Just Insured for your beloved ones.

ING Market Shield

2011-08-18T15:54:00.000+05:30

ING Market Shield

Is unpredictable market situation concerning you to limit your investments? No worries. ING presents ING Market Shield - one of its kind insurance plan that offers guaranteed high returns in a fluctuating market.

ING Market Shield not only provides life cover but also balances risk and reward in a transparent manner and provides you an opportunity to enjoy growth while retaining protection. It is a Unit linked life insurance plan that ensures you never miss an opportunity to maximize your gains and at the same time limits your losses.

Key Benefits

High Returns: Optimize your upside potential with continuous equity participation.
Guaranteed NAV: Protects your investments from fluctuations in the markets
Guarantee Anytime:Guaranteed NAV can be availed anytime in policy term, not only on maturity.
Flexibility: Option for Limited premium payment term, charge free withdrawals; Top Ups

Product Features

Entry Age (age last birthday)	Minimum: 8 Years Maximum: 55 Years
Age at maturity	Minimum: 23 Years Maximum: 70 Years
Premium Paying Term (PPT)	5, 10 years or Regular (Equal to Policy Term)
Policy Term	15 - 20 years
Premium	Minimum For 5 yr PPT : Rs 48000 For 10 yr or Regular PPT: Rs 36,000 Maximum: No Limit
Initial Sum Assured	10 to 20 times the Annual Premium
Frequency	Annual Premium Payment only
Top Up Premium	Minimum: Rs 5,000 Maximum: Any amount (subject to U/W guidelines)

2011-07-06T17:02:00.002+05:30

ING Life to invest Rs 2.40 bn for expansion plans

2010-07-10T11:49:00.000+05:30

ING Life India, part of the ING Group, has announced its 5-year growth ambition, including growing the business by 5 times and growing its customer base to 5 million. The company will be infusing fresh capital of Rs 2.40 billion in FY 2010-11 to fund its expansion.Unveiling the 5-year ambition for ING Life India, Tom McInerney, COO - ING Insurance said, ``ING sees its Asia-Pacific businesses to lead the growth in insurance worldwide. Within ING Asia-Pacific, India is uniquely placed and a frontrunner of this growth. We have a huge opportunity in this market and we are committed to see this business grow.``ING Life India`s 5-year ambition will be driven by expanding its distribution network, improving its productivity and building efficiencies. ING Life currently has a strong captive distribution network, including its tied agency force and bancassurance. It has a presence panning 232 cities across the country, with over 55,000 tied agents and a strong Bancassurance partner, ING Vysya Bank.Explaining the plan, Kshitij Jain, MD & CEO, ING Life India said, ``Over the last 18 months, we had focused on consolidating our business and strengthening its foundation. The company is ready to embark on its next phase of growth. This growth will come from expanding our current distribution network and building further on our productivity. We are targeting to grow our Business by 5 times and achieve a customer base of over 5 million in the next 5 years.``Explaining the company`s focus on driving efficiency, Jain said, ``We have built an efficient business, and will continue to drive this as an important focus area. The board has approved the infusion of Rs 2.40 billion additional capital in 2010-11 to fund the next phase of growth.``ING Life India`s total premium income (TPI) has grown CAGR 40% in the last 5 years, closing at Rs 16.43 billion for FY 2009-10. Its asset under management has shown a significant growth at CAGR 66%, and the company now manages over 45 billion. ING Life India`s declining opex/TPI ratio is a result of its sharp focus on managing its business efficiently. Declining opex/TPI ratio is a key indication of efficiency in life insurance business. ING Life India today has presence across 232 cities. The company is capitalized at over Rs 12 billion, with a solvency margin of 2.21 times.

New Laws for ULIPs

2010-06-29T15:43:00.001+05:30

यूलिप के लिए दिशानिर्देश जारी

नई दिल्ली, प्रेट्र : बीमा नियामक इरडा ने सोमवार को यूनिट लिंक्ड बीमा उत्पादों यानी यूलिप के लिए नए दिशानिर्देश जारी कर दिए। यूलिप पर नियंत्रण को लेकर बाजार नियामक सेबी से रस्साकशी में जीत हासिल करने के बाद निवेशकों को इनका बेसब्री से इंतजार था। उम्मीद के मुताबिक इरडा ने नए दिशानिर्देशों में सख्ती बरती है। उसने न केवल धन निकासी की अवधि यानी लॉक इन पीरियड बढ़ा दिया है, बल्कि बीमा कवर को बढ़ाने के लिए भी बीमा कंपनियों से कहा है। इन दिशानिर्देशों को बीमा कंपनियों को एक सितंबर से लागू करना है। इरडा की ओर से सोमवार को जारी एक सर्कुलर में सभी यूलिप उत्पादों के लिए लॉक-इन पीरियड को तीन साल से बढ़ाकर पांच साल कर दिया गया है। इससे यूलिप दीर्घकालीन वित्तीय उत्पाद बन गए हैं जो जोखिम से सुरक्षा प्रदान करते हैं। ऐसे उत्पादों पर बीमा कवर देने की भी बात कही गई है, जिसमें पहले वर्ष का प्रीमियम बढ़ाकर 10 गुना कर दिया गया है। फिलहाल यह पांच गुना है। इन कदमों के साथ इरडा ने यूलिप के मामले में बीमा पहलुओं को बढ़ाने की कोशिश की है। सेबी और इरडा के बीच विवाद की जड़ यह थी कि सेबी इन्हें निवेश उत्पाद मानता आया था, वहीं इरडा का कहना था कि ये बीमा उत्पाद हैं। उम्मीद के मुताबिक इरडा ने कमीशन और खर्चो में भी कटौती कर दी है। नियामक ने साफ कहा है कि बीमा कंपनियों को सभी यूलिप पर पेंशन के अलावा हेल्थ और लाइफ कवर देना होगा। नए दिशानिर्देशों में यूलिप उत्पादों पर 4.5 प्रतिशत का सालाना रिटर्न देने के लिए भी कहा गया है।

Ulips, equity MFs to lose tax cover in new-look Code

2010-06-19T15:32:00.001+05:30

Ulips, equity MFs to lose tax cover in new-look Code

http://economictimes.indiatimes.com/personal-finance/mutual-funds/mf-news/Ulips-equity-MFs-to-lose-tax-cover-in-new-look-Code/articleshow/6056607.cms

NEW DELHI: Unit-linked insurance plans (Ulips), equity-oriented mutual fund schemes and a number of other popular savings and investment instruments will lose their tax immunity, and with it, their attractiveness when the Direct Taxes Code (DTC) comes into operation. The Central Board of Direct Taxes (CBDT) plans to reduce the number of instruments that qualify for tax deductions to only about half a dozen, its chairman SSN Moorty said, as the government overhauls the direct tax regime to try and make it simpler, boost revenues and encourage long-term savings. The Rs 3-lakh tax deduction limit proposed in the draft DTC will also be lowered. Revised proposals for a new Direct Taxes Code to replace the nearly 50-year-old Income-Tax Act were unveiled on Tuesday. The government has said it hopes to operationalise the code by April 2011. Ulips, which are hybrid products incorporating investment and insurance cover as traits, are particularly popular. In the 2009-10 fiscal, such products accounted for more than four-fifths of the total insurance premium of around Rs 2.60 lakh crore that was collected. They are controversial too: capital market regulator Sebi and insurance regulator Irda are involved in a tug-of-war over who has the right to regulate Ulip products. “Ulips will be out of the exempt, exempt, exempt (EEE) tax regime,” said a senior finance ministry official, referring to the different stages at which financial instruments may be taxed. At present, individuals who invest in Ulips do not pay tax at any stage—at the time of investment or contribution, during the tenure of investment, or at maturity. It qualifies for tax deduction along with a host of other savings schemes, including bank deposits, equity-oriented mutual funds, national savings certificate deposits and principal repayment on home loans. Taxpayers can claim a deduction of up to Rs 1 lakh a year on these instruments. “Tax benefits are a key driver for insurance penetration and dilution of any benefits will have an impact on penetration,” said GV Nageswara Rao, MD and CEO, IDBI Fortis Life insurance. The revised proposals make it clear that only six schemes—public provident fund (PPF), the pension scheme administered by the Pension Fund Development Regulatory Authority, general provident fund, recognised provident funds and pure life insurance and annuity schemes—will be tax-free. Tax will not be levied at any stage on these schemes. The new pension scheme will also be covered by the EEE method of taxation and withdrawals will not be taxed at maturity. However, investments made before the DTC comes into force will continue to be eligible for the EEE method of tax treatment for the full duration of the financial instrument. This means an investor who buys a Ulip before the DTC comes into force will not be taxed at any stage during the full tenure. Ulips could be taxed at the time of maturity, but the government has not clarified yet the tax treatment of the products. “The existing tax treatment of Ulips is beneficial as it helps in the flow of funds to the infrastructure sector, besides contributing significantly to the capital market”, said R Kannan, member-actuary, Irda. The original code had proposed the concept of savings intermediaries that would invest the amounts deposited with them in Ulips, equity-linked mutual fund schemes, debt-oriented mutual fund schemes or other financial products depending on investors’ choice. Withdrawals would be taxed, but not a rollover. CBDT has dropped the proposal to tax savings instruments at maturity in the absence of a social security system. The aim now is to encourage taxpayers to invest in long-term savings schemes. PPF, for instance, has a 15-year tenure, although partial withdrawals are allowed after the sixth year. The revised discussion paper has said the rules for contribution and withdrawal will be harmonised and made uniform so that savings are made by the taxpayer for the long term.

ING GOLDEN LIFE

2010-06-17T17:25:00.002+05:30

ING GOLDEN LIFE-is one of the top three Retirement Plans in the Country (Financial Cronical Nov 2009)

Today when you look ahead in life your golden years may seem far away, but only if you plan towards the future ‘Today’ will these dreams become a reality. It’s vital to save systematically and have a financial plan that helps you stay in control of your retired life and live the way you want to. As a unit linked investment plan – ING New Golden Life offers you the perfect solution that will help you realize the retired life of your choice, with a wide range of Benefits that are personalized to suit your needs and ensures that your life after retirement is the golden period of your life.

Key Benefits
*Flexibility to choose your age of retirement / vesting date
*Loyalty units to grow your fund faster
*Flexible Investment Strategy - Manage your own investments or choose the Life Stage Investment

Product Features
*Eligibility
Minimum Age at Entry: 18 years
Maximum Age at Entry: 65 years
Minimum Vesting Age: 45 years
Maximum Vesting Age: 75 years
*Minimum Yearly Premium
For Premium Payment Term: Less than or equal to 10 years - Rs.30,000 p.a.
For Premium Payment Term: Greater than 10 years:- Rs.18,000 p.a.
*Maximum Yearly Premium
There are no limits on the maximum premium payable
*Premium Paying Term
5 to 30 years (for Regular premium)
*Vesting Period
Minimum Vesting Period: 10 years
Maximum Vesting Period: 57 years
Vesting periods allowed are 10, 15, 16… 57 years

ING Term Life - A Term Insurance Policy

2010-06-13T15:59:00.001+05:30

ING Term Life - A Term Insurance Policy

'Let their dreams live’
You have always worked towards providing your family the best that life has to offer. After all, seeing your family happy and comfortable is a source of immense joy for you, as well. And ensuring your family continues to enjoy a comfortable lifestyle even in your absence is your top priority. ING Life Insurance offers you a simple and very economical way to achieve this objective, so your family can maintain a secure and good lifestyle, no matter what tomorrow may have in store.The ING Term Life is a Term Insurance Policy and is the simplest form of insurance, where the Life Assured is provided insurance cover and on his death during the policy term, the sum assured under the policy is paid to his beneficiary. What is more, the ING Term Life is one of the most affordable and inexpensive ways of obtaining life insurance cover.For more details on risk factors, terms and conditions please read the Brochure and Benefit Illustration carefully before concluding a sale.

Key Benefits
*Protection Cover: Upwards of 10 lacs Sum Assured
*Flexibility to choose a policy term between 10 and 30 years
*Flexible Premium Paying Term: Single, Limited & Regular pay options
*In the event of death of the LA during the policy term, the sum assured chosen under the policy shall be payable
*Optional riders for comprehensive accidental coverage in regular payment option
*Tax benefit under Sec. 80c and Sec. 10(10D) of the Income Tax Act 1961

Product Features

*Eligibility
Minimum entry age : 18 years
Maximum entry age : 65 years
Maximum maturity age: 75 years
*Sum Assured
The minimum sum assured you can opt under this plan is Rs.10 Lakhs.
*Policy Term
You have the flexibility to choose a policy term between 10 and 30 years.
*Premium Payment Terms
Regular premium - till policy term completion
Limited premium - 3 or 5 years
Single premium - is a one time payment
*Premium Payment Options
Annual , Half-yearly , Quarterly or Monthly

Premium Calculator:

http://calculator.inglife.co.in/SalesIllustration/JSP/ils.jsp?null

Press Release

2010-06-13T15:58:00.000+05:30

Press Release
April 10, 2010

Unit Linked Insurance Products (ULIPs) offered by different Insurance Companies
In the context of the recent directions of the Securities and Exchange Board of India (SEBI) to 14 insurance companies directing them not to issue any offer document, advertisement, brochure soliciting money etc from investors, the IRDA deems it appropriate to issue the following statement.
“Policyholders of the Unit Linked Insurance Products (ULIPs) offered by different insurance companies are assured that these policies are safe and secure and the matters arising out of the recent orders of the SEBI will be addressed expeditiously in the appropriate forum in accordance with Law.”

/sd.-(J. Hari Narayan)Chairman
Place : HyderabadDate : 10.04.2010

NOTICE PERTAINING TO LICENCING OF CORPORATE AGENTS

2010-06-13T15:56:00.000+05:30

CORPORATE AGENTS
June 08, 2010.
NOTICE PERTAINING TO LICENCING OF CORPORATE AGENTS
Attached is the list of 4261 Corporate Agencies in our data base which were due for renewal on or before 31.03.2010 but have not been renewed till date. All these Corporate Agency Licenses have been withdrawn from our database. Insurers and General public are hereby cautioned not to transact any insurance business through them.

(Suresh Mathur)
Joint Director -IRDA

ING Flexi Life Plus

2010-02-13T16:08:00.002+05:30

ING Flexi Life Plus

ING Flexi Life Plus is a unit linked insurance policy giving the dual benefit of insurance coverage & investment opportunity. It is a comprehensive plan that provides flexibility in premium contributions through payment modes with the option to increase or decrease of regular premiums. The plan allows you the choice of extending your life cover after payment of premiums for the first five years, the amount accumulated in your fund will be given as maturity benefit, while withdrawal facilities during the term will help you to meet financial contingencies. This plan also provides an Enhanced Accidental Protection Benefit, which provides additional benefit on death due to accident. You are allowed to make partial withdrawals during the policy term after the initial lock-in period of three years. For more details on risk factors, terms and conditions

Key Benefits

*Flexibility to increase / decrease the regular premium
*Enhanced Accidental Protection Benefit
*Cover continuation option

Eligibility Criteria
Minimum age at entry : 0 years lbd (for entry ages below 12 years, risk cover commences from age 5 or 2 years from policy commencement date, whichever is later)
Maximum age at entry : 60 years
Minimum age at maturity : 18 years
Maximum age at maturity : 70 years
Policy Term : 10 / 20 years
Premium Paying Term : Same as policy term
Premium Payment Modes : Regular (Annual, Half-yearly, Quarterly, Monthly)
Top-up Premium : Minimum: Rs. 2,000
Sum Assured :Minimum: 6.25 times the annualized first policy year regular premium Maximum: 25 times of Annualized first policy year regular Premium subject to underwriting conditions
Minimum Premium Payable Rs 48000.00
Yearly
Half-Yearly
Quarterly
Monthly
2nd year onwards
75% of 1st policy year premium
Top-Up Premium
Additional top-up premium subject to a minimum of Rs 2,000 over and above the regular premiums paid, without exceeding 25% of the total regular premiums paid.

Maximum premium
No limit, but subject to underwriting considerations for the first policy year but from the second policy year onwards the maximum premium payable would be 125% of the first policy year annualized premium on an annualised basis

http://www.inglife.co.in/productcenter/productcenter-investment-FlexilifePlus.shtml

Give life insurance top priority while making plans

2010-02-13T15:53:00.000+05:30

Give life insurance top priority while making plans

Life insurance should form an integral part of an individual’s financial planning. It should be seen as a security that one can provide to his family to meet future uncertainty. The type of the insurance policy and the amount of the financial cover which an individual may choose is a matter of his personal choice and depends upon the number of factors including his age, future financial commitment, income level, etc.
Apart from the financial cover to meet future uncertainties, life insurance can also be looked at as one of the important tax-saving instruments on account of income-tax benefits available under the Income Tax Act, 1961 (The Act).

Income-tax benefits
The income-tax benefits in respect of the life insurance can be broadly classified under two categories. First, the benefit available in respect of payment of the life insurance premium and second, in relation to the amount received under a life insurance policy on maturity or on happening of a certain contingency.

Deduction in respect of premium
A deduction under section 80C of the Act can be claimed in respect of the life insurance premium paid by the tax payer during a financial year (April 1 to March 31). The maximum deduction that could be claimed is restricted to the overall limit of Rs 1 lakh available under the said section. It should be noted that the deduction is available only to an individual or to the Hindu Undivided Family. In case of an individual, the deduction can be claimed in respect of the premium paid for life insurance for self, spouse and any child of such individual. In case of Hindu Undivided Family, the deduction can be claimed in relation to the premium payable on behalf of any member of the family.
Amount received on maturity or on death — not taxable As per the section 10(10D) of the Act, any amount received under a life insurance policy, including bonus paid on such a policy is exempt from income-tax, subject to specified conditions. However, the sum received under a key man insurance policy is taxable.
Similarly, any claim proceeds received from the insurance company by the dependent(s) /nominee( s) of the policy holder after his death is not taxable under the Income-Tax Act.

Caution Point
It is pertinent to note that any sum received under an insurance policy issued on or after April 1, 2003, in respect of which, the premium payable for any of the years during the term of the policy exceeds 20 per cent of the capital sum assured, is taxable. However, any sum received under such a policy on the death of the policy holder continues to be exempt from tax.

To Sum it up
As per media reports, it is quite ironical that on an average, people spend more money on their vehicle insurance rather than personal insurance. Probably, the reason is that vehicle insurance is mandatory while life insurance is not.
In case of individuals where they are the sole/main earning members of the family, life insurance should be the first and foremost financial investment that one should consider. In this context, term insurance policies, wherein for a reasonable premium, a large amount of life insurance cover could be taken, do provide a good avenue to financially de-risk the family in the hour of need.
Further, the tax benefits that one could avail should also act as the catalyst to encourage people to go for life insurance.

Source: http://economictimes.indiatimes.com/Personal-Finance/Insurance/Analysis/Give-life-insurance-top-priority-while-making-plans/articleshow/5532880.cms?curpg=1

14 tax-free incomes for FY 2009-10

2009-11-08T11:00:00.002+05:30

In a few months' time the taxman will coming knocking on your door. However, he cannot tax you on the following 14 important items of income and receipts, as they are fully exempt from income tax and which a resident individual Indian assessee can use with profit for the purpose of tax planning.
1. Agricultural income
Under the provisions of Section 10(1) of the Income Tax Act, agricultural income is fully exempt from income tax.
However, for individuals or HUFs when agricultural income is in excess of Rs 5,000, it is aggregated with the total income for the purposes of computing tax on the total income in a manner which results into "no" tax on agricultural income but an increased income tax on the other income.

2. Receipts from Hindu undivided family (HUF)
Any sum received by an individual as a member of a Hindu undivided family, where the said sum has been paid out of the income of the family, or, in the case of an impartible estate, where such sum has been paid out of the income of the estate belonging to the family, is completely exempt from income tax in the hands of an individual member of the family under Section 10(2).

3. Allowance for foreign service
Any allowances or perquisites paid or allowed as such outside India by the Government to a citizen of India, rendering service outside India, are completely exempt from tax under Section 10(7).
This provision can be taken advantage of by the citizens of India who are in government service so that they can accumulate tax-free perquisites and allowances received outside India.

4. Gratuities
Under the provisions of Section 10(10) of the IT Act, any death-cum-retirement gratuity of a government servant is completely exempt from income tax.
In respect of private sector employees, however, gratuity received on retirement or on becoming incapacitated or on termination or any gratuity received by his widow, children or dependants on his death is exempt subject to certain conditions.
The maximum amount of exemption is Rs 3,50,000. Of course, this is further subject to certain other limits like the one half-month's salary for each year of completed service, calculated on the basis of average salary for the 10 months immediately preceding the year in which the gratuity is paid or 20 months' salary as calculated. Thus, the least of these items is exempt from income tax under Section 10(10).

5. Commutation of pension
The entire amount of any payment in commutation of pension by a government servant or any payment in commutation of pension from LIC pension fund is exempt from income tax under Section 10(10A) of IT Act.
However, in respect of private sector employees, only the following amount of commuted pension is exempt, namely:
(a) Where the employee received any gratuity, the commuted value of one-third of the pension which he is normally entitled to receive; and
(b) In any other case, the commuted value of half of such pension.
It may be noted here that the monthly pension receivable by a pensioner is liable to full income tax like any other item of salary or income and no standard deduction is now available in respect of pension received by a tax payer.

6. Leave salary of central government employees
Under Section 10(10AA) the maximum amount receivable by the employees of central government as cash equivalent to the leave salary in respect of earned leave at their credit upto 10 months' leave at the time of their retirement, whether on superannuation or otherwise, would be Rs 300,000.

7. Voluntary retirement or separation payment
Under the provisions of Section 10(10C), any amount received by an employee of a public sector company or of any other company or of a local authority or a statutory authority or a cooperative society or university or IIT or IIM at the time of his voluntary retirement (VR) or voluntary separation in accordance with any scheme or schemes of VR as per Rule 2BA, is completely exempt from tax.
The maximum amount of money received at such VR which is so exempt is Rs 500,000. As per Finance (No. 2) Act, 2009 an assessee cannot enjoy both the exemption in respect of VRS upto Rs 500,000 and also a deduction under Section 89.

8. Life insurance receipts
Under Section 10(10D), any sum received under a Life Insurance Policy, including the sum allocated by way of bonus on such policy, other than u/s 80DDA or under a Keyman Insurance Policy, or under an insurance policy issued on or after 1.4.2003 in respect of which the premium payable for any of the years during the term of the policy exceeds 20% of the actual capital sum assured, is fully exempt from tax.
However, all moneys received on death of the insured are fully exempt from tax Thus, generally moneys received from life insurance policies whether from the Life Insurance Corporation or any other private insurance company would be exempt from income tax.

9. Payment received from provident funds
Under the provisions of Sections 10(11), (12) and (13) any payment from a government or recognised provident fund (PF) or approved superannuation fund, or PPF is exempt from income tax.

10. Certain types of interest payment
There are certain types of interest payments which are fully exempt from income tax u/s 10(15). These are described below:
(i) Income by way of interest, premium on redemption or other payment on such securities, bonds, annuity certificates, savings certificates, other certificates issued by the Central Government and deposits as the Central Government may, by notification in the Official Gazette, specify in this behalf.
(iia) In the case of an individual or a Hindu Undivided Family, interest on such capital investment bonds as the Central Government may, by notification in the Official Gazette, specify in this behalf (i.e. 7% Capital Investment Bonds);
(iib) In the case of an individual or a Hindu Undivided Family, interest on such Relief Bonds as the Central Government may, by notification in the Official Gazette, specify in this behalf (i.e., 9% or 8.5% or 8% or 7% Relief Bonds); (iid) Interest on NRI bonds;
(iiia) Interest on securities held by the issue department of the Central Bank of Ceylon constituted under the Ceylon Monetary Law Act, 1949;
(iiib) Interest payable to any bank incorporated in a country outside India and authorised to perform central banking functions in that country on any deposits made by it, with the approval of the Reserve Bank of India or with any scheduled bank;
(iv) Certain interest payable by Government or a local authority on moneys borrowed by it, including hedging charges on currency fluctuation (from the AY 2000-2001), etc.;
(v) Interest on Gold Deposit Bonds;
(vi) Interest on certain deposits are: Bhopal Gas victims;
(vii) Interest on bonds of local authorities as notified, and
(viii) Interest on 6.5% Savings Bonds [Exempt] issued by RBI
(ix) Stipulated new tax free bonds to be notified from time to time.

11. Dividends on shares and units - Section 10(34) & (35)
With effect from the Assessment Year 2004-05, the dividend income and income of units of mutual funds received by the assessee completely exempt from income tax.

12. Long-term capital gains of transfer of securities - Section 10(38)
With effect from FY 2004-05, any income arising to a taxpayer on account of sale of long-term capital asset being securities is completely outside the purview of tax liability especially when the transaction has been subjected to Securities Transaction Tax.
Thus, if the shares of any company listed in the stock exchange are sold after holding it for a minimum period of one year then there will be no liability to payment of capital gains.
This provision would even apply for the old shares which are held by an assessee and are sold after the Finance (No.2) Act, 2004 came into force.

13. Amount received by way of gift, etc - Section 10(39)
As per the Finance (No.2) Act, 2004, gift, etc. received after 1-9-2004 by individual or HUF in cash or by way of credit, etc. is being subjected to tax if the same is not received from relative, etc. However, Section 56(2) provides that the amount received to the extent of Rs 50,000 will, however, be exempt from the purview of income tax.
Similarly, amount received on the occasion of marriage from a non-relative, etc. would also be exempted. It may be noted that the gift from relatives. as mentioned in the Section can be received without any upper limit.

14. Tax exemption regarding reverse mortgage scheme - sections 2(47) and 47(x)
Any transfer of a capital asset in a transaction of reverse mortgage for senior citizens under a scheme made and notified by the Central Government would not be regarded as a transfer and therefore would not attract capital gains tax. The loan amount would also be exempt from tax.

Source: http://business.rediff.com/slide-show/2009/nov/04/slide-show-1-fourteen-tax-free-incomes-for-fy-2009-10.htm

Opting for insurance? Term plans are the best

2009-11-08T10:52:00.002+05:30

Term plans have always received a vote in their favour from individuals who are looking to insure their lives at a lower cost. And with good reason. But with so many life insurance companies vying for a place in the individual’s insurance portfolio, the options merit evaluation. Here, we present a few pointers on how to assess a term plan given the various options available.
Simply put, a term plan is a pure risk cover plan without any maturity benefit. This is because only mortality charges and administration expenses are covered in the premium amount; there is no savings element here. Hence, only in case of an eventuality do the individual’s nominees stand to ‘benefit’ by way of receiving the sum assured.

It is called the intelligent person�s insurance cover. However, term plans are yet to make an impression in the minds of insurance seekers in India. Most of them would prefer expensive endowment polices because they would get �something at the end of it.� Never mind, they may be underinsured thanks to the costlier premium. Still, the cheapest and most effective insurance cover fails to enthuse most of them. �Most people just don�t get it. For them insurance is all about tax breaks and tax-free returns on maturity,� says an insurance advisor with Life Insurance Corporation of India. He says it is difficult to convince customers, as most of them do not like the idea of not getting any money at the end of the term or on maturity. Another reason why term plans remain out of public perception is due to the lower commission rate that insurance agents earn on them.

Are you insured enough to tackle a crisis?

2009-07-15T12:13:00.002+05:30

Are you insured enough to tackle a crisis?
Sunil Dhawan and Deepti Bhaskaran, Outlook Money

Leading life is somewhat similar to driving a car. Driving a car entails preliminary checks to see if every part is working fine: the right pressure in the tyres, adequate coolant, smoothly working clutch and engine parts.
All these, backed by a full fuel tank, imply that one is in control and set for a long drive. Life similarly asks for control over various things so that we can have a good time living it.
What one earns, spends and saves in the present are not the only indicators of how well one is in control of one's financial life. To keep things under control, one should also do a good job of making provisions to meet future financial needs. Insurance is a key part of this planning. We look at provisions like health and life insurance covers in addition to those for house, home loan and car(s).
Health insurance
The right cover. Unlike life insurance, where you can figure out the right sum assured amount by using some thumb rules, arriving at an optimum health cover is usually difficult. Says Deepak Mendiratta, managing director, Health and Insurance Integrated, a health insurance consulting firm: "There are no calculations or thumb rules to arrive at a cover. However, you could look at it in two ways.
"First, check for any hereditary ailment within your family or the kind of ailments your peers or friends usually encounter and cover yourself appropriately.
"Second, see how much money can you put away every year so that a sum insured could be looked at accordingly."

9 questions to check if you are in control
*Is anyone financially dependent on me?
*If yes, then how much life cover should I buy?
*Should I go for a pure term insurance plan?
*Can I manage my investments separately?
*Should I buy a bundled plan like an endowment policy or a Ulip?
*Till what age should I keep myself covered?
*Have I planned for long-term financial goals of my children and myself?
*Is my nominee aware of the covers taken?
*Am I reviewing my coverage needs regularly?

Plugging gaps. You could simply buy another health insurance policy to the first one to increase your total sum insured amount. You can club the two policies to meet the hospitalisation expenses, if the need arises.

However, you can never claim an amount higher than the medical expenses you incur. A family floater is also a good way to bump up your cover. It is bought for the entire family and the sum insured opted for is available to all.

You could also top up your cover by looking at policies with benefits like critical illness plans and hospital cash plans. Since these policies pay in lump sums, they are usually designed to take care of your income stream for the period you are hospitalised.
Life insurance
Get term, get control. Life insurance is meant for those whose financial needs you would like to be met after you are no more. Review your situation periodically to maintain adequate cover.
Plugging gaps. Check on two things to identify any gap in your term insurance. The first is the coverage amount. The most important thing is to estimate your dependents' financial needs in the unfortunate event of your death. Take into account the lifestyle they are accustomed to and the one you would want for them in your absence.

A thumb rule for those early in their career is to have a minimum cover of about eight times their gross annual income. As one ages, it may be trimmed to about five times the gross annual income.
Now, check the duration of the cover. See if there is a period which is not covered. It is not right for a 30-year-old man to buy a term plan for 15 or 20 years. Buying a term plan at around age 50 is costly and there are health issues.
6 steps to buy a term plan to be in control
*Identify insurers that offer policies for the longest term
*Also look for policies that have maximum maturity age
*Choose three insurers with the lowest premiums for your age and other parameters
Refer to websites not only to find out the offered premiums, but also compare them
*Go for the annual payment option over the single premium option because, otherwise, if the rates fall in the future, you stand to lose
*Review after every addition (for example, parents becoming financially dependent on you) or deletion (children getting settled) of financial liability
*Unlike endowment plans, premium of term plans rises as its duration increases. However, life is uncertain and you should ideally choose a plan that covers you for long.
*Protect your house
*Opt for a Householder's Package Policy
*Take cover even against technical or mechanical breakdowns
*Buy through brokers or agents
*Term cover can be dropped easily once financial responsibilities are over. Currently, some insurers are offering term plans with coverage till age 75 or a term of 30 years.
*If you have a home loan, you should take a term plan or a loan cover term plan propotionate to the home loan amount. Ideally, the plan should start with the first home loan EMI.
*How to stay in control
*Review insurance plans regularly to accommodate changes in your life
Life cover
Revaluate cover after changes in take-home income, family status, financial liability and after spouse discontinues or resumes work
Health cover
*Buy a basic policy in addition to employer's cover
*You can top it up with floater plans, benefit policies like critical illness plans and hospital cash plans
*Look at exclusion clauses
Auto cover
If you are buying directly from insurer, bargain for best possible price. Bargain with brokers too
Don't compromise on cover for a discount. Always check out what covers you are getting
Insure car on full IDV. Higher discounts might mean a lower IDV. Ask for the exact IDV
Ask insurer if it has tie-ups with dealers of your car model so that you can get cashless claim settlement
Co-payment clause, known as 'excess' or deductible in the policy, makes you bear a portion of the claim. A higher deductible would mean lower premium since the risk shifts from the insurer to you. You could opt for a higher deductible to get more discounts. But, this means that if there is a claim, your liability to share the bill would increase

http://business.rediff.com/special/2009/jul/09/perfin-are-you-insured-enough-to-tackle-a-crisis.htm

FAMILY FLOATER HEALTH PLAN

2009-04-18T16:16:00.001+05:30

Dear Friends,
It’s best to be prepared for the worst so that it doesn’t take you by surprise. Our FAMILY FLOATER HEALTH PLAN eliminates all your worries and financial burdens when it comes to medical expenses. Just take a look at all the benefits of the plan:

*India\'s first Exclusive Health Insurance Company

*Premium and One Policy for Entire Family

*Cashless Hospitalization Facility

*Large Hospital Network of more than 4000 Hospitals Fast & Efficient Settlement of Claims

*You don’t need to take a medical test upto 50 years of Age

*Tax Benefits under Section 80 - D

To prepare yourself, just Call for details

Thanks & Regards,
Vivek Patwal,
PH:9811511501,
http://www.vivekpatwal.blogspot.com

Term Insurance-A Reality check,

2009-03-26T18:12:00.002+05:30

Term insurance vs ULIPs: A reality check

In recent days it has become fashionable to discourage investors from buying unit linked insurance plans, ULIPs.
The reason: High administrative, mortality and fixed annual charges. Instead, term insurance plans offer better insurance to the life covered, so goes the argument.
While each and every insurance product has its advantages and disadvantages compared to other such similar products, insurance buyers must understand their need for insurance before buying any insurance product.
The current article dwells on the advantages that a ULIP has over term insurance plan. Or rather, it tries to remove some misconceptions about ULIPs.
To understand this better, let us go through a conversation between two friends.

Conversation:
Friend one: I am thinking of buying an insurance plan to cover my life. Not sure whether to go in for a term plan or a ULIP.
Friend two: Don't think twice. Go for a term insurance plan. They are the best way to cover a life
Friend one: But I have heard that in term plans no returns are available at the end of the plan period if I survive?
Friend Two: Yes. But why do you need returns from an insurance plan? You know my friend never mix investments with insurance. Keep them separate. You can always become rich by investing in mutual funds or equities. Take my word, go in for a term plan.
Friend One: You may be right. Hey, do you have any workings or illustrations, which I may go through before I decide on this?
Friend Two: Arrey yaar, why do you need workings? Don't you read newspapers? Don't you read the columns written by experts? All of them say that term plans are the best. If they are saying that term plans are good, they must be good. Anyways, who has the time to go through workings and all? I trust these free advices totally. I suggest you do the same too.
Friend One: But I don't know anything about investing in mutual funds or equities. What do I do?
Friend Two: Don't worry about that. There are financial planners who will plan everything for you. Just leave everything to them. They will help you out.

A real life example
One of our clients, let us call him Amit, wanted to take a life insurance cover. He had taken a home loan of Rs 45,00,000. He wanted a matching life cover to ensure that in the event anything happens to him, the maturity proceeds from the insurance could be used to repay the housing loan. He had two options before him.
Either buy a term plan or go in for a ULIP. We looked around for a number of options for a term plan. Given below are the quotes from various insurance companies for a life cover of Rs 45,00,000 for a person aged 32 years. The term of the cover is 25 years.

Life insurance company

ING Vysya Life Life cover (Rs)
45,00,000 Premium per annum (Rs) 15,298, Term (In years) 25
LIC of India 45,00,000 16,110 25
ICICI Prudential 45.00,000 15,496 25
Tata AIG Life 45,00,000 16,609 25
Om Kotak 45,00,000 16,482 25
Met Life 45,00,000 15,994 25
Max Newyork Life 45,00,000 15,795 25

Several comments are made against the insurance companies and advisors in general. Please understand that different products are structured to suit different individual needs of the customers. If endowment products have worked well since the last 50 years, it is not only due to the mis-selling by advisors.
Give credit to the product also which has enabled thousands of families to save regularly over a period of time and given them returns when they needed it the most.
Similarly if ULIPs are working well now it indicates the success of the product in tapping the latent demand existing in the market.
At the end of the day if you are convinced, for good or bad, buy what you want. But do take care to properly analyse the products and their pros and cons.

Term Insurance

2009-01-02T11:34:00.000+05:30

Term Insurance

The cheapest and the most basic, this is a no-frills life cover that should be one of your first financial instruments. Being a pure insurance cover, it does not return your money if you survive the policy term.

If you don't, the sum assured is paid to your dependants. So, buy only if you have financial dependants, or you expect to have dependants in the future. If you expect to have dependants till a later stage of your life, look for a plan that has a high maturity age.
Most term plans provide cover till 60-65 years of age. Few even offer plans till age 75.
As there is no surrender or maturity value in these, you should settle for the one with the lowest premium and the longest term.

Since they are simple, term plans can be easily compared on the basis of price and the cover period. Search for a quote from at least four to five companies before buying one.
Recently, a few variants have been introduced in term insurance.

ING Vysya Life Insurance has launched limited premium paying term (PPT) plans. In these, you have to pay a higher premium in the initial years to cover the premiums for the entire term, after which you stop paying altogether. If you think, you can afford higher premiums only for a few years, this plan will make sense for you.

However, it has its drawbacks. In the event of death in the initial years, you would end up paying much more than what you would have paid till that time under a normal plan.
Also, if at any point you want to discontinue the plan in the absence of dependants, you would have paid for the entire term in any case. Switching to a lower cost plan would also be hindered.
DLF Pramerica's Family Income Plan has come up with another innovation. Unlike a conventional protection plan, where the dependants receive a lumpsum, the plan allows you to choose the monthly financial support system.
Under this, your dependants would be paid on a monthly basis till the end of the plan term.

Important

Keep the highest possible term
Keep the maturity age as long as possible
Talk to 4-5 insurers or visit their websites to get premium rates
Choose the plan that has the lowest premium at your parameters
Undergo medical tests, if required
Keep the nominees informed
Pay premiums every year

How to make an insurance claim

2009-01-02T11:30:00.000+05:30

How to make an insurance claim

It is important for both the insured and the nominee to know the process of insurance claim settlement. A false step can lead to denial of the benefit for which life cover is bought.

What is a claim?

A life insurance policy is a contract between the insurance company and the insured in which the insurer agrees to pay a pre-defined sum upon the death of the insured. This sum is claimed by the nominee of the policy -- the person designated to make a claim in the event of the death of the insured.
Making a claim

In order to make a claim, the nominee needs to submit a claim form that is issued by the insurer. The nominee is also required to submit documents like the original policy papers, the death certificate of the insured and his death summary in case he died due to an illness. If death was accidental, these documents need to be supported by an FIR and a post-mortem report. In addition to these documents, the claimant also needs to provide an identity proof to establish that he is the nominee of the policy. The identity proof can be anything bearing the nominee's photograph and signature. That makes the PAN card, driving licence and passport eligible as identity proofs. The process of claim settlement begins once the insurer verifies these documents.

How long does take?

It usually takes a week to 10 days to settle a claim after all the relevant documents are verified by the insurer.

The Insurance Regulatory and Development Authority (Irda), the insurance regulator, has stipulated that claims should be settled within 30 days of receipt of all the relevant documents. The insurer can ask for clarifications or supporting evidence if he is dissatisfied with the documents. If this happens, a deadline of six months from the date of intimation of the claim is laid down for its settlement. If the insurer fails to meet the deadline, he has to pay an interest on the sum assured. The nominee can approach the insurance ombudsman if the insurer fails to pay the claim on time.

करीब 93 हजार भर्तियां करेगी रिलायंस लाइफ

2008-12-14T12:07:00.000+05:30

करीब 93 हजार भर्तियां करेगी रिलायंस लाइफ

दिल्ली, भाषा: दुनिया के अधिकतर देशों में निजी कंपनियां रोजाना हजारों कर्मचारियों को बेरोजगार कर रही हैं। इसके उलट भारत में निजी क्षेत्र की बीमा कंपनियां मंदी के इस मुश्किल हालात में भी धड़ाधड़ भर्तियां किए जा रही हैं। बीमा क्षेत्र में मौजूद मौके भुनाने के लिए देश के दूसरे नंबर के रईस अनिल अंबानी की कंपनी रिलायंस लाइफ इंश्योरेंस अगले चार महीनों में 2.5 हजार मैनेजर और 90 हजार सलाहकार नियुक्त करेगी। इससे पहले निजी क्षेत्र की प्रमुख बीमा कंपनी मेटलाइफ 32 हजार और मैक्स न्यूयार्क 44 हजार लोगों की भर्ती का ऐलान कर चुकी हैं। इनमें सलाहकार और मैनेजर दोनों शामिल हैं। अब तक रिलायंस समेत देश की सभी निजी बीमा कंपनियां करीब एक लाख 70 हजार लोगों को रोजगार देने की घोषणा कर चुकी हैं। रिलायंस लाइफ के सीईओ पी. नंदगोपाल ने बताया कि कंपनी ने भर्ती की प्रक्रिया शुरू कर दी है। नई नियुक्ति के बाद कंपनी के सलाहकारों की संख्या तीन लाख को पार कर जाएगी,हालांकि मैनेजमेंट से जुड़े कर्मचारियों की कुल संख्या 28 हजार होगी। चालू वित्त वर्ष 2008-09 के पहले आठ महीनों में कंपनी 40 हजार सलाहकार और 8 हजार मैनेजमेंट कर्मी भर्ती कर चुकी है। कंपनी सलाहकारों को पे-रोल पर नहीं नियुक्त करती है, बल्कि वे कमीशन पर काम करते हैं।

ING Term Life Plus

2008-09-20T15:34:00.002+05:30

ING Term Life Plus

"Ensure dreams are protected, and get your premiums back" Your responsibility towards your family is something you've always held close to your heart. All your efforts are devoted to their happiness, their security. Not just for the present, but even for the future. Needless to mention, your biggest priority has always been to ensure that your loved ones are secure, even in your absence. ING Vysya Life now offers you a great way to secure your family's future. That's not all; you can also enjoy a whole range of very attractive benefits offered to you in a very convenient and economical mannerThe ING Term Life Plus is a Term Insurance Product with return of premiums. In addition to the sum assured which is payable on death, under this Plan the Company also returns a proportion of the premiums that you have paid after completion of half the policy term and another proportion on the policy maturity date. You also have the flexibility to surrender the policy .

Key Benefits

Protection Cover: Upwards of 5 lacs Sum Assured
Flexibility to choose a policy term between 10 and 30 years
Mid-term benefit on surviving to 50% of the term
On maturity Total premium less any extra premium paid and mid-term benefit, shall be payable
In the event of death of the LA during the policy term, the sum assured chosen under the policy shall be payable

Optional riders for comprehensive accidental coverage in regular payment option
Tax benefit under Sec. 80c and Sec. 10(10D) of the Income Tax Act 1961

Eligibility
Minimum Entry Age: 18 years
Maximum Entry Age: 65 years
Maximum maturity age: 75 years
Sum Assured
The minimum sum assured you can opt under this plan is Rs.5 Lakhs
Premium Amount
This Plan allows you to choose the amount of premiums you wish to pay
Policy Term
You have the flexibility to choose a policy term between 10 and 30 years
Premium Payment Terms
Regular premium - till policy term completion
Limited premium - 3 or 5 years
Single premium - is a one time payment
Premium Payment Options
Annual, half-yearly, quarterly or monthly

or FOR MORE DETAIL YOU CAN CONTACT ME.

5 rules on how much insurance you need

2008-07-19T18:52:00.001+05:30

If you are an earning member of your family, and there are members of your family who are financially dependant on you, you need life insurance. But how much life insurance do you need?
There are many factors that are relevant in determining the amount of life cover you should buy.

Need for minimum protection
It is essential that a particular level of income should be maintained for the family even when its breadwinner is not around. Suppose a family's present needs are Rs 25,000 p.m. The extent of life insurance for its earning members should be such that interest income from the sum assured can meet the family's monthly expenses of Rs 25,000.
If one also wants to provide for the future fall in the purchasing power of rupee due to inflation, one must necessarily take policies for higher amounts. No widow, they say, has ever complained that her husband bought too much insurance.

Current income level
Payment of insurance premium results in an outflow of disposable income. You may, therefore, not like to buy too much insurance. One might have to limit the quantum of insurance keeping in mind the cash flow problems that will be created as a result of the obligation of regular payment of insurance premia.

Tax benefits
You should also take into account the tax benefit under Section 80C.
Accumulating for specific needs
If you expect to spend a particular sum of money for the education and / or wedding of your children, you may like to buy an insurance policy for a specific sum to meet such a lump sum commitment.

Present age
Your present age is a critical factor in deciding the quantum of insurance that you can afford. The rates of premium go up with the advancing age of the life assured. Hence, one can buy more insurance for the same premium at a younger age than at an older age.
The final decision rests upon a careful consideration and balance of all the above factors. The need for minimum protection may be quite high, but the current need for disposable income may not immediately permit buying adequate insurance.
You then have to make a compromise and buy extra insurance as and when you can afford it.
The 5 simple rules

In the event of any misfortune, well-planned life insurance can protect your loved ones from financial difficulties. However, in most cases, people find it difficult to estimate the correct value of insurance they need.

Partly this is because life insurance needs change through different stages of life. Young people with no dependants may not have much need for life insurance.
As one's family responsibility grows, life insurance needs too increase. Thus, a periodical review based on your family circumstances is required in order to ensure that the coverage is adequate.
There are several simple methods available to broadly estimate your life insurance needs. Five simple rules are:

1. Income rule
The most basic rule of thumb is provided by the income rule which holds that individual insurance cover should be at least around eight to ten times one's gross annual income. For example, a person earning a gross annual income of Rs 1 lakh should have about Rs 8 to10 lakh in life insurance cover.

2. Income plus expenses rule
This rule suggests that an individual needs insurance equal to five times your gross annual income, plus the total of basic expenses like housing or car loans, personal debt, child's education, etc.

3. Premiums as percentage of income
By this rule, payment of insurance premium depends on disposable income. In other words, one should decide the quantum of insurance after meeting the regular outgo from salary.
From the first two rules, you can make a broad estimate of the minimum insurance you should have. The premium as percentage of income rule can help you fine-tune your cash flow by committing an appropriate percentage of your income for paying life insurance premium.

4. Capital fund rule
This rule suggests that if you need Rs 1 lakh p.a. for your family needs, and assuming you do not have any other income-generating assets, you may like to create a capital fund of Rs 12.5 lakh (Rs 1.25 million) which can yield Rs 1 lakh (Rs 100,000) annual income @ 8% p.a. You may therefore buy a life insurance policy of Rs 12.5 lakh.

5. Family needs approach
This rule holds that you purchase enough life insurance to enable your family to meet various expenses in the event of key earning person's death. Under the family needs approach, one has to divide his family's needs into two main categories: immediate needs at death (cash needs), and ongoing needs (net income needs).

Update: About Indian Insurance companies

2008-06-29T12:26:00.001+05:30

Date: June 27, 2008

1.Aegon Religare Life Insurance Company Limited, a joint venture life insurance company promoted by Religare Enterprises Limited, India, Bennett Coleman & Company Limited, India and Aegon N.V., Netherlands has been registered as a Life Insurer under Section 3 of the Insurance Act, 1938 with the Authority. Besides DLF Pramerica Life Insurance Company Limited, a joint venture life insurance company promoted by DLF Limited, India and Prudential International Insurance Holdings Ltd, USA has also been registered as a Life Insurer under Section 3 of the Insurance Act, 1938 with the Authority. The Certificates of Registration (Forms IRDA/R3) have been issued by the Authority to the two companies today. With the registration of these two companies today, the total number of life insurers registered with the Authority has gone up to 21.

2.Bharti Axa General Insurance Company Limited, a joint venture general insurance company promoted by Bharti Ventures Limited, GIBA Holdings Pvt Limited, India and Societe Beaujon, a wholly owned subsidiary of AXA S.A., France has been registered as a General Insurer under Section 3 of the Insurance Act, 1938 with the Authority. The Certificate of Registration (Forms IRDA/R3) has been issued by the Authority today. With this registration, the total number of general insurers registered with the Authority has gone up to 20.

(C R Muralidharan)

Member

Source: http://www.irdaindia.org/

Ulips set to get costlier

2008-06-15T12:24:00.000+05:30

Ulips set to get costlier

The next time you buy a unit-linked insurance plan, you will be shelling out more money depending on the type of Ulip you buy and the company you buy from.This is because the Finance Bill that had proposed applying the service tax (12.36 per cent) on all charges that are deducted by an insurance company in a Ulip, such as the fund management charge (FMC), premium allocation charge, policy administration charge (which is deducted on a monthly basis), switching charges and various miscellaneous charges, has been passed by both the Houses of the Parliament this month. The chief financial officers of life insurance companies met last Wednesday and have decided to pass on the service tax burden to customers, confirmed officials of various life insurance companies. However, sources said a few insurers have agreed to pass on the service tax on fund management charges and policy administration charges to customers, but are yet to take a call on whether to pass on the service tax on the policy administration charges. Insurance companies will deduct the service tax amount from the premium that will be invested in the fund of your choice. As a result, lesser amount will get invested in the fund. The service tax will be applicable not only on the first year premium, but also on subsequent renewal premiums and the lump sum amount (top-ups) you add to your fund in any year.Therefore, you will lose more if you opt for a Ulip from a company that has higher charges. The charge structure varies across Ulips and insurers. The premium allocation charges across insurers range from 0 per cent to as high as 100 per cent in the first year. Fund management charges vary from 0.25 per cent to 3 per cent, while insurers deduct policy administration charge (normally Rs 50) on a monthly basis. "As a result of the service tax, Ulips with lower premium allocation charges will now become attractive. Besides, insurers will now be forced to reduce their premium allocation charges," said a senior insurance official. Life insurance companies clocked new business premium of Rs 92,988.71 crore (Rs 929.88 billion) in 2007-08, of which around 70 per cent came from Ulips. The life insurance industry will be paying over Rs 3,000 crore (Rs 30 billion) as service tax.

http://in.rediff.com/money/2008/may/28perfin.htm

ING Vysya Life adds two new plans

2008-06-04T14:19:00.000+05:30

ING Vysya Life adds two new plans

MUMBAI: Private insurance company ING Vysya Life on Thursday announced the launch of two new insurance products, ING Term Life and ING Term Life Plus. Both the products offer flexibility to choose premium paying terms between 10 years and 30 years. The minimum age of the individual should be 18 years and the maximum age limit is 65 years for both the products. Similarly, the maximum maturity age is capped at 75 years for both the plans. In case of ING Term Life, the minimum sum assured you can opt for is Rs 10 lakh. The customers can opt for paying a single premium, or limited premium or regular premium terms. If a 35 year old male chooses a sum assured of Rs 20,00,000 and a policy term of 20 years, he will have to pay a regular premium of Rs 6,249 every year. If he opts for limited premium, it would amount to Rs 18,402 per annum for a 5 year payment term. The single premium for this customer would be Rs 81,062. For ING Term Life Plus plan, the minimum sum assured you can opt is Rs 5 lakh. The maximum sum assured, however, will depend on your eligibility. If a 35 year old male chooses a sum assured of Rs.5,00,000 and a policy term of 20 years, he will have to pay a regular premium of Rs.5,278 per annum. If he opts for limited premium, it will be Rs 11,127 per annum and single premium will be Rs 45,363. For ING Term Life Plus, the company will return 40% of the regular premium if the policy holder survives half the policy term. On maturity, the total premiums are paid, after deducting mid-term benefits. Rider options, including accidental death benefits and accidental death, disability and dismemberment benefits are also available on the two plans. Tax benefits under section 80C and section 10(10D) of the Income Tax Act 1961 (‘Act’) are available on both the policies.

Do I need this insurance policy?

2008-05-23T18:44:00.002+05:30

Do I need this insurance policy?

Here are some basic questions you need to answer
*What are my liabilities?

*What funds do I have for dependents?

*What is my corpus and liquidity?

Once you answer these simple questions, evaluate your responses and check whether you come under any of these situations

I. No liabilities. Enough assets for contingencies and your dependent.
II. No liabilities, but not enough assets.
III. Have liabilities. Also, not enough assets for self and dependents.
IV. Have liabilities, but have assets as well for self and dependents.

Situation I - Congratulations There is no need for any life insurance for you.
Situation II - It's better that you buy life insurance, but do a complete analysis before you do so. Calculate the shortfall in terms of accumulated assets and buy a pure term plan accordingly.
Situation III - You certainly need life insurance. Get one ASAP.
Situation IV - Do a detailed analysis of your situation to check whether liabilities are minimal or significant. If liabilities are minimal and cannot jeopardise your family's financial health, then you might not need life insurance. However if liabilities are sizeable, you should opt for life insurance.

Now that you are aware of what needs to be done, take a call on the cover that you should purchase. Make sure that you buy a sizeable cover to take care of your liabilities and family's income needs. Finally remember to separate investments and insurance and just opt for a simple term plan.

Creating Life Child Protection Plan

2008-05-23T18:40:00.002+05:30

Creating Life Child Protection Plan

What can this plan do for me?

This plan is perfect if you have small children. You can provide for their future by setting aside a small portion of your current income. The money you set aside will help your children pursue their dream even when you are not around to take care of them. Death cover will provide immediate relief and the maturity benefit will come to your child at the right time when they need it.

The Creating Life Child Protection Plan helps you ensure that your children’s future is secure and prosperous, so they can pursue their dreams no matter what the future brings.

Key Features

Guaranteed Maturity Benefits (Payment in case of Death and at Maturity)
Flexible Maturity Benefit Options
Built-in Waiver of Premium Benefit

Benefits

Guaranteed maturity benefits
The sum assured and the accumulated compound reversionary bonus are paid on maturity.
A final additional bonus based upon the performance of company is paid on maturity.

Death Benefits

Your child will receive the sum assured in case of your death.

The policy continues even after the sum assured on death is paid.

No premiums have to be paid after the death of the parent
whose life is insured (Built-in waiver of premium benefit).

Your child will be eligible for guaranteed maturity benefits.

Additional Benefits

Rider Benefits
Increase your coverage at a nominal extra cost by opting for any of our riders -
Term Rider, Accidental Death Rider, Accidental Death, Disability & Dismemberment Rider and Waiver of Premiums Rider.

Loan Benefit
After paying a premium for three years, you will be eligible for a loan.

Maturity Benefit
Your child can either receive a lump sum or receive the amount in 3 or 5 equal instalments after the maturity date.

Tax Benefits
Tax benefits under Section 88 and Section 10 (10D) are available on all our life insurance plans and riders.

Look-in Period
This is a 15 day period for you to go through the terms and conditions and decide upon taking or canceling the policy.

Product Features

Eligibility
Minimum entry age: 18 years
Maximum entry age: 55 years
Maximum maturity age: 65 years

Premium Payment Term
Choose premium paying terms of 10 - 25 years

Premium Payment Options
Annual, half-yearly, quarterly or monthly

Minimum Premium Payable
Annual : Rs. 8,000
Half-Yearly : Rs. 4,000
Quarterly : Rs. 2,000
Monthly : Rs. 750

http://www.inglife.co.in/creatinglife.htm

My Retirement, My Way

2008-05-23T18:30:00.003+05:30

ING LAUNCHED ITS MUCH AWAITED RETIREMENT PLAN, ING Golden Life

‘My Retirement, My Way’

Presenting ING Golden Life – a retirement solution that will help you realize the retired life of your choice, with a wide range of Benefits that are personalized to suit your needs.
What is this Plan all about?
Your Life after retirement is undoubtedly the golden period of your life. As it’s the time you can live life on your own terms and take charge in doing the things you always dreamt of, free from the pressures of a working life. And of course, all this without having to worry about financial considerations. In your hectic life of today your golden years may seem far away, but you really have to plan today to make those dreams a reality. It’s vital to save systematically and have a financial plan that helps you stay in control of your retired life and live the way you want to.ING Vysya Life’s ING Golden Life offers you the perfect solution that will help you realize the retired life of your choice, with a wide range of Benefits that are personalized to suit your needs.
It Offers

*To choose your retirement age
*Flexible Premium options
*To Manage your investments as per your risk preference
*To exercise the pension option on the chosen retirement age
* How does this Plan work? The ING Golden Life is a Unit Linked Pension plan. You need to choose the age at which you wish your pension should start (called the Vesting Age). The Policy plan allows you the convenience of choosing the Premium and the duration you wish to pay. It allows you to manage your investments as per your risk preference. You can opt to invest the Premiums amongst the Funds offered i.e. Pension Debt, Pension Equity or Pension Liquid OR you can choose the Life Stage Investment Program which automatically adjusts your Fund allocation to secure your investments as your retirement age approaches. On reaching your chosen Vesting Age the accumulated monies in your Fund will be available to you to secure pension. Loyalty Units: The unique feature of Loyalty Units helps you to grow your Fund faster. While you pay the Premiums upto date and keep the Policy in force your Fund will get credited with Loyalty Units at the end of each Policy Year and the percentage of Loyalty Units will grow with the size of your Funds.

Eligibility Criteria
Age (as on last Birthday)
Premium Option
Regular Premium
18 years
65 years
Single Premium
18 years
70 years
Vesting AgeYou have the option to choose the Vesting Age i.e. the age when you wish your pension to commence. While the Policy is in force you may choose to pre pone or postpone the Vesting Age once by giving six months prior notice. Vesting Age (as on last birthday)
Minimum Vesting Age: 45 years
Maximum Vesting Age: 75 years
Vesting Period

Premium Amount This plan allows you to choose the amount of Premium you wish to pay and the duration, subject to certain minimum Premium limits.
You can opt for(a) Single Premium payment(b) Regular Premium payment term of a minimum 5 years to a maximum of 30years. You can choose the frequency of Premium payments as mentioned below:
Regular Premium
Mode
Premium Payment Term is less than or equal to 10 years
Premium Payment Term is more than 10 years
Yearly
Minimum Rs.20000/-
Minimum Rs.15000/-
Half Yearly
Minimum Rs.10000/-
Minimum Rs.7500/-
Quarterly
Minimum Rs.5000/-
Minimum Rs.3750/-
Monthly
Minimum Rs.1667/-
Minimum Rs.1250/-
Single Premium
Minimum – Rs.45000/- Top up Premiums: The plan allows you the option of paying additional unlimited Top Up amounts in addition to your Premiums as and when you wish, there by allowing you to increase your investments and savings at your own pace. The Minimum Top up is Rs.5000/-. However, Top ups can only be paid as long as Regular Premiums are paid to date.
Plan Features
Flexible InvestmentsThe Regular or Single Premium paid by you, less Charges are credited to an account called the ‘Fund Value’ and are used to purchase Units in one or more Unit Linked Funds as per your choice. At any point in time, the Fund Value is represented by the number of Units multiplied by the respective Unit Price of the Units held from time to time under all the Unit Linked Funds under this Policy.

Investment Options:As per your investment objective and risk appetite you may select one or more Unit Link Funds offered by the Company OR opt for the Life Stage Investment Program for investing your Premiums and Top Up Amounts.A. Unit Linked Funds: You have an option to allocate your Premiums as per your preference amongst one or more of the Unit Linked Funds mentioned below:
Unit Linked Funds

Pension Debt Fund
100% of the available Fund will be invested in debt and debt-related instruments.
Provides attractive income by investing in a diversified portfolio of debt and money market instruments of varying maturities
Pension Liquid Fund*
100% of the available Fund would be invested in Money Market and related instruments.
Provides reasonable returns while providing a high level of liquidity and low risk.
Pension Equity Fund
A minimum of 85% and up to maximum of 100% of the available Funds under this Policy will be invested in equities or equity related instruments and the balance in money market and related instruments.
Provides capital appreciation by investing in listed Indian companies*You cannot invest more than 25% in the Pension Liquid Fund
Loyalty Units Loyalty Units will be credited to your Fund at the end of each Policy Year as long as your Policy is in force and Premiums are paid up to date at the rate of
0.20% of the Fund Value in case the Fund Value is less than or equal to Rs.10 Lakhs; or, 0.30 % of the Fund Value if the Fund Value is greater than Rs.10 Lakhs.
B. Life Stage Investment ProgramThe objective of the Life Stage Investment Program is to minimize investment risk as you get closer to your Vesting Age. The exposure to Pension Equity Fund will be reduced gradually at a pre determined rate as per your chosen option. As the program is actively managed a Quarterly Rebalancing of Units will be done to offset the change in proportion of Funds due to the movement of Unit prices. The following options are available under the Life Stage Investment Program:
(a) Standard Program: Under this option the proportion of Fund Value invested in Pension Equity Fund 20 years before the Vesting Date is 60%.
(b) Aggressive Program: Under this option the proportion of Fund Value invested in Pension Equity Fund 20 years before the Vesting Date is 100%.

Switching OptionYou have the flexibility to review the performance of your Unit Linked Funds periodically and switch investments from one Unit Linked Fund to another. You can avail a total of four free switches within a period of a Policy Year free of charge. Any additional switch will be as per the applicable Charges. Switching from existing Unit Linked Fund(s) to Life Stage Investment Program and vice versa would be permitted during the Vesting Period. In such case the entire Fund value will be switched into or out of the Life Stage Investment Program.
Surrender Benefit The Policy can be surrendered provided the Policy has completed at least three full Policy Years and at least one full year Premiums being paid. The Surrender value would be Fund Value less Surrender Charges.
Benefits PayableBenefits payable on the Vesting Age: On the Vesting Age the following Benefit options are available
(a) To receive a lump sum of up to one- third of the Fund Value or such other amount as may be statutorily allowed as a tax free amount
(b) To receive a lump sum of up to one-;third of the Fund Value or such other amount as may be statutorily allowed and utilize the balance amount for purchase of Annuity under the then available Immediate Annuity Plans of the Company, or (c) To receive a lump sum of up to one-third of the Fund Value or such other amount as may be statutorily allowed and utilize the balance amount for purchase of Annuities in the open market.

Benefit payable on death of Policy Holder before the Vesting Date: In the unfortunate event of death of the Policyholder, before the Vesting Date, Fund Value shall be payable to the Nominee. If spouse is the Nominee, the Fund Value can be used in the following manner:
(a) To receive the Fund Value as a lump sum amount.
(b) Take up to a maximum of 1/3rd of the Fund Value or any other permissible amount as tax free lump sum and utilize the balance for purchase of Annuity from the Company or from the open market as per applicable Regulations.However, where the spouse is not the Nominee or if the spouse is not alive the Benefit will be paid in lump sum to the Nominee or the proving legal heirs.
Annuity Options Presently, the Company offers the following two types of Annuity options:(a) Life Annuity with return of corpus(b) Life Annuity Annuity rates are not guaranteed. If you opt to purchase Annuity with the Company, the Annuity amount will be based on the Annuity rates prevailing at the time of Vesting
Tax Benefit: Tax Benefits under the Policy are subject to conditions under Section 80C/80CCC of the Income Tax Act 1961 (‘Act’) and section 10(10A) of the Income Tax Act, 1961 (as amended from time to time). However tax laws are subject to amendment from time to time. You may consult a qualified tax advisor for specific tax related advice to you.Other Tax Implications: If required by the Act, the Company may withhold taxes from the benefits payable under this Policy. The Company also reserves the right to recover from you levies such as Service Tax or such other taxes as may be levied by the appropriate authorities on insurance transactions.

FOR FURTHER DETAIL YOU CAN CONTACT ME.

http://www.inglife.co.in/INGGoldenLife.htm

महज टैक्स बचाने का तरीका नहीं है इंश्योरेंस

2008-04-04T15:19:00.002+05:30

महज टैक्स बचाने का तरीका नहीं है इंश्योरेंसज्यादातर लोगों के लिए इंश्योरेंस इनवेस्टमेंट का एक तरीका मात्र है। लोग जीवन बीमा की एक या दो पॉलिसियां खरीदकर बाकी बातों को नजरअंदाज कर देते हैं। उनकी राय में दुर्घटना बीमा, स्वास्थ्य बीमा या घर के कीमती सामानों का बीमा कराना फिजूलखर्च है। ऐसे लोगों की यह आम दलील होती है कि अगर चुस्त-दुरुस्त हैं, तो स्वास्थ्य बीमा कराने की जरूरत ही क्या है। बीमा सलाहकारों के मुताबिक इंश्योरेंस के बारे में लोगों में ऐसी गलतफहमियां आश्चर्यजनक रूप से लगातार कायम हैं। यही वजह है कि अब भी बहुत बड़ी संख्या में लोग इंश्योरेंस के दायरे से बाहर हैं या उनका सुरक्षित बीमा नहीं हो पाया है। ज्यादातर लोगों के जहन में लंबे अर्से से इंश्योरेंस के बारे में ऐसी सोच कायम है, जिसे बदलना मुश्किल है। बीमा सेक्टर में प्राइवेट कंपनियों के प्रवेश के बावजूद लोगों की पुरानी मान्यताएं जस की तस बनी हुई हैं।

दो से ज्यादा पॉलिसियों का क्या करना
इंश्योरेंस एजेंटों के मुताबिक भले ही लोगों ने कुल मिलाकर दो लाख से ज्यादा की पॉलिसी नहीं ले रखी हो, लेकिन उनकी राय होती है कि 2 से ज्यादा पॉलिसियां लेना बेकार है। अब जरा सोचिए आज के दौरे में दो लाख की रकम कितनी अहमियत रखती है। अगर परिवार के कमाऊ सदस्य के साथ कोई अनहोनी हो जाती है, तो ऐसी स्थिति में उसके घरवालों की माली हालत क्या हो जाएगी।

इंश्योरेंस तो इनवेस्टमेंट है
हममें से ज्यादातर लोगों के लिए इंश्योरेंस या तो टैक्स बचाने का एक आसान तरीका है या फिर छोटी-छोटी जमा रकम के बदले निश्चित अर्से के बाद मैच्योरिटी के रूप में होने वाली एकमुश्त आमदनी का स्त्रोत। लेकिन असल में जीवन बीमा इन मकसदों के लिए नहीं कराए जाते हैं। इसका वास्तविक मकसद किसी अनहोनी की स्थिति में आपके घरवालों की आर्थिक मदद से जुड़ा है। मतलब साफ है कि अगर आप इंश्योरेंस को सिर्फ इनवेस्टमेंट के तौर पर देखते हैं, तो आप बड़ी भूल कर रहे हैं। ऐसे में आप वाजिब मकसद के लिए उचित प्लान को चुनने में चूक कर बैठेंगे।

हेल्दी हैं तो हेल्थ इंश्योरेंस क्यों

इंश्योरेंस से जुड़ी एक और गलतफहमी है, जो बड़ी सामान्य है। वह यह कि चुस्त-दुरुस्त लोगों को हेल्थ इंश्योरेंस कराने की कोई जरूरत नहीं होती। लेकिन सोचिए बीमारी या दुर्घटना समय बताकर थोड़े ही आती है। कब किसके साथ क्या हो जाए, कौन जानता है। और अगर ऐसा हो जाता है, तो फिर इलाज पर होने वाले मोटे खर्च से आप कैसे बच पाएंगे। कम उम्र के लोगों के लिए हेल्थ इंश्योरेंस की पॉलिसियों के लिए प्रीमियम की रकम भी काफी कम होती है। अगर आप किसी बीमारी के बाद ऐसी पॉलिसी लेते हैं, तो उसका प्रीमियम रेट बढ़ जाएगा। या फिर इलाज पर होने वाले खर्च का एक हिस्सा ही इंश्योरेंस में कवर हो पाएगा। यहां तक कि अगर कोई सीरियस बीमारी है, तो आप इंश्योरेंस से वंचित भी हो सकते हैं। ऐसे में समझदारी इसी में है कि भले ही आप स्वस्थ हों, लेकिन इंश्योरेंस से समझौता न करें।

बीमा तो फिजूलखर्च है

बीमा एजेंटों के अनुसार अक्सर लोगों का यह सवाल होता है कि जब बीमा कराने से कोई बड़ा रिटर्न नहीं मिल सकता, तो इसकी जरूरत ही क्या है। इसी के चलते साल भर के बाद लोग स्वास्थ्य बीमा, बहुमूल्य सामानों का बीमा या अन्य साधारण बीमा पॉलिसियों का रिन्युअल कराने से कतराते हैं। उन्हें लगता है कि साल भर में उन्होंने कोई क्लेम तो किया नहीं, इसलिए प्रीमियम पर चुकाए गए पैसे फालतू में खर्च हो गए। लेकिन जरा सोचिए पांच हजार रुपए का प्रीमियम देकर साल भर के लिए पांच लाख का हेल्थ इंश्योरेंस करवाना बेहतर है या फिर बगैर इंश्योरेंस के पांच लाख का खर्च सहना। हो सकता है कि बीमा न होने की स्थिति में आपको पांच लाख रुपए जुटाने के लिए भविष्य में निवेश के लिए रखी गई रकम को इस मद में खर्च करना पड़ जाता या फिर गहने जेवर तक बेचने पड़ जाते।

कंपनियां भी हैं दोषी
इंश्योरेंस कंपनियां भी लोगों को लाइफ इंश्योरेंस के आधारभूत पहलुओं के बारे में अवगत नहीं करातीं। इन कंपनियों का ज्यादा जोर यूनिट लिंक्ड जैसे अपेक्षाकृत महंगे प्लानों को बेचने पर होता है और इस वजह से जीवन बीमा के वास्तविक उद्देश्यों की अनदेखी कर दी जाती है।

जरूरत के हिसाब से चुनें प्लान
हमें से बहुतों को यह पता नहीं है कि हमारी खास जरूरतों के हिसाब से कौन-कौन से प्लान उपलब्ध हैं। उदाहरण के लिए बहुत से लोग यह नहीं जानते कि जीवन बीमा और स्वास्थ्य बीमा के अलावा हम अपने व्यापारिक प्रतिष्ठानों या लैपटॉप और टीवी सेट को भी इंश्योर्ड करा सकते हैं। समझदारी इसी में है कि हम इंश्योरेंस की जरूरतों को समझें और अपने हिसाब से सही पॉलिसी का चयन करें।

3 ways to calculate your insurance needs

2008-03-16T15:37:00.001+05:30

Calculating how much life insurance you need is one of the most important financial decisions you will ever make. It should never be an isolated decision depending only on how much of a premium you can afford.

Having said that, there are many ways in which you can determine how much insurance you need.

Here we give you a few.

Income Replacement Value

This is one of the basic methods of insurance calculation and is based on your current annual income.

Insurance needs = annual income * number of years left for retirement.

Let's say your annual income is Rs 5,00,000. And you are 45 years old with 15 more years for retirement.

In this case your insurance cover equals Rs 5,00,000 * 15 = Rs 75,00,000.

Another way in which income replacement works is to multiply the annual income by 10 (also known as Income Replacement Multiplier).

Another variant states that the Income Replacement Multiplier changes with age. So between the ages of 20-30 years, the income multiplier is 5-10, and from 30 to 40, the income multiplier is 15-20.

It drops to 10-15 between the age of 40 and 50 and further to 5-10 between 50 and 60.

Some calculations also take into account any outstanding loan amount that you may have on your housing loan, personal loan etc.

Human Life Value (HLV)

This method of calculating life insurance is based on contribution that one makes and would have made to her/his family in case of sudden demise.

So HLV is defined as the present value of all future income that you could expect to earn for your family's benefit. It also includes other value you expect to contribute, less personal expenses, life insurance premiums and taxes through your planned retirement date.

Let's see this example for better understanding.

Ram is 40 years old and plans to retire at 60. His current salary is Rs 3 lakhs and is expected to remain same every year. His personal expenses, life insurance premiums that he pays and taxes are around Rs 1.25 lakhs. His contribution to his family is rest of his salary of around Rs 1.75 lakhs.

Here, Ram's Annual Life Value (his economic contribution to his family post his expenses) is Rs 1.75 lakhs.

Suppose Ram dies at 41, then the economic value (namely Rs 1.75 lakhs) he would have added every year (from age 41-60) to his family is no longer there. So to protect this economic value, Ram can use life insurance as a safety valve so in case of his death, this economic value can come to the family.

Gross Total Income: Rs 3 lakhs

Less Self - Maintenance Charges: Rs 1 lakh

Tax Payable: Rs 10,000

Life Insurance Premium: Rs 15,000

Surplus Income Generated for Family: Rs1.75 lakhs

If this surplus income is capitalised at a discount rate (expected return rate) of 8 per cent per annum for 20 years, then the HLV will be = Rs 175,000*10.6 = Rs 18.55 lakhs.

In short, Human Life concept arrives at an estimate of insurance cover required as on date to protect the income earners' economic value to their families including their future earning potential and capacity.

This multiplier 10.6 above can be calculated using the Present Value Function in an Excel spreadsheet.

Go to excel spreadsheet; click on Insert tab; click on the 'Function' option; select function PV (that is the present value of your investment; it gives the total value of a series of future payments that is worth today).

A box opens up where in you can fill in the above values for rate (8%, that is the return one can expect over the next 20 years), period (20, assuming you will make payments for the next 20 years) and pmt (payment made every year and which cannot change during the next 20 years) and Type (a logical value which should be 1 at the beginning of the period; it becomes 0 at the end of the period, that is, at the end of 20 years).

Rate = 8 %

Period: 20 Years (Age 41-60)

Pmt: Rs 1 will give you this multiplier. If you put Rs 1.75 lakhs here it will give you the value of Rs 18.55 lakhs

Needs Analysis

In this method, you can assess your needs -- and the needs of your loved ones -- and make a calculated assessment.

The most critical factors are the number of dependents you have and their needs.

Other major factors to consider are:

Loans
Kind of lifestyle you want to provide to your family
Provision for non-working spouse who would no longer get an income
Child's education
Child's marriage
Providing for financially dependent parents
Special needs
Dreams and aspirations such as contributing to charitable causes

Once you determine the above factors, you run the following calculations:

1. Lump sum needs on Life to be Insured's death

a. Home loan payoff

b. Car loan payoff

c. Child's education

d. Child's marriage

e. Emergency fund post death

2. Monthly income needs

a. Monthly expenses

b. Income of Living spouse in case she earns, or rent or interest

c. Shortfall = (a-b)

Shortfall is a-b. Suppose, expenses are Rs 50,000 and spouse's income is Rs 30,000 post tax, then shortfall is Rs 20,000 (50,000-30,000).

d. Monthly income needs till child turns 21 or is self-sufficient:

e. Number of years to go: For the child to reach 21 and post that for the spouse till her age of 80 or 90 years

f. Annual income needs: Of spouse, children or dependents

g. Total income needs: Of spouse, children or dependents

3. Sum up the current invested assets and current life insurance cover. Now see how much this total differs by what you have calculated above. This will be the shortfall (considering that you die today) that you will need to get covered. But do note that invested assets exclude residence, car and other personal assets.

Picking the right one

The one that I prefer and is mostly followed by reputable financial planners for decades is the Needs Analysis Method. Once you determine the amount of life insurance need, just buy the lowest cost insurance plan that's available to you.

You should buy insurance after a thorough calculation of capital (lump sum needs on death such as paying off a loan, daughter's marriage or education) as well as the income needs of your family after you are gone.

Ask yourself: If something were to happen to you, what kind of corpus would your family need to maintain their current lifestyle, to fund your child's education as you had envisaged, retirement income for your wife etc.

Most middle-class individuals have insurance policies in the range of Rs 1,00,000 to Rs 10 lakhs. Some of the wealthier ones have more than this.

The question they need to answer is: How long would Rs 10 lakhs suffice?

Finally, remember that your insurance needs go down over a period of time. Hence if you find yourself with a sudden windfall or have accumulated enough wealth, then you can evaluate the need to altogether terminate your insurance policy.

2008-03-01T12:11:00.000+05:30

Traditionally, individuals have often considered life insurance a priority while structuring a financial portfolio. While having life insurance is very essential, it is also important that insurance be bought for the right reasons.

This article deals with four wrong reasons for which life insurance products are being bought today:

1. Treating life insurance as a savings avenue

Over the years, life insurance has been bought primarily for two reasons- tax saving and investments. Unfortunately, providing for life cover usually takes a back seat. While the 'tax saving reason' does hold good for individuals, conventional endowment type life insurance policies don't quite make for an attractive 'investment' avenue.

With a lower interest rate regime in place, the heady days of attractive and assured returns on life insurance policies are behind us. Going forward, the returns on insurance policies will depend on how well the insurance company manages its finances.

Our view is that life insurance should 'strictly' be bought for what it was always intended to do - indemnify the nominees in case of an eventuality. It is precisely for this reason that we believe that all individuals should have a term plan in their insurance portfolio, irrespective of their profile.

To take care of the investments and the 'tax-saving' element, individuals can consider investing in tax-saving mutual funds and NSC/PPF. Unit linked insurance plans (ULIPs), which can invest up to 100% of the premium in market linked instruments, is also an option, which individuals can opt for.

2. Trusting your life insurance agent/advisor completely

Before insuring yourself, ensure that you have done your homework well. Nowadays, it is 'normal' for sales pitches to be aggressive. Insurance agents many a times, sell life insurance products without adequately understanding or paying heed to the individual's profile and his actual needs.

For instance, how can one explain the absence of term plans in most individuals' life insurance portfolios in spite of the same being the cheapest form of insurance? Or for that matter, why have individuals with a low risk appetite invested in high risk ULIPs?

Remember, life insurance isn't so complicated that you should feel the need to leave the entire life insurance solution on your agent. Get involved. Probe. Enquire. Ask questions. And here's some food for thought: the IRDA stipulates that individuals wanting to become life insurance agents only need to have passed their 12th standard examinations for them to get accredited as agents.

If your financial portfolio is being structured 'entirely' by such individuals, you can well imagine where your finances are headed.

3. Considering life insurance as a one time activity

Individuals perceive life insurance as a one-time activity. Evaluating life insurance needs is an activity that must be conducted on an ongoing basis.

For example, while an individual may have bought say, a term plan while he was young and had just begun his career, his insurance cover certainly needs to increase after marriage or after a change in lifestyle. Another example- the need for child insurance plans will be felt only after marriage.

4. Buying the wrong product

This is one of those 'mistakes', which individuals seldom realise. A classic example is that of individuals buying the accidental death cover as a rider alongwith their regular policy like say, a term policy.

While buying this cover, individuals need to ask themselves one question: Am I going to need any 'extra insurance cover' due to 'death by accident'?

Another example is that of individuals buying high-risk ULIP policies while what they really need is a term plan or regular endowment type plans. Many individuals have 'bought' ULIPs without really understanding the product's risk-return proposition or how ULIP expenses pan out.

Individuals need to understand that ULIPs are unlike conventional life insurance products. ULIPs need to be understood well before they can form a part of any financial portfolio.

28 हजार लोगों का होगा माइक्रो बीमा

2008-03-01T12:09:00.000+05:30

28 हजार लोगों का होगा माइक्रो बीमा

देहरादून, जागरण संवाददाता : उत्तराखंड में प्रशासन के सहयोग से भारतीय जीवन बीमा निगम (एलआईसी) मार्च तक गरीब परिवारों के 28500 लोगों का माइक्रो बीमा करेगा। इसके लक्ष्य को पाने के लिए शासन के सूक्ष्म वित्त विभाग और एनजीओ प्रतिनिधियों के साथ शनिवार को एलआईसी के हरिद्वार रोड स्थित मंडल कार्यालय में बैठक का आयोजन किया गया। बैठक में एलआईसी के वरिष्ठ मंडल प्रबंधक केके झा ने बताया कि भारत सरकार की पहल पर एलआईसी की ओर से गरीब परिवारों (गरीबी रेखा से थोड़े ऊपर वाले) को आर्थिक सुरक्षा कवच देने के लिए विशेष माइक्रो बीमा योजना जीवन मधुर बनाई गई है। 18 से 60 वर्ष उम्र वाले के लिए करीब 100 रुपये मासिक किस्त वाली यह ऐसी योजना है, जिसमें उम्र बढ़ने पर किस्त की रकम में बढ़ोतरी नहीं होती। पांच व 15 वर्ष अवधि वाली इस योजना में अधिकतम बीमा धन 30 हजार रुपये हैं, जो बोनस सहित वापस होगा। बैठक में उत्तराखंड के सूक्ष्म वित्त विभाग के प्रबंधक सुभाषचंद्र लकचोरिया और एलआईसी के प्रबंधक (विपणन) ए.के. झा ने एनजीओ प्रतिनिधियों को इस बीमा योजना के लाभ को गरीबों तक पहुंचाने से संबंधित जानकारी दी। बैठक का संचालन एलआईसी के उप प्रबंधक टी.एस. रावत ने किया और अंत में मैत्री की सचिव गीता डोबरियाल ने धन्यवाद ज्ञापन किया। बैठक में उर्वशी, अजय शक्ति, बागवान, गढ़वाल ग्रामोदय, कुंवरी मानव संस्थान, हाकसी, गढ़ जागृति संस्थान आदि स्वयंसेवी संगठनों के प्रतिनिधि मौजूद थे।

9 great ways to reduce tax burden

2008-03-01T12:05:00.001+05:30

9 great ways to reduce tax burden

One of the most common questions by all is: what should I buy to milk the tax breaks that I am legally allowed? So here is a guide to the deductions you can use apart from the popular section 80C Rs 1-lakh deduction.
Look beyond section 80C cut your tax burden further. Remember, you will have to spend under a specific head to claim these sweet little tax breaks. Charity, education loans and medical bills; all qualify for a tax break.

1. 80C
Qualifying products: NSC, notified bank deposits and post office time deposits, EPF and PPF, ELSS, life insurance plans, deferred pension plans
Mandatory requirements: Payment has to be made before 31 March 2008
Who can avail the deduction: Individuals and HUF (both resident and non-resident)
How much: Cannot exceed Rs 1 lakh.

2. 80CCC
Qualifying products: Pension plans of life insurers
Mandatory requirements: Payment has to be made before 31 March 2008
Who can avail the deduction: Individuals
How much: Within the overall limit of Section 80C (up to Rs 1 lakh)

3. 80D
Qualifying products: Medical insurance policies taken for self, spouse, dependant parents or children, or any member of HUF
Mandatory requirements: Premium should be paid through a cheque out of income chargeable to tax
Who can avail the deduction: Individuals, HUF
How much: Up to Rs 15,000; senior citizens can claim up to Rs 20,000

4. 80DD
Qualifying products: Expenses on the medical treatment of a dependent who is a person with a disability
Mandatory requirements: Certification by a medical authority
Who can avail the deduction: Resident individual or HUF
How much: Up to Rs 50,000, or up to Rs 75,000 if the dependant is a person with severe disability

5. 80DDB
Qualifying products: Expenses on the medical treatment of a specified disease (cancer, AIDS, neurological diseases, chronic renal failure and more)
Mandatory requirements: Certificate in Form No. 10-I to be submitted along with the income tax return form. Deduction is available if the amount is actually paid for treatment
Who can avail the deduction: Resident individuals or HUF
How much: Rs 40,000 (if the person treated upon is less than 65 years of age), or Rs 60,000 (if the age of the person treated is 65 years or more)

6. 80E
Qualifying products: Payment of interest on loan taken for higher studies
Mandatory requirements: Deduction is available in the year in which repayment starts and only for eight immediately succeeding assessment years
Who can avail the deduction: Individuals
How much: Deduction available on the total interest portion of education loan, the principal repayment gets no tax advantage

7. 80G
Qualifying products: Donations to certain funds and charitable institutions
Mandatory requirements: Not applicable
Who can avail the deduction: Resident individuals or HUF
How much: 50 or 100 per cent deduction on the entire donated amount, or 50 or 100 per cent deduction subject to 10 per cent of gross total income

8. 80GG
Qualifying products: Rent paid for residential purpose
Mandatory requirements: Should not be getting house rent allowance. Actual rent paid is in excess of 10% of the total income
Who can avail the deduction: Self-employed or salaried
How much: Excess of actual rent paid over 10 per cent of GTI, or 25 per cent of GTI, or Rs 2,000 per month, whichever is the lowest

9. 80U
Qualifying products: Expenses incurred on self, if disabled
Mandatory requirements: Certification by a medical authority to be furnished along with the income tax return form
Who can avail the deduction: Resident individuals
How much: Rs 50,000 for a person with disability, Rs 75,000 for a person with severe disability (disability of over 80 per cent)

ING GUARANTEED GROWTH,

2008-02-01T12:02:00.001+05:30

ING launching its new policy - ING GUARANTEED GROWTH,
This policy is for limited period and may be closed any time during february 2008 when company get its target completed.

some facts abt it:

* single premium policy-minimum premium 48000.00
* allocation charges on it 4%
* lockin period for 10 year or 15 year,
* risk cover 1.25 time minimum or five time maximum of annual premium,
* surrender charges ,after 3rd year- surrender charges 5% of fund value, after 5th year-3% of fund value,

What is ULIPs,

2008-02-01T12:01:00.001+05:30

यूलिप में निवेश करें, मगर बारीकियां समझ कर

शेयर मार्केट और दूसरे पूंजी बाजारों में तेजी को देखते हुई निवेशकों में यूनिट लिंक्ड इंश्योरेंस प्लान यानी यूलिप को लेकर काफी उत्साह देखने को मिल रहा है। जब आप यूलिप पॉलिसी लेते हैं, तो इसमें निवेश किए गए आपके पैसे का एक हिस्सा पूंजी बाजार में निवेश किया जाता है और दूसरे हिस्से से लाइफ कवरेज होता है। एक्सपर्ट की राय में यूलिप से बेहतर रिटर्न हासिल होते हैं, लेकिन इनका स्ट्रक्चर थोड़ा कॉम्प्लेक्स होता है। ऐसे में निवेश करने से पहले इसके हर पहलू के बारे में जान लेना बेहद जरूरी है।

यूलिप क्या है?
यूलिप यानी यूनिट लिंक्ड इंश्योरेंस प्लान। इसमें किए गए निवेश का एक हिस्सा आपकी चुनी हुई योजना में लगाया जाता है और दूसरा हिस्सा आपका इंश्योरेंस कवर करता है। अमूमन आप इंश्योरेंस का जो भी प्रीमियम अदा करते हैं, उसका पांच-छह गुना तक की रकम का जीवन बीमा कवर किया जाता है। ज्यादातर यूलिप योजनाएं तीन साल की लॉक-इन अवधि की होती हैं।

इंश्योरेंस कवर के अलावा जो निवेश किया जाने वाला हिस्सा होता है, उसमें कई इनवेस्टमेंट ऑप्शन होते हैं। किसी में पूरा पैसा इक्विटी यानी शेयर बाजार में निवेश किया जाता है। सुरक्षित निवेश योजना के तहत इक्विटी और ऋण बाजार में निवेश का अनुपात 70 और 30 होता है, जबकि बैलेंस्ड प्लान में इनमें 50-50 का निवेश अनुपात होता है। हालांकि पॉलिसी लेने वालों को एक प्लान से दूसरे प्लान में जाने का विकल्प रहता है, लेकिन ये सीमित होते हैं।

यूलिप से जुड़े ऊपरी व्यय
अमूमन पहले साल आप जितना प्रीमियम देते हैं, उसका एक हिस्सा काटकर ही निवेश किया जाता है। मान लीजिए पहले साल आपने 50,000 रुपये का प्रीमियम भरा, तो आपकी जो राशि निवेश के लिए जमा होगी, उसका हिसाब कुछ इस तरह बनेगा।

प्रीमियम राशि- 50,000 रुपये
एंट्री लोड -5 फीसदी- 2,500 रुपये
फंड मैनेजमेंट शुल्क- 7.5 फीसदी - 3750 रुपये
एडमिनिस्ट्रेशन चार्जेज-240 रुपये
मॉर्टलिटी चार्ज- 140 रुपये
कुल लागत- 6,630 रुपये
वास्तविक निवेश राशि -50,000 -6,630 रुपये
43,370 रुपये

( इस उदाहरण में 50,000 रुपये प्रीमियम है और बीमा 2.5 लाख रुपये का है)

यूलिप की बारीकियां
चूंकि यूलिप का एक हिस्सा शेयर मार्केट या दूसरे पूंजी बाजारों में निवेश किया जाता है, इसलिए जैसे ही आपके पैसे से खरीदे गए शेयरों और यूनिटों के दाम गिरने लगते हैं, आपका रिजर्व कम होने लगता है। अब अगर इसमें इतना पैसा नहीं बचा है कि आपकी प्रीमियम राशि कवर हो सकती है, तो प्रीमियम का भुगतान नहीं होता। आपसे प्रीमियम भरने को कहा जाता है। अगर आप ऐसा नहीं कर पाते, तो आपका बीमा कवर खत्म हो सकता है। दूसरे इसमें परंपरागत इंश्योरेंस पॉलिसी से मिलने वाले छह से आठ फीसदी तक के रिटर्न की भी गारंटी नहीं होती।

एजेंट जो नहीं बताते
ज्यादातर एजेंट साल दर साल लगने वाले चार्जेज के बारे में नहीं बताते। यूलिप से आप तीन साल बाद पैसे निकाल सकते हैं। प्रीमियम का भुगतान भी आपके फंड में जमा रकम से होता रहेगा। लेकिन अगर आपके फंड में इतना पैसा नहीं है कि मॉर्टलिटी चार्ज जमा किया जा सके, तो आपका इंश्योरेंस खत्म हो सकता है। अमूमन एजेंट ग्राहकों को इसकी जानकारी नहीं देते।

मुआवजा
अगर बीमा पॉलिसी लेने वाले व्यक्ति की मौत हो जाती है, तो यूलिप पॉलिसी धारक को इंश्योर्ड रकम यानी सम इंश्योर्ड या यूनिटों के बढ़ने या घटने के बाद फंड में जमा कुल रकम में से जो भी ज्यादा होगा मिलेगा। यूलिप की बहुत कम ऐसी पॉलिसियां हैं, जिनमें सम इंश्योर्ड और फंड रकम दोनों का भुगतान किया जाता है। एक्सर्पट्स का कहना है कि ऐसे हालात में पारंपरिक लाइफ इंश्योरेंस, टर्म इंश्योरेंस पॉलिसियां या फिर सीधे म्यूचुअल फंड में निवेश ज्यादा अच्छे विकल्प हैं।

बाजार में यूलिप प्रॉडक्ट
मार्केट में लगभग पचास तरह के यूलिप प्रॉडक्ट हैं। आप इनमें से अपनी सुविधानुसार चुनाव कर सकते हैं। हालांकि अलग-अलग यूलिप प्रॉडक्ट आपकी अलग-अलग जरूरतों को पूरा करने का दावा करते हैं लेकिन ये कमोबेश एक ही तरह के होते हैं। चाहे वे चिल्ड्रन प्लान हों या फिर बोनस वाले प्लान सभी एक जैसे होते हैं। हां, निवेशक को जो पैसा मिलता है उसके भुगतान का ढांचा अलग-अलग होता है। ऐसे प्लान में आप लॉक-इन पीरियड के बाद पैसे निकाल सकते हैं।

यूलिप पॉलिसी खरीदने से जुड़ी सावधानियां
पॉलिसी एनएवी पर न जाएं। पॉलिसी से जुड़े फंड का ट्रैक रिकॉर्ड देखें। आपका एजेंट चाहे जितना जोर डाले, पॉलिसी के बारे में पूरी जानकारी लिए या फिर ऑफर डॉक्यूमेंट की बारीकियां समझे बिना निवेश न करें। अगर आपको ऑफर नहीं जंचता, तो बेहतर है कि आप यूलिप के बदले एसआईपी के जरिये म्यूचुअल फंड में निवेश करें।

यूलिप एक नजर में
निवेश राशि - निवेश की कोई सीमा नहीं
पॉलिसी से जुड़े खर्च - कोई ऊपरी सीमा नहीं। यह खर्च इंश्योरेंस कंपनी तय करती है।

टैक्स में छूट: आयकर की धारा 80 सी का कर छूट लाभ सभी यूलिप पॉलिसी को मिलता है।

source: http://navbharattimes.indiatimes.com/articleshow/2738009.cms

Circular of IRDA wef 01-02-2008

2008-02-01T11:59:00.000+05:30

To
All Life Insurers

Sub: Benefit illustrations for Unit Linked Products

Please refer to our earlier letter dated No.2/IRDA/ACTL/DC/
2007-08 dated 17th December, 2007, requesting comments on the
captioned draft circular. We are thankful to those who were kind
enough in sending their responses.
The purpose of this circular is to provide the prospect /
policyholder all relevant information regarding amounts deducted
towards various charges for each policy year so that the prospect
/ policyholder can take an informed decision. The present step
will no doubt pave the way towards standardizing the disclosures
which would result in greater transparency and enhanced
policyholders’ confidence. You all will agree that this is crucial
at this hour as unit linked products are assuming significant share
in the total portfolio. In this context, the following are to be
ensured:
a) Life insurance companies are required to confirm to the
format (Table-A) enclosed which lists out all charges to
be paid and also the amount available for investment in
each policy year.
b) Information specific to the particular policy holder only
shall have to be used.
c) Insurers must also give figures separately in a table about
guaranteed benefits and non-guaranteed benefits for
each policy year (Table-B) keeping in view the interest
rates as specified by the Life Insurance Council’s circular.
At present the interest rates used for benefits illustration
are 6% p.a. and 10% p.a. respectively. This table (Table-
B) is already in practice.
d) The policy holder must sign both Table-A and Table-B
along with the sales person on the day when he she
signs the proposal form. These tables shall become part
of policy document and a copy must be sent to the policy
holder along with the policy document.
e) The circular is applicable to all unit linked products (both
new and existing) and shall come into force with effect
from February 1, 2008.

Be aware

2008-01-11T15:44:00.000+05:30

As the season for tax saving is on, Beware of taking ULIPs plan. Get the complete detail of allocation charges from Advisor for every plans.

Which insurance product should you buy?

2008-01-06T16:52:00.000+05:30

The life insurance industry has come a long way since 2000, when private companies were allowed in. Today, there are over 500 products (over 3,000 with customisation options), and 16 companies to choose from. So how do you pick the one that suits you best?

Typically, your needs would be any or all of protection, wealth accumulation, wealth maintenance and retirement. A few basic products meet these needs.

*Pure Term Insurance. In this, an amount is paid out in the event of the death of the insured within a specific term, say 20 years. This is the most basic and cheapest life insurance.

*Endowment Insurance. In this, an amount is paid out in the event of the death of the insured within a specific term, say 20 years. If the insured survives the policy term, an amount is also paid to him.

*Whole Life Insurance. This is similar to endowment, except that the term is whole life.

*Riders. These are options that can be taken along with the product you buy and provide protection against additional contingencies such as disability or dreaded diseases for a nominal extra charge.

So, how can these products help you plan for your needs?

Protection needs include protection against death, disability, and dreaded diseases. Products that are suitable for this need are term or whole life insurance with riders like critical illness, waiver of premium (WOP) or accidental death benefit (ADB). Wealth accumulation needs include saving for children's education, marriage and/or getting them settled. It also includes saving for one's retirement. Suitable products in this category are endowment, money back and whole-life plans.

Wealth maintenance need arises when you have accumulated some money and want to protect and grow it in a tax-favoured manner. Short-pay endowments, pensions, single premium policies or dump-ins cater to such a need.

Retirement need arises when an individual reaches a stage in life when he does not anticipate future inflows, but has to provide for a regular inflow out of the funds he has accumulated, without any worry. You could consider single pay/short pay pensions or immediate annuities for this. A flexible unit-linked endowment, structured with regular partial withdrawals could also be suitable.

Once you understand your need and the suitable products on offer, you have to decide whether to buy a unit-linked or a traditional policy. Traditional plans would generally have guarantees over the long term and, hence, are unique among financial products. Instead of working with projections or illustrations, you would have assured cash flows in your financial plan.

So, once you have decided on the need, the product and the mechanism, ensure the following before you sign on the dotted line:

1. Understand clearly how the suggested product fits your need.

2. Understand which part of the amount is guaranteed and which is not. This is required to be illustrated as per the regulator.

3. Do not accept illustrations based on historical returns of a fund; they do not guarantee future returns. The regulator has prescribed that the illustrations be shown at 6 per cent and 10 per cent annual rate of return and though, in reality, the return could be much more than this, it is best to use these figures as guides for your financial plan.

A guide to buying Ulips for your kids

2007-12-28T11:32:00.000+05:30

Sure, we all want to make our children's future secure. But how we go about it differs. While some macro-vision people use less plastic and water so that the earth survives the kids, the rest of us try and buy financial security.

The way we do it again differs. Some buy plots of land, some invest in gold, yet others in shares or funds. A popular way has been to buy an insurance policy.

One thing that works in the favour of a child plan using an insurance policy is that the money is clearly earmarked for the use of the child at a target date for a particular purpose, be it education or marriage.

In case of the parent's death, the sum assured is immediately paid to the family and the insurer pays the remaining premiums on behalf of the parent. This way, the child's needs are taken care of in case of the parent's death. Moreover, the child gets another lump sum at the desired age.
Sure, a high-value term plan can take care of the child's future, but there is the real danger of the money getting used for some other purpose in the hands of an inefficient nominee of the policy.

How is it different

A kids' plan costs more than any other alternate approach, but does assure you of money in the future for your child, even if you are not there to take care of the premiums along the way.
For example, an endowment life insurance plan would cost about Rs 23,500 for a sum assured of Rs 5 lakh for a 30-year-old over a term of 20 years. In contrast, a child insurance plan for the same age, term and sum assured, will cost about Rs 24,000.

In both cases, the sum assured is paid on the death of the policyholder, but in a child plan the policy wouldn't terminate after that.

There can be two variants of children's plansendowment plan and unit-linked plan. In the first variant, staggered payments are made to your child at different ages.

For example, 20 per cent is paid when he turns 21, 20 per cent when he is 24 and the remaining 60 per cent when the policy matures. In the second variant, one may choose to get a lump sum amount at the desired age.

In the past year, we have written several times on what kind of child plans there are in the market and who should buy them. The story in this issue will talk about how you should choose a kids' plan.

Which one to buy

If you are sure you need a kids' plan, the obvious question is which one to buy. There are numerous plans in the market and the number is steadily growing.

With kids' plans constituting the maximum number of the total plans sold, they are obviously one of the best sellers for the insurance companies. So, expect more in the market soon.

Insurance: Ask the right questions

2007-12-22T16:03:00.000+05:30

Insurance: Ask the right questions

As we enter the peak tax-saving season, you will notice an increase in advertisements related to tax-planning products. Expect an escalation in the noise surrounding tax-saving products like life insurance and mutual funds. These advertisements will almost certainly be followed up by persistent calls from telemarketers, not to mention personal visits from your friendly neighbourhood insurance agent. So as an investor you are likely to be very busy over the next few months dealing with people who will be going all out to make you buy what fetches them the highest commission, in this case life insurance.
Being financial planners, we have observed that salaried individuals are primarily concerned, more than anything else, about tying up their tax-planning in time to meet the deadline set by the employers. They don't dwell too much on the instruments that must form part of their tax-saving kitty; their objective is getting the tax-planning out of the way as soon as possible so that they can get on with their work as usual.
While we empathise with the salaried individual's focus on his work, we believe there is a case to treat tax-planning as more than a mere distraction. For one, it's the investor's hard-earned money; so treating it like someone else's business is not a very healthy attitude. Since it's his money (or your money if you happen to be that salaried individual) it's only natural to treat the money as sacred and ask a lot of questions before taking an investment/insurance decision. If they find themselves constrained for time, then they must begin the tax-planning exercise a little earlier, which is what we have been advocating to our clients for several years now.
Since a lot of noise that you will be hearing over the next few months will revolve around life insurance, particularly of the now-very-familiar ULIPs (unit linked insurance plans) variety, you must be armed with the right kind of background knowledge. This will help you pose the right questions to the telemarketer and/or counter the insurance agent's sales pitch.

GIFT AND CHILDREN POLICY

2007-11-24T12:57:00.000+05:30

Can I gift a policy?

Yes. By contacting the insurance company you can make an absolute assignment of the policy. The person to whom you assigned it, then becomes the owner. You should check with your tax advisor to find out if the gift makes you responsible for paying gift taxes

Should I buy life insurance on my children?

If you have extra money, and want to give them a base of life insurance to “start them off”, it is okay. Otherwise your life insurance can be better spent for adequate coverage on the person who brings in income to support the family.

How is cost determined?

2007-11-24T12:56:00.000+05:30

How is cost determined?

The cost of life insurance is determined by the insurance company’s actuaries who take the following into consideration:

1. Mortality cost, or the cost of paying claims to the beneficiaries of insured people. Mortality costs for most insurance companies have declined in recent years because people in the United States have been living longer. This means there is a longer period to collect premiums and death claims are being paid out later than originally anticipated. Still companies must be careful to select new policyholders who are basically healthy, and they should charge rates which reflect the actual mortality risks of those people who have serious health problems or who engage in potentially dangerous activities. Otherwise, they might have higher than expected costs for death claims, which could cause financial difficulties for them.

2. Operations cost, the cost of operating the insurance company and selling its products. These costs includes marketing costs (commissions; costs of operating sales offices; advertising expenses; etc.), and non-marketing costs (the cost of constructing and maintaining company buildings; salaries of officers and staff; etc.).

3. The return on investments. Insurance companies invest money until they need it to pay claims or expenses. If they can earn good investment returns, this will help to pay some of their expenses and reduce the cost of insurance. They will then be able to sell policies at lower premiums and compete more effectively against other companies.

The overall effect of all these factors determines how much the company needs to charge in order to provide life coverage while making a profit and paying dividends to its policyholders, if it is a mutual insurance company. Several large mutual insurance companies have recently changed to stockholder owned companies through a process called demutualization. In stockholder owned companies, dividends are paid to the stockholders.

SOME FACTS

2007-11-24T12:55:00.000+05:30

LIFE INSURANCE

Why do we need life insurance? Well, the fact is, we don’t all need it. But if you have a family or people who depend on your income, it is definitely something you should consider buying in order to protect your loved ones. Life insurance can be difficult to grasp due to the different types that are available.

Do I need life insurance?

You need life insurance if some person would experience a significant financial loss in the event of your death. A common example of this is the family breadwinner whose income totally or partially supports a family. The death of that person would result in loss of income and financial harm for the remaining family members. Other reasons are to put your kids through school, pay the car note, mortgage, or other debts you have left behind, and pay funeral expenses.

Why buy life insurance?

Some reasons to buy life insurance are:

1. Income Replacement

2. Funeral Expenses

3. Pay Off Debts

4. Pay Off Medical Bills

5. Mortgage life insurance

What are ULIPs

2007-11-03T12:01:00.000+05:30

What are ULIPs?

Unit linked insurance plans (ULIPs) are insurance plans that combine the benefit of investment with insurance. They give the investor an option to put a part of their premium in various investment portfolios and the portfolio will then grow depending upon the performance of the assets that they hold. The important thing is that the benefits at the end of the plan depend upon the performance of the portfolio where the premium is invested.

How do you track them?

Just like you see the performance of mutual fund schemes by looking at their net asset value (NAV) and their growth, one has to look at how the NAV of the ULIP plans have moved and the returns they show. This will ensure that the investor knows how his investment is performing. Insurance companies now declare their NAV regularly with several schemes declaring it on a daily basis.

What does the movement depend on?

The movement of the NAV of the plan will depend upon the composition of the assets of the plan. This means that equity options or growth options in the ULIP plans will show a different movement as compared to a conservative option or a debt portfolio. The nature of the plan and the investment will determine the way in which the performance is witnessed. Investors can make their investment choice based upon the features of a plan as well their objectives and risk taking ability.

Switch options?

A choice is available for investors to switch between various options. By looking at the performance of their particular option they are able to make the right decision in an effective manner as they can balance the risk along with the kind of returns that they would like from their investments.

2007-11-01T16:27:00.000+05:30

HDFC'S YOUNG STAR :
ALLOCATION: 40%
CHARGE : 60%

BIRLA'S FLEXI LIFE:
ALLOCATION: 35%
CHARGE : 65%

HDFC'S ENDOWMENT PLUS
ALLOCATION: 40%
CHARGE: 60%

ICICI'S LIFE TIME PLUS
ALLOCATION: 75%
1ST YEAR CHARGE: 25%
2ND YEAR CHARGE: 25%

Policy - ING LIFE PLUS

Allocation Rate

Year Allocation %
1 83%
2 88%
3 95%
4 95%
5 95%

6th onwards 100%

Top Up 99%

This is the policy from ING Vysya Life Insurance, You can compare it with all the ULIPs of all the companies.

Only 17% charges, amazing,

Thats why ING LIFE PLUS is best policy for customer,

Ulips: How IRDA is passing the buck

2007-11-01T16:26:00.001+05:30

Ulips: How IRDA is passing the buck

Has the Insurance Regulatory and Development Authority of India finally woken up to all the mis-selling that is happening? Well, it would like us to believe it has. But the truth of the matter is that it hasn't.

IRDA has thought of a new way to prevent the mis-selling of Unit Linked Insurance Plans (Ulips).

From now on, individuals investing in a Ulip, will have to sign a one-page document. This document will say that the individual is satisfied with what the agent has communicated and that buying the Ulip has been an informed choice.

Under Section 80C of the Income Tax Act

2007-10-31T15:57:00.000+05:30

Under Section 80C of the Income Tax Act, investments into a Ulip can be claimed as a deduction from taxable income up to a maximum of Rs 1 lakh (Rs 100,000). But there is a slight catch to this, which most insurance companies do not tell you when they sell their insurance policies or is usually buried in the fine print.

As per subsection 3 of Section 80 C of Income Tax Act, a deduction is available only to so much of the premium which is not in excess of the 20% of the actual sum assured on the policy.

Lets try and understand what this means through an example of an individual who takes up a single premium insurance policy for Rs 1 lakh. He hopes that he will get the entire tax deduction of Rs 1 lakh, as is allowed under Section 80 C.

A Ulip has both investment and insurance features. A part of the premium is invested and another part goes towards paying the mortality charge for the insurance cover that an individual taking an Ulip receives.

As per current norms set by the nation's insurance sector regulator, the Insurance Regulatory and Development Authority, the minimum sum assured (the insurance cover that you have) in case of a single premium insurance policy, has to be 125% of the premium paid.

So if the premium paid is Rs 1 lakh, the minimum sum assured has to be Rs 1.25 lakh.

Now let's go back to what the subsection 3 of Section 80 C of Income Tax Act. It clearly points out that a deduction is available only to so much of the premium which is not in excess of the 20% of the actual sum assured. In this case, the single premium of Rs 1 lakh is 80% of the sum assured of Rs 1.25 lakh.

Hence, a tax deduction will not be available to an entire amount of Rs 1 lakh. A tax deduction of Rs 25,000, which is 20% of the sum assured, can be made.

They sell you what you don't want

2007-10-27T12:00:00.001+05:30

They sell you what you don't want

Mis-selling (Selling insurance products without understanding your needs) is rampant and whether you are a newborn or a 60 year old, insurance will be the first product sold to you.

Selling insurance is a business and you better understand what's under all their sweet talk and projects.

Don't mix insurance with investment. They are two separate decisions having different impacts on your life.

Generally insurance is sold through friends, and family and hence there is a social obligation to buy the policy. So even if you have to honour a social obligation, buy a term plan.

What your insurance agent will never tell you

2007-10-27T11:58:00.000+05:30

What your insurance agent will never tell you

Data from the Insurance Regulatory and Development Authority of India, the insurance regulator, suggests that 90 per cent of the insurance sold by the private insurance companies during the last financial year (April 2006-March 2007) were Unit-Linked Insurance Plans.
A Ulip has, both, investment and insurance features. A part of the premium is invested and another part goes towards paying the mortality charge for the insurance that an individual taking a Ulip receives. This two-in-one feature is one of the reasons for the popularity of this product.

The other major reason being the high upfront commission offered to insurance advisors selling the product. This leads to insurance advisors pushing Ulips more than other insurance products like term insurance.

Let us say an investor takes a 20-year Ulip. Every year he has to pay a certain premium. In the first year, 15-71 per cent of the premium can be deducted as a premium allocation charge, depending on which insurance company the individual goes to.

What this means is that if an individual decides to pay a premium of Rs 50,000 and the premium allocation charge for the first year is 30 per cent, then only Rs 35,000 will be invested. The remaining Rs 15,000 the insurance company will recover as a premium allocation charge.
The majority of this will be passed onto the insurance agent. When you compare this to the around 2-4 per cent a mutual fund agent makes on selling a new scheme, this is fantastic.

Try buying a simple term insurance policy from an insurance advisor. For those individuals who already have an investment plan in place through mutual funds, it does not make sense to buy a Ulip. But at the same time they do need insurance and term insurance policy which simply insures an individual for a certain amount for the period of the policy, is their best bet.

If the policy holder dies during the period of the policy, his nominee will get the amount for which the individual is insured, if he survives the period, he does not get anything.

Most Indians look at insurance either as a mode of tax saving or investment. Hardly anyone looks at insurance for the sake of insurance. Given this, most do not like to take on a term plan, as they do not get any money if they survive the period of the term plan.

Using this fact as a selling point, an insurance advisor usually tries to dissuade any individual from taking a term insurance policy. The main reason though is that the premiums to be paid in case of term insurance policies tend to be very low.

Also a lot of private insurance companies run contests for their insurance advisors. These contests have expensive cars, foreign trips, etc., as prizes. Insurance advisors are eligible for it only if they manage to generate a certain amount of new business for the company.

If insurance advisors are to get anywhere near having a chance of winning these contests, they can never get there by selling low premium term insurance policies. They have to sell Ulips to be eligible for prizes that these contests offer. Some insurance companies do not consider term insurance policies sold for these contests.

ING LIFE PLUS

2007-10-20T12:55:00.000+05:30

NEW POLICY FROM ING VYSYA LIFE INSURANCE:

ING LIFE PLUS:

DEAR FRIENDS,

IT GIVES ME IMMENSE PLEASURE TO INTRODUCE YOU MOST SUCCESFUL POLICY OF ING VYSYA (COMBINATION OF PURE INSURANCE AND ULIP ). NO HIDDEN FACTORS, ALL THE TRUTH IN FRONT OF YOU.

Age

ü Min Age at entry : 10 lbd (for age 10 and 11 the risk will commence 2 years later)

ü Maximum Age at entry : 45 lbd

ü Maximum Maturity Age : 65 lbd

ü Non Medical Plan from Age 10 to 45 years

ü Customize the policy as per the customer age

Premium Paying Term

ü 10 Years

ü 15 Years

ü 20 Years

Premium Payment Term = Policy Term

Sum Assured

ü 10 year term: 5 times annual premium

ü 15 year term: 7.5 times annual premium

ü 20 year term: 10 times annual premium

ü E.g. If annual premium is Rs. 20,000/- and term is 20 years then the sum assured is 2,00,000 (i.e. 20,000 x 10 = 2,00,000)

Enhanced Protection Cover

The risk cover increases automatically by a simple rate of 5% of the sum assured every policy anniversary provided premiums are paid up to date.

E.g. If premium is Rs.50,000/- p.a. for a 20 year term, then normal sum assured = 50,000 x 10 = 5,00,000

Enhanced Protection cover = 5% increase over 5,00,000 every year i.e. 25,000 p.a.

Therefore, in 20 years this will reach to 4,75,000

So total risk by end of term = 5,00,000 + 4,75,000 = 9,75,000

ü The 5% automatic increase in life cover makes up for inflation

ü Incase the Fund Value depletes e.g. a customer making a partial withdrawal, the Enhanced Protection Cover will provide enhanced protection incase of death.

ü The increase in life cover is without any further medicals during the entire policy term as long as premiums are paid regularly.

Premium

ü Minimum Premium

Annual Mode :10,000

Half Yearly Mode : 5,000

Quarterly Mode : 2,500

Monthly Mode : 833

ü Maximum Premium

Annual Mode :50,000

Half Yearly Mode :25,000

Quarterly Mode :12,500

Monthly Mode : 4,166

(Minimum premium to be collected upfront Rs 2,500/- monthly option available only with ECS,CC or standing instructions)

ü Enables the customer to pay as per his Convenience

ü Allows entry into the market at different points enabling a SIP mode of investment

Choice of 5 funds

ü Debt Fund - 100% in debt instruments

ü Secure Fund- Up to Min of 10% & to a max of 20% in equity

ü Balanced Fund- Up Min of 20% & to a max of 40% in equity

ü Growth Fund- Up to Min of 40% & to a max of 60% in equity

ü Equity Fund- Up to Min of 90% & to a max of 100% in equity

Maturity Benefit

ü On completion of chosen policy term the balance available in the policy holder fund value is paid

Settlement Options

ü Entire maturity benefit can be received in one lump sum OR

ü 3 annual installments OR

ü 5 annual installments

The settlement option should be exercised 3 months prior to maturity date.

ü The flexibility to settle maturity proceeds in 1 , 3 or 5 years enables the customer plan receipt of maturity proceeds based on his needs

ü It also gives scope to utilize or avoid market volatility based on the market performance at that point in time

Partial Withdrawals

ü On completion of 5 Policy Years partial withdrawals can be made

ü One partial withdrawal per policy year is allowed, restricted to 25% of the Fund Value.

ü Minimum balance in policy holder fund value after any withdrawal should be equal to one and half years annual premium

ü Un utilized partial withdrawal cannot be carried over in the next year.

ü No partial withdrawals are allowed while the life assured is a minor

ü Partial withdrawals are subject to charge of 1% of the amount withdrawn and minimum amount is Rs. 100/-

Surrender Benefit

ü Any time after the completion of the third Policy anniversary

ü If at least one full years premium is paid

ü Amount payable on surrender shall be the Fund Value less the applicable surrender charges. (Fund Value – Surrender Charge)

Death Benefit

ü On death before the policy maturity date, the (Sum Assured plus Enhanced Protection Cover) prevailing at that time OR the Fund Value, which ever is higher, will be payable

ü Partial withdrawals if any made during the preceding 24 months are deducted from the Sum Assured while calculating death benefit

ü If age at entry is less than 12, risk will commence at the end of 2 years from the date of commencement of the policy.

ü Lien Clause: If age at entry is 12 and above, in case of death within 6 months from the policy commencement date, only the Fund Value is payable.

Fund Management Charges

Fund

% per annum

Debt Fund

0.75%

Secure Fund

1.00%

Balanced Fund

1.25%

Growth Fund

1.25%

Equity Fund

1.50%

FOR MORE CLARIFICATION, FEEL FREE TO CONTACT ME ON MY CELL NO. 9811511501.

Just get insured for your beloved ones.

2007-10-20T12:33:00.001+05:30

Hi All,
Myself Vivek Patwal working with ING VYSYA LIFE INSURANCE CO. LTD. as an Insurance Advisor. And its a pleasant experience for me in sales field. I saw many people enjoying life with full expense in beer and wine, smoking but refuse to invest in their life.
So advised people to get insured because:
* First, life insurance helps you to protect your income and your family’s financial future in case you are not around.
*Second, life insurance works as a long term saving, thus giving you the financial strength to achieve your life goals. It also gives you tax benefits.
*Third, life insurance makes sure that you have regular income after you retire and also helps you maintain your standard of living.
*Final, life insurance is a safe, long-term investment, free from the risk of market swings. At the end of the term, you or your family can enjoy added returns on investment.

Most people are smart enough to understand the need for life insurance. But not all of them know that since insurance products are based on the lifestage and need factors, they are all different. So it is better to approach them with a bit of advice, so you can maximise the plan’s benefit. That’s where the LifeMaker comes in.

So here I am please to answer your querries regarding Insurance and ULIPs plans.

Fund	% per annum
Debt Fund	0.75%
Secure Fund	1.00%
Balanced Fund	1.25%
Growth Fund	1.25%
Equity Fund	1.50%