01.

LIFE INSURANCE

Under life insurance, the life of the individual is assured. This means that at the time of his/ her death, the family members receive an assured amount. Life insurance not only helps the survivors for their financial requirement after death of the earning member, but also helps in achieving financial goals during the lifetime. It also provides a tool of savings and tax planning.

02.
Health Insurance

With growing complexities in life and deteriorating lifestyle, the increased risk of falling prey to Medical problems have increased. In case a primary breadwinner suffers any ailment that makes him unfit for work, the rest of the family will face a severe cash crunch. It would not be possible for them to sustain their lifestyle, repay debts or even afford the high costs of treatment. Here comes 'Health Insurance'..


Explore
03.
Non-Life Insurance

Every asset has a value and it provides a benefit to the owner. The benefit can be in the form of earnings or any other. If the asset is destroyed, there will be a financial loss i.e. value of asset as required to replace and earnings. Insurance policies indemnify such financial losses to the owner of the asset. General Insurance also indemnifies the owner of the asset against liability that arises due to operation of the asset.


Explore


Human being can be considered as an income-generating asset whose value depends on his or her skill and lifespan. While premature death or disability can be a huge mental setback for the dependents of the deceased, it is also a significant financial loss. Whereas living too long is a great financial burden because meeting the expenses of old age can be a challenging task. Life Insurance is the process of making alternate arrangements whereby such financial loss can be mitigated.

Life Insurance also supports the insured in the event of

  • Sickness
  • Disabilities
  • Unemployment
  • Acts as collateral while applying for loans
  • Understanding an insurance policy

    There are a few terms involved in the process of acquiring and maintaining a life insurance policy. Here is a Snapshot of the same:

    Premium

    This is the payment made to participate in an insurance scheme and to keep the insurance coverage going. Premium depends on the following points:

  • Age
  • Lifestyle
  • Sum Assured
  • Type of Insurance Policy Chosen
  • Premium Payment Term
  • Policy Term
  • Sum Assured

    It is the value of the insurance cover. In the event of the death of the life assured, the sum assured is the amount that the dependent (nominee) receives. In Participating (with bonus) policies, it generally also refers to the Guaranteed Sum Receivable on Maturity.

    Premium Payment Term

    Is defined as the interval of period that requires one to pay the premium. The tenure of the policy and the premium paying terms can be different. Premiums can be paid monthly, quarterly, half-yearly or yearly. There are single premium policies also wherein premium is to be paid only once.

    Policy Term

    This is the duration or the number of years to be insured, the longer the term the lower the premium.


    Term Insurance Plan

    Term insurance in the most basic form of Life Insurance where the only direct benefit is the sum assured in the event of death.
    As the name implies these policies are issued for a fixed term so if the death occurs during this time the sum insured is payable. If the person lives beyond the term of the policy, no compensation is paid.
    This type of policy offers only pure death protection and does not have any savings or money back facility.

    Types of Term Insurance Plan

  • Level Term Insurance
  • Decreasing Term Insurance
  • Increasing Term Insurance
  • Term with Return of Premium
  • Click to Query

    Whole Life Insurance Plan

    Whole Life Plans are insurance policies that cover the insured throughout his or her life. This means that there is no fixed premium paying term. The payment is continuous throughout the life and in the event of death of the life assured; the sum assured is paid to the family (nominee). The payment under this policy is guaranteed.
    Some whole life policies also fixed payout windows during, which the investors can opt to withdraw a certain amount.

    Click to Query

    Endowment Insurance Plan

    A person always dreams to provide the best facilities for his family members. Once he starts earning he sets a goal to buy a house, a car, to get married and later he plans to provide the best education for his children. He always wants these facilities to be there after he retires, and even after his death.
    For such requirements, Endowment Plans are the most preferred.
    In case of survival, in addition to the sum assured, additional bonuses accumulated during the term are also paid. In case of death of the policy holder during the term, the death benefits are payable to the nominees, which includes payment of full sum assured in addition to the vested bonus.

    Types of Endowment Plans

  • Simple Endowment Plan
  • Limited Payment Endowmwnt Plan
  • Joint Life Endowment Plan
  • Whole Life Endowment Plan
  • Click to Query

    Unit Linked Insurance Plan

    A Unit Link Insurance Plan is basically a combination of insurance as well as investment. A part of the premium paid is utilized to provide insurance cover to the policy holder while the remaining portion is invested in various equity and debt schemes. Policy holders have the option of selecting the type of funds (debt or equity) or a mix of both based on their investment need and appetite. Just the way it is for mutual funds, ULIP policy holders are also allotted units and each unit has a net asset value (NAV) that is declared on a daily basis. The NAV is the value based on which the net rate of returns on ULIPs are determined.

    Click to Query

    Life Insurance

    'Simplify the Complicacies' is what we deal in. So let's understand some basic Jargons of Life Insurance

    Term Insurance

    Also called "Pure Insurance", Term Insurance provides a "High Life Insurance Coverage" for a "Specified Tenor" in a "Very Low Premium".

    Term Insurance usually doesn't pay any Maturity. It is the Simplest form of Insurance with only 3 things, Sum Insured, Annual Premium and Policy Tenor.

    There are also some Term Insurance which Returns all the Premiums paid on Maturity. However, they charge a higher Premium as compared.

    Click to Query

    Traditional Insurances

    These are the simplest and oldest form of Life Insurances. The premium you pay are invested in non-equity instruments like bonds and Long Term Deposits. Thus, they carry lower risk and volatility.

    They generally declare yearly dividends also called 'Bonuses' which are mostly floating. Most of these are loanable, however bear high pre-surrender charges.

    Click to Query

    Unit Linked Insurances

    ULIP is a product that unlike a Term insurance policy gives investors the benefits of both insurance and investment under a single integrated plan. A part of the premium paid is utilized to provide insurance cover while the remaining portion is invested in various equity and debt schemes. Just the way it is for mutual funds, ULIP's also allot units & each unit has a Net Asset Value (NAV) that is declared on a daily basis

    Generally Nothing is Guaranteed Except the Death Cover. They are Subject to Market Risks and bear various charges.

    Click to Query

    Section 80C and 10(10D)

    Section 80C entitles the assesse to claim Deduction for certain Investments and Expenditure up-to Rs 1.5lacs per year. Life Insurance acquires a major space of 80C in India. For 80C deduction, the Insured Sum should at-least be 10 times of the annual premium paid.

    Section 10(10D) exempts income received from a Life Insurance Policy from Tax. Exceptions are: Pension/Annuity plans, Employer Sponsored group life insurance, policy which violates the conditions of section 80C.

    Click to Query

    Utmost Good Faith

    Life Insurance is a Contract between the Insurer and Insured. The basis of each contract is Utmost Good Faith. Thus both, insurer & insured shouldn't hide anything material for the insurance contract.

    The Insured should not hide any medical ailment, lifestyle habits, heredity issues and Financial eligibility to ensure Claim Settlement. A declaration may invite extra premiums or proposal rejection, but will ensure 100% honor of contract.

    Click to Query

    Policy Charges

    An Insurance Company deploys many physical & human resources to manage it's clients. All those expenses are distributed proportionately amongst their clients.

    They include Policy Administration Charge, Fund Management Charge, Policy Servicing Charges, Surrender Charges, Mortality Charges and Upfront Charges. Customer should study the charges before taking a policy

    Click to Query

    Portfolio Restructuring

    In India, a big chunk of life insurance is bought in obligation, lack of knowledge or for tax saving. However, it mostly leads to dis-satisfaction.

    A customer should take time to hire a professional to Assemble, Analyze and Restructure their existing policies to suit their needs. Restructuring may require Pre-Close, Switch, Premium Holidays, Additional Purchase and lot. But it leaves you with a light head and clear understanding of where you are!!

    Click to Query

    Health Insurance

    'Simplify the Complicacies' is what we deal in. So let's understand some basic Jargons of Health Insurance

    Family Floater Policy

    A plan where the Entire Family is Covered in a Single Policy and people covered SHARE the total health insurance available to them is called a Family Floater. Thus, the overall claim limit of both, an Individual & the entire family is the same.

    Family may contain Self, Spouse, Children and in Some Cases Parents and Other Relatives too. Here, the premiums are generally charged as per the age of the eldest insured.

    Click to Query

    Group Insurance

    When instead of an Individual or a Family, the entire Organization or a Formal Group forms a contract with an insurer, it is called a Group Insurance. It comprises of Group Health and Group Personal Accidental Insurance. It has many advantages over Individual insurance.

    Benefits: Lower Premiums, High Customization, No pre-policy health checkups required, Higher age of Entry, Addition Deletion in between, Smoother Claims Settlement.

    Click to Query

    Waiting Periods / Exclusions

    Before buying a Health Insurance Policy, one must closely notice these.

    Waiting Periods: Many illnesses are out of scope of the policy for initial 30days, 1/ 2/ 4 years. These mostly comprises of treatments of pre-existing illnesses, cataract, piles, hernia, stone, joint replacement, cyst, sinus and few other surgeries.

    Exclusions: There is a set of common & permanent exclusions like War, breach of law, substance abuse, dental treatment, HIV etc.

    Click to Query

    Cashless / Reimbursement

    Cashless: All Insurance Co's have associations with many hospitals, a list of which is provided along with the Policy. If an insured is advised to take a treatment (within the scope of the policy) in these hospitals, they can be treated without paying cash to the hospital. The hospital raises the bill to insurance comp. which approves the allowable amount and pays directly to the hospital.

    Reimbursement: Treatments taken in non-network hospitals have to be initially paid by the client. Thereafter, insured may raise all bills, prescriptions, receipts, investigations along with claim for the settlement directly to his bank account.

    Click to Query

    Third Party Administrator (TPA)

    TPA is an organization that processes claims and performs other administrative services in accordance with a service contract with the Insurance Company. More specifically, a TPA is neither the insurer (provider) nor the insured (employees or plan participants), but handles the administration of the plan including processing, adjudication, and negotiation of claims, record-keeping, and maintenance of the plan. These are intermediaries between the Customer, Hospital and Insurer.

    Click to Query

    Co-Pay

    As per the terms & conditions of the insurance policy, a customer may require to bear a certain percentage of a claim. This Sharing of claims between the Insured and Insurer is called Co-Pay.

    In India, Co-pay is generally associated with Client's Age, Specific Illnesses or Hospital Agreement.

    Click to Query

    Day Care Treatments

    A Health Insurance policy mostly requires 24 hours continuous hospitalization for a claim. However their are certain conditions where a patient is eligible for a claim despite getting discharged within 24 hours of admission.

    Those treatments taken in-patient in a hospital where due to technological advancement, the treatment can be done within 24 hours are day-care treatments like Cataract, chemotherapy, Cyst Surgeries, Sinus Surgeries and many more..

    Click to Query

    Mutual Funds

    'Simplify the Complicacies' is what we deal in. So let's understand some basic Jargons of Mutual Funds

    Basic Concept

    A mutual fund is a type of professionally managed investment fund that pools money from many investors to purchase securities. Managed by Professional Fund Managers, they aim to achieve common goals of investors by investing within the Regulations Specified.

    They invest in Equities, Debt, Money Market Instruments, Bonds, Specified Commodities & many more.

    Click to Query

    Units / NAV's

    Units: Just as shares represent the extent of equity ownership in a company, units represent your extent of ownership in a mutual fund. Higher the Units, Higher your shareholding in a Mutual Fund and vice-versa.

    Net Assets Value (NAV): A fund's NAV equals the current market value of a fund's holdings minus the fund's liabilities (sometimes referred to as "net assets"). It is computed by dividing net assets by the number of fund shares outstanding. Thus, it's simply the monetary representation of the per unit valuation of the overall fund securities.

    Click to Query

    Types of Mutual Funds

    Open Ended Funds: Funds with Open Entry and Exit for New and Existing Investors.
    Close Ended Funds: These are offered for purchase only once, at the time of their launch. They can further be traded in Stock Exchanges.
    Exchange Traded Funds: ETF holds assets such as stocks, commodities, or bonds, and trades close to its net asset value over the course of the trading day. ETFs bear low costs, tax efficiency, and stock-like features.

    Click to Query

    Systematic Investment Plan

    SIP is an investment vehicle offered by mutual funds to investors, allowing them to invest using small periodically amounts instead of lump sums. The frequency of investment is usually weekly, monthly or quarterly. They are the most popular tools of Investment in Mutual Funds, and allows the investor to Average their purchase cost by periodic investments. They are the best source of Long Term Wealth Creation

    Click to Query

    Systematic Transfer Plan

    STP is a variant of SIP. It is essentially transferring investment from one asset/ asset type into another asset/ asset type. The transfer happens gradually over a period. Thus, it is Investing ==> from the Invested Fund ==> to Another Fund ==> at periodic intervals.

    Click to Query

    Taxation in MF's

    Mutual Funds are subject to Capital Gain Taxes. These gains can be short term or long term. They may be from Equity Oriented Fund or Debt Oriented Fund.

    Short Term Captial Gains Tax: 15% for Equity funds sold within 12 months of purchase, and "As per Income Tax Slab" for Debt Funds sold within 36 months of purchase.

    Long Term Capital Gains Tax: 0% for Equity Funds sold after 12 months of purchase, and "10% without Indexation" or "20% with Indexation" for Debt Funds sold after 36 months of purchase.

    Click to Query

    Debt Funds

    Debt fund has core holdings are fixed income investments with investing objectives as preservation of capital and generation of income. A debt fund may invest in short-term or long-term bonds, securitized products, money market instruments or floating rate debt. They are sensitive to Interest rates of the inherited securities. Longer the Fund's Average Maturity, Higher the volatility. They are good investment options when the interest rates are prone to fall from their ever high.

    Click to Query