investing in Dream Home: Everyone wants to have a dream home of their own. However, investing a huge amount has to be planned. Majority of us invest in our dream homes post applying for a home loan. The planning requires comparison of all available options, be it a financial bank or any other NBFC. It is also important to understand how much amount you will have to shell out every month for your EMI. You can utilize home loan EMI calculators online to identify your monthly EMI. Another important step included in planning is to identify the home loan interest rates provided by financial institutions.

Thursday, February 4, 2016

Day to Day Measures to Manage Personal Finance

6 day to day measures to Manage Personal Finance

A popular Jamaican saying goes in this manner, “Save money and money will save you”. True indeed! We all want to save money to financially secure ourselves and meet any future financial needs. However, many times the intent is not reflected in our actions. Many forget that savings can start only after cutting down on expenses. No, we do not mean you need to cut down your holidays and vacations. Here are six simple steps that you can follow to manage your personal finance.

Make an expenditure report everyday: Make a list of all your expenditure on a daily basis. Studies show that a person can save an average of 20% of his expenditure by re-evaluating his expenditure report. Jot down all your family expenditure at the end of a long day and see where you are spending that extra buck. Make a conscious effort to reduce on the things that are not necessary. Share this with your kids too. This small effort makes your kids financially aware. You also get that extra family time with your kids as a bonus for your hard work!

Plan your shopping raids: Pulses, cereals, clothes, shoes… The list is endless. Wants are always increasing. Going shopping every week only increases this. It also reduces the time you get for other activities. So, go shopping only once a fortnight. Keep a paper and pen handy on your kitchen rack or in the living room. Make a list of all the things that you would need on a daily basis and shop only once a fortnight. You will save money plus you will get more time to take your kids to the park or go for a dip in the pool.

Offers, offers and offers! : Plan your shopping during the sales season, which usually coincides with festive seasons. The product prices are much lower. It is also a good time to buy and save some cash. Also you could buy at larger department stores or online stores that give discounts or at places where prices are much lower. Compare first, and then spend.

Energy and fuel consumption: Switching off lights when not needed; not using kitchen appliances for tasks that can be done manually; walking to the neighborhood market; using the public transport are some simple techniques to save on energy and fuel costs. Needless to say, it helps you save money. Plus, the ‘feel-good’ factor of saving the environment. These have their health benefit too.

Bring the party home: We all like to party and have a good time. But partying outdoors in lavish places costs a fortune. Instead, you can dine and have a dance party at home. Not only would the freedom and comfort be more enjoyable, it would be much cheaper and add to your savings.

Expensive gadgetry could be a waste: No denying that we are living in a world of gadgets. A television in every room, a computer, a laptop, a tablet, a smartphone, printer, faster internet, a larger television, an external hard drive, faster laptop, new headphones, advanced smartphone, new camera, 3-D-enabled television, quad-core computer… Do you really need all of these? Do you really need to upgrade your gadgets often? A better understanding of your requirements would surely help in this regard. Understand your requirement and avoid running behind fancy technology. Make sure that over-use of technology does not create a hole in your pocket. Technology needs to be consumed only where it serves a fitting purpose. It can help save a lot of money.

Sometimes loans to finance some of your personal needs can also be an option if your daily expenditure has burnt a hole in your pocket.

One of the financial institution which offers personal loans without any collateral and also multiple repayment options is Tata Capital. Visit Tata Capital to know more about loans for any of your personal needs.

Tuesday, July 21, 2015

Know Your Tax Credit on 26AS

Are you an Income Tax payer?Then you must want to view how much tax you have paid and how much tax paid by your employer.You can get all details of tax credit on form 26AS.This is very simple to view tax credit on 26AS.

You should verify form 26AS before filing Income Tax Return.In form 26AS you can easily view the following data

  • Details of Taxes Deducted by your Employer

  • Tax deducted for how much amount.

  • Details of Tax Deducted at Source for 15G / 15H .

  • Details of Tax Deducted at Source on Sale of Immovable Property u/s 194IA(For Seller of Property) .

  • Details of Tax Collected at Source

  • Details of Tax Paid (other than TDS or TCS).

  • Details of Paid Refund

  • Details of AIR Transaction

  • Details of Tax Deducted at Source on Sale of Immovable Property u/s 194IA(For Buyer of Property)

  • TDS Defaults (Processing of Statements)

Above details will help you to calculate your original tax deduction by your employer and tax submitted by your employer.You can easily calculate whether you have paid extra tax or you have to pay more Income Tax to govt. .Now come to the process of downloading or viewing Form 26AS.

How to Check Your Tax Credit on 26AS

To check form 26AS you need to follow some simple steps.

Step 1 : Open website of Income Tax Return .Now you need to login to view form 26AS and if you have not register yet then first register.

How to Register ?

First click on register & Select User Type (Whether you are individual or other) & Click Continue to go next step and put correct data like your permanent mobile no ,email id etc. & After filling all details just complete your registration. (If you feel any problem at the time of registration you can mail me on )

Step 2 : Now you have logged in to e-filling site.On left hand site on quick link click on View Form 26AS (Tax Credit) =& Click on Continue & Now you have redirected to TDS-CPC website .

Step 3 : Click on View Tax Credit (Form 26AS) at below of the page to view form 26AS.Now select assessment year and format type to view.You may also download in PDF or Text by selecting on View As.Download form 26AS for each assessment year.

I think this article helps you to view form 26AS.Please write problems and suggestions via comment.This will help me to know your requirement.

Tuesday, June 23, 2015

Atal Pension Scheme Details

Atal Pension Scheme Details

In budget 2015-16 Govt. of India has introduced a pension scheme called Atal Pension Scheme for people of India,specially for poor peoples.This step has been taken to support financially to poor people at the time of old age.This is a voluntarily saving for their retirement.

Atal Pension Yojana (APY) administered  by Pension Fund Regulatory and Development Authority (PFRDA).They are trying to focus on the people who are in National Pension System (NPS).We will take a look on the benefits,age limit,investment amount and more.

Read  Fixed Deposit Interest Rate in India

Atal Pension Scheme

1. Eligibility of APY :

Atal Pension Scheme is applicable to all Indians who have a bank account.Govt. of India will also contribute 50% of the total contribution or Rs. 1000 annually (whichever will be less) for 5 years (FY 2015-16 to FY 2019-20) only to eligible candidates.Eligible candidate mean the candidates who are not the member of any statutory social security scheme and also who are not paying Income Tax.This special facility will be available to those who join NPS between 1st Hune ,2015 to 31st December,2015 .Eligibility will be verified by Fund Regulatory and Development Authority (PFRDA) as per record from Central Record Keeping Agency.

2.Age Limit :

Minimum age limit is 18 years and maximum age limit is 40 years for Atal Pension Scheme.However the facility of pension will start from 60 years age.Minimum period of contribution will be 20 years.

3.Documents Required :

Adhara Card is required to open Atal Pension Yojana. Bank will link your Aadhar card no with your account.

Except all above details some important points to be noted -

  • After completion of 60 years the candidate have to submit the application of request to Bank for starting monthly pension.

  • Before 60 year of age you can not exit this Atal Pension Scheme.In special cases like serious health problem,death etc. you can exit from the scheme.

  • If you fail installment then you have to pay delay fine as Rs. 1 for contribution upto Rs.100/-,Rs. 2 for contribution from Rs.101/-  to Rs.500/-,Rs. 5 for contribution from Rs.501/- to Rs.1000/- and Rs. 10 for contribution above Rs.1001/- .

  • If you discontinue your monthly installment then after 6 month account will be frozen,after 12 months account will be deactivated and after 24 months account will be closed.

  • Existing Swavalamban Scheme subscribers will be automatically migrated to Atal Pension Yojana (APY) if they are between age 18 to 40 years.

Now come to the monthly installment amount and monthly pension amount as per variation of age.

Atal Pension Yojana Chart

Return Amount (For Monthly Pension of Rs. 1000)

Return Amount (For Monthly Pension of Rs. 2000)

Return Amount (For Monthly Pension of Rs. 3000)

Return Amount (For Monthly Pension of Rs. 4000)

Return Amount (For Monthly Pension of Rs. 5000)

So Download Application Form (All Language Forms are Available) and Apply For Atal Pension Yojana.

Also Download State wise Telephone Nos for detail information.

All the above data has been collected from official website of Govt. of India.Before investment confirm all details from their websites.