Need Of Insurance in your day to day life

Insurance is perhaps the best way to cover personal risks which all of us face. Personal risks stand for those risks that directly impact an individual and his state of being. It is connected to his existence and survival.Personal risk can be about losing sources of income, death or disability that can make an individual unable to earn or take responsibilities, most likely of the family, risk of poor health as well as elimination of financial asset which is not for commercial purpose but for the personal use. Broadly, there are six reasons which can result in risk for an individual and affect him and his family, on the personal level. These reasons make insurance coverage an imperative.

Need Of Insurance

Death: An unfortunate event of death of a person, who is the sole bread earner, can be devastating for a family. It not only makes a void in the life of the rest of the family members, but also impacts their financial well-being. You must have seen movies where a family suffers tremendously due to death of their bread earner. Also, there can be real life examples. But these situations can be avoided. No one can predict death, although you can cover risks to ensure a financially independent life for your dependents.

Old age: Old age is the situation that causes the risk of unemployment for an individual. This may be due to the retirement or the physical inability due that the person is unable to work an spend long hours on the job.People in public sector jobs still have some social security and they can get pension and some other benefits. But what about the people working in the private sector? There is no social security for them. They have to organize financial resources for their retirement life. Today, a huge number of people work in the private sector and they run a very high risk of financially in-secured lives.Thanks to various insurance plans which can help you in planning retirement in a systematic manner. The early you start, the better your financial position will be in future. Small savings make a huge difference – due to the compounding impact.

Poor health: State of illness also causes the risk of expending huge amount of medical bills. The risk is directly related with the financial well-being of the individual. Employment, finance and budget are the major concerns of every person. Any kind of influence on financial state is causing the personal risk. Besides medical expenditure, the state of poor health for a longer duration can cause the risk for unemployment as well. That’s why, each one of us must have a health insurance plan. Also, consider covering family members. There are options available at your disposal and the cost is negligible. Why not to use them?

Unemployment: State of unemployment is one of the major causes of the personal risk. No job means no livelihood and depleted or no savings. This can wreak financial havoc on a family. If you use insurance plans in a prudent way, you can achieve financial independence over a period of time. Of course, there is Best Investment plan to cover loss of employment, but there are ways through which you can gather financial resources and ensure some steady stream of income, apart from your regular salary.

Capital protection: Having property has the risk of losing it entirely or losing its value due to any kind of damage. Various kinds of perils like lightening, windstorm or fire can cause the damage to the property which can bring financial losses for the person owning it.Just imagine, you buy a property using your capital achieved through lifetime savings and it gets damaged in some way. Through general insurance plans, you can cover risks of theft, fire, natural calamities, etc.

Liability: Liability risk factors come to the fore if somebody is sued due to any intentional or unintentional wrongful act. This kind of risk creeps in when there is any kind of damage or injury to another person and the need arises to compensate.There are insurance products such as Directors’ Liability Insurance, which can help you in thwarting off business offences and risks.

Source: http://www.policyx.com/blogs/need-of-insurance-in-your-day-to-day-life/

Three tips to buy life insurance- Investment Insurance policy

Are you looking for a life insurance policy and apprehend at the same time that you may end up with the one not suitable for you? If yes, you have come at the right point. We have tapped the significant concerns a life insurance buyer can have while acquiring the policy. Here is what you need to know before even researching for an apt life insurance policy.

The amount of sum insured

This might look like a very simple statement, however, it is not. The sum insured is the amount the family would need at the unfortunate demise of the insured. It would be required to pay the pending bills as well as to cover the important expenses to initiate with the other source of income for the family. If not this, the funds may be required to cover the important routine expenses required for basic living, at least for a few months or years.

Of course, you want to cover even more of the period to make your loved ones secured. However, the amount of sum insured also depends on your annual income and the amount of premium you can set aside for the life insurance policy. And, the rule of thumb is to elect the sum insured amount that is 7 to 10 times your total income.

Type of policy you seek for

Life insurance policies are categorized into pure life and investment linked policies. Each has its own pros and cons. You need to weigh your requirements first and look for the risk-appetite you carry. Some people may want pure cover while others may consider pure cover a total waste. It depends on how you look at the things. If you are able to manage insurance element at the same time while handling the complications of investments linked to it, you should definitely go for Unit-Linked Life Insurance Policies (ULIPs).

Right time to initiate the life insurance policy

There is much hype around getting the life insurance with lower premium rates if you start early. Well, the fact is true but only to a certain extent. The person may be young but he may have certain health conditions which increase the chances of getting the policy at higher rates. So, there is no right or wrong time to commence with your policy. The life insurance company looks for various other factors besides your age, including the overall health, profession and gender, as well. The tip is to search the internet or approach the brokerage firms that compare the various suitable policies for your individual state and find the best one with reasonable rates and maximum possible coverage.

The simple reason to buy the investment insurance policy is to ensure that the family and the dependents have the secured life after you are not around. And, added to that you are putting into the fund to seek the same protection. So, you should be aware of every detail related to your life insurance policy. The above tips will help you to understand the essentials to acquire a life insurance policy and assist you in taking an informed decision.

Source: http://www.policyx.com/blogs/three-tips-to-buy-life-insurance-policy/

Insurance Can Help Your Money Grow! Here’s How

With the rise in cost and standard of living these days, what is also essential is the provision of finances to support these needs. The concept of providing for these needs through credit cards has become increasingly common in such cases.

While this credit system may work in case of material goods and consumer durables, your life stage goals or needs on the other hand, requires a better planning. This is why, merely planning for the immediate future is not enough. There is a need to plan ahead and make sufficient financial provision for the distant future too.

Some of the most common forms of investments through which you can provision for your future are mutual funds, stock market, fixed deposits, property, and even the purchase of gold. However, insurance too can be used as a unique option of protection and life stage planning. A life insurance plan carefully selected as per your need not only works as a steady means of investment, but also provides the much-needed protection till you attain your financial goal.

The advantage with using insurance as a means of facilitating financial planning is it is a beneficial tool that enables immense diversification. Insurance plans make available different options such as traditional plans, ULIPs, etc., which act as a solution for almost every requirement like education, retirement etc.

Adopt insurance to help your money grow

Trying to build a strong financial backing for oneself can be taken forward by ensuring that the money is invested where one gets the benefit of growth, but at the same time protects the savings/corpus. Here is how insurance can help you achieve each of these objectives.

Make savings a priority

When planning your finances, an important thing to keep in mind is the earlier you start, the more you will save. The one major benefit of starting early with an insurance plan is that you will get a larger life insurance cover at a lower premium. Some of the best options to turn to when you are looking to save are endowment plans and money back plans, especially in your start-up years as they can help you build your habit of saving. These plans usually come with a secured returns and a reasonable life cover.

Invest your money where it grows

When looking at options that can help your money grow, turning to ULIPs is one of the best options to consider. The advantage with ULIPs is it is a flexible investment option. This gives the customer an opportunity to choose the type of fund that he/she would like to invest in, as per his/her risk appetite. ULIPs also enable you to navigate your investment against market volatility through options such as premium apportionment and fund switch option.

The benefit here is that the customer gets unlimited fund switch options, allowing him/her to alter the proportion of debt and equity funds, thus balancing out the portfolio. The most beneficial feature, however, of ULIPs is that this type of plan comes with the twin benefits of life protection as well as a market-linked growth for the investment.

Protect your finances

Insurance can provide you with various options that allow you to protect your money for your family’s future, upon your death or in case you are incapacitated due to some accident. Some of the most prominent options that make this possible are term plans, and riders like Waiver of Premium or Accelerated Critical Illness (ACI).

While terms plans offer your family with the complete sum assured upon your death, riders such as waiver of premium protect your family’s finances. This option helps since the nominee would still get the complete sum assured, without the obligation of having to pay a premium for the remaining policy term. The elimination of premium may come into effect in case of death or accidental total permanent disability. Additionally, a rider such as Accelerated Critical Illness can provide relief even in a situation such as occurrence of a critical illness. Accelerated Critical Illness can help by advancing your life cover so that money is available to you when you need it the most. The benefit of riders is they provide additional features that can be taken along with your base plan, at a nominal additional cost.

Besides riders, Best Investment Plan too can help protect your finances through the various options that it provides. These options could range from providing security for future situations such as change in responsibilities depending on your life stage, inflation, etc., to taking care of loan liabilities by your family, in case of the unfortunate demise of the breadwinner.

Life insurance – A multi-pronged financial tool

Life insurance these days serve several purposes in addition to simply providing your family with basic monetary relief once you are gone. It is, therefore, a good idea to think about insurance the next time you want to invest your money wisely.

Tags:

Source : http://investmentinsights.bajajallianz.com/insights/index.php/articles/insurance-can-help-your-money-grow-heres-how/?utm_source=fortuneGainPP&utm_medium=articlelink&utm_campaign=seo

Knowledge about investment Insurance.

People spend their whole lives working hard for their family and loved ones. Holding on their professional life and creating a valve of greater professional goals helps people to establish a strong financial excellence. People tend to believe in investing their finances into something which is more beneficial and helps in sustaining financially secure future. Investments are broadly defined as abstracts like, time, energy, or matter which is spent for creating a hope of futuristic based benefits. These benefits are expected to be acquired within a specific date or time. For many people investments can have different meanings depending upon their personal beliefs. In finance, Investments are defined as a process of putting money into creation of assets with a positive expectation of capital appreciation, dividends and earnings. Insurance in Modern days is considered to be the best option for futuristic benefits.

Investment insurance policy basically aim for target audience which understand the market risks and want to insure the investments that they own. Insurance not only provides them with safety coverage of their investments but also helps in providing tax exemptions on investments. INVESTMENT-PLANTherefore making them a tax free investment. Investing for beginners is much easier than at the later stage. For beginners the rate of premium is much more less than at the latter stage. In case of occurrence of death of the insurance holder the benefits are given to the nominee chosen by the insurance holder. An investment insurance plan has a specific time frame till which an insurance holder needs to pay premiums. This Time frame is selected by the insurance buyer at the time of buying the policy. Ulip Plan or Unit Linked Plan is defined as a combination of insurance as well as investments. The premium paid by the policy holder is utilized by the insurance provider to provide insurance cover back to the policy holder whereas the rest of portion is invested in various equity and debt schemes. Unit linked policy holders are given features like top up facilities along with an option of switching funds during the tenure of the policy.

Source: http://www.policyx.com/blogs/562/

The Best Way To Invest For Retirement after best investment plan

Ask Real Deal Retirement

When it comes to tapping savings in retirement, many retirees fall into what I call the Income Investing Trap. They tilt their portfolios almost exclusively toward “income” investments—dividend stocks, high-yield bonds, annuities, etc.—figuring this is the best way to assure a safe supply of spending cash throughout retirement.

Big mistake. Not only can that approach can leave you with a lopsided portfolio—which is never a good idea—but many investments pitched to retirees as secure sources of income may not be as rock-solid as they seem. For example, investors who bought high-yield and emerging market bond funds in search of higher payouts suffered losses of 3% to 4% between mid-November and mid-December, as falling oil prices and currency jitters disrupted bond markets.

Check Out: What’s Your “Magic” Retirement Number?

A more effective strategy: Invest your nest egg in a broad range of assets that can provide not just current income but capital growth as well. That way, you can then get the retirement spending money you need not just from interest and dividend payments but by periodically selling shares from your stock, bond and mutual fund holdings.

You can adopt this more effective, and more balanced, strategy for producing sustainable retirement income by taking these three steps:

Check Out: Where Can I Get A Safe High Yield on $50,000?

1. Start with a reasonable mix of stocks and bonds. Of course, what’s reasonable for many retirees—say, 50% stocks-50% bonds—may be too aggressive or overly conservative for others. So the key is to arrive at a blend of assets that can deliver returns high enough to provide adequate income without subjecting you to losses so large that you’ll spend down your nest egg too quickly.

You can get a sense of what mix of stocks and bonds you’ll be comfortable with by filling out the risk tolerance questionnaire in RDR’s Retirement Toolbox. I recommend that you repeat this exercise every couple of years throughout retirement, as many people become less tolerant of risk as they age.

Check Out: The Smart Way To Double Your Nest Egg in 10 Years

2. Diversify your stock and bond holdings broadly. Many retirees instinctively home in on stocks that pay above-average dividends and bonds that feature outsize yields. The problem with that approach for bonds is that stretching for yield leaves you in lower-quality issues that get hit hardest at the first sign of economic weakness. Focus too heavily on dividend stocks, on the other hand, and you may end up with shares of companies concentrated in just a few industries,  leaving you vulnerable if those sectors falter. During the financial crisis, for example, the iShares Select Dividend ETF lost roughly 60% of its value, in part due to its heavy weighting of financial stocks.

You’re better off creating a portfolio that mirrors the broad stock and bond markets. The easiest way to do that to invest in a total stock market and a total bond market index fund. That will give you a piece of virtually all publicly traded U.S. stocks and bonds. If you feel you want to tilt your mix a bit toward dividend shares, fine. But don’t let the make-up of your portfolio stray too far from that of the market overall. You can see how your portfolio compares to the overall stock and bond markets by plugging your holdings into Morningstar’s Portfolio Manager tool.

Check Out: Does Uncle Sam Want To Donate $2,000 to Your Retirement?

3. Set a sustainable withdrawal rate. The idea here is to set a withdrawal rate that’s high enough to provide an acceptable level of income, but not so high that you’ll burn through your assets early in retirement. There’s lots of debate about what that rate should be. But if you want your money to last 30 or more years, you should probably limit yourself to an initial withdrawal of 3% to 4%, and then adjust that draw annually for inflation.

So, for example, if you have a $1 million saved and go with an initial 4% withdrawal, you would pull $40,000 from your nest egg the first year of retirement. If interest and dividends from your portfolio total, say, 3%  of your portfolio’s value, or $30,000 that year, you would get the remaining 1%, or $10,000, by selling stocks or fund shares.

Check Out: More Sex—And 3 Other Tips For A Happier Retirement

Depending on how your best  investments plan perform, you may need to lower or raise that withdrawal rate later on. Plugging your investment and spending information into a good retirement income calculator every couple of years can help you decide whether you need to make an adjustment.

So don’t fall into the Income Investing Trap when you’re ready to start drawing cash from your portfolio for living expenses from your portfolio. Just follow these three steps, and you’ll boost your chances of getting the income you need and lower the odds of running through your savings too soon.

Source: http://realdealretirement.com/the-best-way-to-invest-for-retirement-income/

Secure Your Future through Investment Plans

There was a time when everyone wanted a government job and there were reasons behind it. The first and foremost reason was the financial security and perks. Once, a person gets a government job, his financial situation used to be secured.

But, today, there are hardly any government jobs in the market. Consequently, most people go for private sector jobs. These jobs pay well and generally, the salaries are much higher than the government jobs.

At the same time, there is no security. Private sector jobs are said to be tumultuous ones. Private companies hire people with a condition that their services can be terminated any time. The notice period is also quite short – in the range between one week and 3 months.

So, that is the kind of insecurity private sector jobs bring. If the financial condition goes wrong, companies go for mass lay-offs. Plus, there is no provision for pension, in the private sector.

You have to save for your future by your own means, and there is no way out but to adopt financial discipline.

Are you living a financially in-insecure life?

If you are also working in a private sector company and feel insecure, then you have to act now. There are solutions available, but they work, only when you take a proactive approach and practice financial discipline.

The insurance industry in India provides for solutions. Guaranteed income plans are one of them. By investing in these Investment Insurance plans for a certain period of time, you can expect a guaranteed income which can support you in case you lose your job for any reason.

There are people who are able to replace their salary income by these plans. Yes, that is possible!

How to start?

Taking the first step is important. It is said that a journey of a thousand miles starts from one single step. So, the early you begin, the faster you will be able to amass financial resources.

The first step is to research and shortlist a few well-performing guaranteed income plans.

Considering that hardly a youngster of 18-20 years has patience and wisdom for investing in such plans, let’s assume that you start at the age of 30 years. By this time, you are well-aware of the financial uncertainties of your job, and can act smart.

The policy term of Guaranteed Income Plans start from 10 years and usually go up to 30 years. It depends on your present age. For instance, if you are 40 years old, you can go for a policy term of 20 years. The period can vary, if you wish to retire early or want to start getting stable income after a certain age.

Are there any additional benefits?

Many people think that investing in Fixed Deposit offered by banks is a viable option. They offer guaranteed returns. But the returns are quite low. They may not even match inflation rates. At the other end, Guaranteed Income Plans are a type of insurance plans, which offer several additional benefits which banking instruments do not offer.

For instance, you get a life cover under these plans. If in case you lose life during the policy term, your nominee gets a fixed corpus, which can support their basic needs. Further, there is a provision of accidental death coverage also.

Moreover, you can claim tax deductions of up to Rs 1.50 lakh every year. Section 80C of the Income Tax Act has provisions under which you can deduct you taxable income by up to Rs 1.50 lakh for investing in life insurance plans.

Bank deposits, at the other end, are taxable. The income from interest generated from bank fixed deposits is taxable, after a limit of Rs 1 lakh. This income adds to your taxable income, and can wipe out a substantial amount of your annual income in the form of tax.

Thus, it is advisable to invest in Guaranteed Income Plans and avail the aforementioned features, for a financially secured and prosperous life

.

[Source: http://www.policyx.com/blogs/financial-independence-how-to-replace-salary-income/]

Ten Investment Tips for Women

Studies show that a person’s attitudes and beliefs about money have a huge impact on how they view investing. In general, women have a tendency to let others make important decisions for them, and overall are less likely to take risks. This presents a problem when it comes to investing, which is primarily about risk and return.

Investing your money is important. It can give you financial security and independence, as well as prepare you for important life events — your children’s education, your retirement, unforeseen financial emergencies. Even if you use the services of a financial advisor, be prepared stay in control of your investments. Although this may sound overwhelming at first, there are a few basic investment guidelines that you can use to enrich your future:

1. Educate yourself

The investment world has many different avenues that range from Certificates of Deposit (CDs) and Treasury Bills (T-Bills) to stocks, bonds, and mutual funds. The more you know, the better your chances of becoming a savvy investor. Read Seven Principles of Successful Investing for a good introduction to the topic.

2. Set clear financial goals.

Decide what you need to do to make your future secure and enjoyable. This can include everything from starting a retirement fund to starting to put aside funds for college, medical expenses, vacations, real estate investments, as well as an emergency fund for any unforeseen events that may drain your savings.

3. Create an investment plan.

Once you have set your goals, you need to create a solid investment plan. First, determine how much money you have to invest, and start thinking about how to make your money work for you to achieve your financial goals. Rather than a set of rules, an investment plan provides guidelines that can help you organize and direct your energies. Financial plans should have continuity and a solid foundation, but at the same time be adaptable to changes that invariably happen in life. For more on financial planning, read Developing a Personal Financial Plan.

4. Hire a financial consultant.

Consulting with a professional investment counselor can give you an edge in creating your investment portfolio. Using a mutual fund is a way to hire a financial consultant without spending a lot of money upfront. Financial consultants can sometimes be fallible, which means you should always take an active role in your investments. For more information on how to begin this process, read Hiring the Ideal Personal Finance Advisor.

5. Diversify your portfolio.

When setting up an Investment Insurance portfolio, you should make sure to diversify your investments; that is, make sure the risk is spread out and not all focused in one place. Some investments are safe but have little return (bonds, money market, treasury bills), whereas other investments come with a greater risk and thus a greater yield (stocks, funds, and futures). Also, some investments work better on a short-term basis, while others are better over the long term. By diversifying your financial portfolio, you create more security for yourself. For more on this, check out Diversify Your Investments.

6. Set up an emergency fund.

You should safeguard your finances by setting up an emergency fund to deal with potential problems that could drain your finances (such as unforeseen medical or legal problems). Building an Emergency fund contains helpful information on how to get started.

7. Plan for retirement.

You should prepare for that time when you will no longer be working and collecting a regular paycheck. Keep in mind that the earlier you start, the longer the money can benefit from compounding. So if you don’t have a retirement fund already in place (for example, a 401(k) or an IRA), start one immediately. Read 401(k) Basics and 10 IRA Strategies to get started.

8. Avoid high-risk investments.

High-risk investments are like gambling on long shots. On the whole, you have to be prepared to lose your money. Even in the world of stocks and futures, some investments are much riskier than others. Avoid Risky Investments provides a good overview to this issue.

9. Monitor investments on a regular basis.

You are ultimately in charge of your finances, and because it’s your money that is being invested, you are the one who stands to profit or lose. Always stay informed about what is going on in the different financial markets that hold your investments.

10. Be open to new ideas.

You should be adaptable and change your portfolio to reflect what is happening both in your life and in the world around you. Be aware of both financial and cultural trends. Keep up-to-date by reading business and financial journals, newsletters, magazines, and Web sites.

[Source: http://webcash.in/2012/06/29/ten-investment-tips-for-women/]

10 Investment Options in India

With a control free economy, supported by expert banking facilities, Indian capital market offers a plethora of investment options both for residents and NRIs. As per the investment plan an investor should thoughtfully select the best option available in the capital market that meets his requirements.

Top Investment Options

While some plans accrue short term profits some are long term deposits. The first step towards investing in Indian market is to evaluate individual requirements for cash, competence to undertake involved risks and the amount of returns that the investor is expecting. Below are Top 10 Investment Options in India which assure safe and satisfactory returns.

Investments in Bank Fixed Deposits (FD)

Fixed Deposit or FD is accrues 9.25% of annual returns for non-senior citizen, depending on the bank’s tenure and guidelines, which makes it’s widely sought after and safe investment alternative. The minimum tenure of FD is 15 days and maximum tenure is 5 years and above. Senior citizens are entitled for exclusive rate of interest on Fixed Deposits; current rate of return is average 10% annual.

Investments in Insurance policies

Insurance features among the best investment alternative as it offers services to indemnify your life, assets and money besides providing satisfactory and risk free profits. Indian Insurance Market offers various investment options with reasonably priced premium. Some of the popular Insurance policies in India are Home Insurance policies, Life Insurance policies, Health Insurance policies and Car Insurance policies.

Some top Insurance firm in India under whom you can buy insurance scheme are LIC, SBI Life, ICICI Prudential, Bajaj Allianz, Birla Sunlife, HDFC Standard Life, Reliance Life, Max NewYork Life, Metlife, Tata AIG, Kotak Mahindra Life, ING Life Insurance, etc.

Investments in National Saving Certificate (NSC)

National Saving Certificate (NSC) is subsidized and supported by government of India as is a secure investment technique with a lock in tenure of 6 years. There is no utmost limit in this investment option while the highest amount is estimated as ` 100. The investor is entitled for the calculated interest of 8% which is forfeited two times in a year. National Saving Certificate falls under Section 80C of IT Act and the profit accrued by the investor stands valid for tax deduction up to ` 1, 00,000.

Investments in Public Provident Fund (PPF)

Like NSC, Public Provident Fund (PPF) is also supported by the Indian government. An investment of minimum ` 500 and maximum INR. 100,000 are required to be deposited in a fiscal year. The prospective investor can create it PPF account in a GPO or head post office or in any sub-divisions of the nationalized bank.

PPF also falls under Section 80C of IT Act so investors could gain income tax deduction of up to ` 1, 00,000. The rate of interest of PPF is evaluated yearly with a lock in tenure of maximum 15 years. The basic rate of interest in PPF is 8%.

Investments in Stock Market

Indian Stock market is very fluctuating. A smart portfolio positioned for long-term growth includes strong stocks from different industries. Before investing in stock market one should be prepared to assume risk equivalent to sum invested in the market. Investing in share market yields higher profits. Influenced by unanticipated turn of market events, stock market to some extent cannot be considered as the safest investment options. However, to accrue higher gains, an investor must update himself on the recent stock market news and events.

Investments in Mutual Funds

Mutual Fund firms accumulate cash from willing investors and invest it in share market. Like stock market, mutual fund investment are also entitled for various market risks but with a fair share of profits. One should select mutual fund schemes based on all or some of the following criteria:

Long term and Short Term Performance
Consistency in Returns
Performance during bullish and bearish phases
Fund Managers performance with the fund’s operations

A simple way to select a mutual fund scheme to Investment Insurance Policy is to select a 5 star or

4 star rated fund from one of the following rating agencies:

ICRA Ratings
Value Research Online
Money control

Investments in Gold Deposit Scheme

Controlled by SBI, Gold Deposit Scheme was instigated in the year 1999. Investments in this scheme are open for trusts, firms and HUFs with no specific upper limit. The investor can deposit invest minimum of 200 gm in exchange for gold bonds holding a tariff free rate of interest of 3% – 4% on the basis of the period of the bond varying with a lock in period of 3 to 7 years.

Moreover, Gold bonds are not entitled of capital gains tax and wealth tariff. The sum insured can be accrued back in cash or gold, as per the investor’s preference.

Investments in Real Estate

Indian real estate industry has huge prospects in sectors like commercial, housing, hospitality, retail, manufacturing, healthcare etc. Calculated realty demand for IT/ITES industry in 2010 is estimated at 150mn sq.ft. Around the chief Indian cities. Termed as the “money making industry”, realty sector of India promises annual profits of 30% to 100% through real estate investments.

Investments in Equity

Private equity is a type of asset consisting of equity securities in private companies that are not publicly traded on stock exchange.
A private equity investment will generally be made by a private equity firm, a venture capital firm or an angel investor.

Private Equity is expanding at a fast pace. India acquired US $13.5 billion in 2008 under equity shares and featured among the top 7 nations in the world. In 2010, the total equity investment is predicted to increase up to USD 20 billion. Indian equities promise satisfactory returns and have more than 365 equity investments firms functioning under it.

[Source: http://webcash.in/2012/06/29/10-investment-options-in-india/]

Investment-linked insurance: Is it right for you?

An investment-linked insurance plan is basically a life insurance plan with an investment component. It provides both a life insurance cover and a return on the portion of your premium that was invested in a sub-fund, a feature that you can enjoy while you are still alive and well.

Why choose an ILP over a traditional life insurance plan?

It’s easy to see why many consumers prefer ILP. ILPs provide the possibility of investment growth, since its underlying assets are linked to stocks and bonds. In fact, depending on the performance of the sub-fund to which a portion of premium is invested, its returns may be higher than that of your investment insurance policy dividends and accumulation rate.

ILPs are also convenient to own, in that you simply speak with one person to get both your protection and earning potential needs. For those people who do not have the time to manage their own funds, the ILP is a big time saver.

ILPs also allow for the easy transfer of one’s investment funds to beneficiaries in the event of death. That’s because when you pass away, all your bank accounts and investment funds are frozen, and your surviving relatives will have to go through the legal and administrative process to access these funds. The only exception will be your insurance plan, and funds in your ILP, which immediately becomes available to your intended beneficiary upon your demise or disability.

However, there are some differences between an investment-linked plan and a whole life or term life insurance plan. In the traditional life insurance plan, the premium is guaranteed to be the same throughout your whole life. In an ILP, this guarantee may or may not be there.

Since there are so many forms of insurance products now available in the market, both traditional and investment-linked, it is necessary to understand exactly what each product offers.

Here are five questions to ask before deciding that an ILP is right for you:

1. What are your investment requirements? Depending on their financial status and life stage, people have different investment needs. For instance, senior or very young people who have no dependents might be better off going for a traditional investment fund placed in an asset that dovetails with their financial goals. Conversely, if all you want is insurance coverage, then just consider a basic whole life or term life insurance plan.

2. How much risk can you take? ILPs are not risk-free products, and returns are not guaranteed. The value of an ILP varies, depending on how its investment portion performs. In contrast, a traditional life insurance would have both guaranteed and the non-guaranteed benefits. The guaranteed benefits are known to you from the moment you sign up for the policy while the non-guaranteed benefits could vary.

3. What is your time horizon? If you are in a hurry to realize a return, remember that investment insurance require a long investment horizon. In fact, they are primarily meant for your beneficiaries in the event of your demise. Even if you choose to go with an ILP, you should not expect returns from its underlying investment assets to be heavily substantial, as these are mostly designed for long-term gain.

4. What are the fees involved when you surrender or encash the plan? Do you see yourself encashing the policy sometime in the future? Do take note that when you surrender any insurance policy, the cash value will be less than the money you have put in. There may also be withdrawal fees and penalties when you encash your policy. Ask your selling agent about policies on encashment and fees and penalties before you make a decision.

5. What are your financial goals? If you choose to get an ILP, it is important to understand the nature of its investment component to ensure that these are aligned with your personal financial goals. If you aim for high growth, then make sure that the sub-fund is invested in an asset class that can deliver on your expected returns.

As with any other investment product, you should thoroughly discuss your concerns with a financial planner before signing up for an ILP to know if it is right for you and understand how it can help you achieve your financial goals.

[Source: https://investmentinsurancepolicy.wordpress.com/2015/09/29/investment-linked-insurance-is-it-right-for-you/]

Taxercise - Ensuring your Financial Health

We go for walks, take part in marathons, lift weights in the gym, turn vegan and swear of sweets and fried goods, all with an aim to improve our physical health. But what about our financial health? What are we doing to improve that?

Your financial fitness depends on the growth of your personal wealth. There are a number of factors that will help you determine this, but it is primarily dependent on your assets and debts. Factors like housing expenses, credit card payments, car loans, mortgages etc form the first half of your assessment. They help you determine where you are losing your money and how you can curb it.

Factors like saving for an emergency fund or retirement form the next half of your assessment. These are, in many ways, your investment for the future and an absolute necessity.

One major aspect of financial planning is saving on your taxes. But that doesn’t just involve opting for a few insurance at the end of the year. It is a complete process, just like physical exercise, that requires us to take stock of our situation and invest wisely throughout the year, in order for us to see any difference in our personal wealth. It’s called taxercise – a disciplined way of exercising taxes in order to maximize tax savings & benefits.

Insurance goes a long way in saving your taxes, but not many people are aware of this. Different policies offer different tax benefits. In order to take advantage of that, it makes sense to be covered from all respects. Just like how we take stock of our debts and assets, we should also make sure our insurance policies are up-to-date and haven’t become redundant.

What are the tax benefits available?

Under Section 80 C of the Income Tax Act, 1961, life insurance premium paid by an individual for keeping insurance on the life of himself or his family can be claimed as deduction from the total income. The overall limit is Rs.1.50 lakhs. The deduction will be only amount to so much, if the premiums are not in excess of 10% of the actual capital sum assured.

As per section 10 (10D) of the Income Tax Act, 1961, any sum received under a life insurance policy  and investment insurance policy(other than sum received under section 80 DD (3) or section 80DDA (3) or under a Keyman Insurance Policy) will be exempt provided the annual premium payable under any of the years during the term of the policy does not exceed 10% (20% in the case of polices issued till 31-03-2012) of the actual capital sum assured.

When it comes to health insurance, Sec 80D of the Income Tax Act, 1961 provides that you are eligible for a deduction of up to Rs. 15, 000 paid towards health insurance premium for keeping insurance on the health of you and your family, in a financial year. If you have taken out a health cover for your parents, you will be eligible for an additional amount of Rs. 15, 000. If even one of your parents is a senior citizen, the amount will become Rs. 20, 000. The health insurance premium is to be paid on any mode other than cash to avail this benefit.

These limits can include expenses of up to Rs 5,000 on preventive health check-ups. Cash payments for health check-ups are eligible for income tax deduction. Sec 80CCC of the Income Tax Act, 1961 makes you eligible for deduction of pension contributions from the total income. Sec 80CCD (2) of the Income Tax Act, 1961 gives you additional tax benefits for the contributions paid by the employer to National Pension Scheme (NPS) subject to 10% of the salary.

How does taxercise work?

Every time you opt for one of the above covers, a weight is lifted from your tax burden and you are that much closer to a good financial fitness. If you plan it out, instead of rushing it in the last moment, you will realize how much you have saved and the difference it makes to your personal wealth. We moan and groan about taxes and how we are robbed of our hard-earned money. But the truth is that the government has given us enough avenues to save. We just need to read the fine print and plan.

What to watch out for?

Due to a false assumption that all insurance policies offer tax rebates, in a hurry, many people tend to opt for covers that do not offer any. This leads to a person, more often than not, getting saddled with unwanted and unnecessary insurance products. Be aware of the following exceptions.

In the Budget 2014-15, the Government introduced a new provision with respect to tax deduction at source (TDS) on the payouts made from life insurance policies. The provision states that all life insurance policies that are not eligible for tax exemption under Section 10 (10D), will have 2 per cent tax deducted at source on the sum paid to the policyholder.

[Source: http://blog.hdfclife.com/how-to-improve-financial-health-532630]

Investment Insurance

Among the different types of life insurance that banks offer us we have one that we can, at the same time have a life insurance and invest our money. They are called investment insurance, and are those that allow a family to be covered events such as the death or permanent disability.

So far this insurance does not differ at all from that we all know, but insurance investment also enables us to achieve a given savings will allow us to fund various needs, from the studios of our children, the acquisition of financial assets or fund our retirement.

Although this is an investment product that offers a high yield, as it varies between 2% -5%, has the appeal that we guarantee the receipt of 100% of the capital that we have provided, apart from what has been renting our investment over the duration of the life insurance.

Moreover, unlike other plans, insurance investments have the advantage that, if we are in a financial trouble, we can withdraw the money before the insurance expires. We can also adapt to life insurance contributions to our financial capacity at all times, or can perform them regularly or extraordinarily, so we would not entail extra financial burden.

There are three types of investment insurance:
– Traditional Life Insurance
– Flexible Life Insurance
– Annuities

Normally Best Investment Plan is managed through an individual account, open only for insurance, in which the entity with which we have signed we paid the premiums and interest and we will deduct the cost of insurance and other costs it accompanies it.

Such insurance should hire them when you are young and still being young is assumed that you still have many years of life ahead and then the insurance company charges a premium very cheap because you will be paying for many years while if you do it with 50 years for example the premium paid will be quite high because you’ve already entered an age of risk in which there is already a high mortality rate.

In short, is a sure must have for any and all his family and that death is unfortunately something that none know when we will come and be prepared.

[Source: http://www.theinsuranceblog.net/investment-insurance/investment-insurance-2/]

Investment Insurance

Investment Insurance from Mihir Shah

Investment Insurance

Investment insurance products are ideal to use for most savers to save his money and keep away from the dangers of the market.

Normally, if we want to get a good return on our savings products need to hire that impose long delays, tying up our money for a substantial amount of time. However, to obtain an attractive return is not always necessary to tie ourselves to a long-term investment.

Spanish Insurers have new products that customers can save with all the guarantees, enjoy a great interest within one year. We’re talking about investment insurance, a more economical product that used to put their money safe and keep away from market swings.

Characteristics of investment insurance

Then we will discuss the main characteristics of investment insurance policy. On the one hand, flexibility in contributions and in saving money are the values that are taking advantage of banks and to promote their products and thus, win more customers.

This is reflected in investment insurance to offer the possibility to temporarily suspend payments, change the amount and timing of the premiums for each semester, or total or partial disposal of accumulated capital, besides being able to make extraordinary contributions at any time .

The distinguishing feature of the investment insurance is that they allow one hand to make extraordinary contributions that fatten up the investment and the ultimate benefit and, secondly, also allow you to withdraw money before maturity: in general, after six months insurance for one year.

Curiosities

In recent years, the risk-free investment has gained momentum in all areas as a result of the crisis. This fact was also felt in the market for investment insurance, now focused on products with guaranteed capital at the expense of offering low returns (between 2% and 5% APR). It is also useful to know that since January 1, 1999, contributions are made to secure savings and investment are not entitled to any deduction in income tax, and benefits which are paid in case of survival or rescue is considered fiscally investment income, which is 18% tax. However, while not release the money not taxed.

[Source: http://www.theinsuranceblog.net/insurance-tips/investment-insurance/]

India’s Insurance Reform will Benefit Insurers and Society

Since Narendra Modi’s government has been in power, significant changes have been made to boost India’s economy and society. One major change was implementing the Indian Insurance Act, first proposed by the previous government.

The Act enables global reinsurers to enter as 100 per cent owned branches and increases overall foreign direct investment (FDI) in the insurance industry from the current limit of 26 per cent to 49 per cent. While there are many aspects of insurance, the most significant opportunity not only for insurers but also for Indian society, is the health insurance sector.

India is one of the fastest growing health insurance markets in the world. It has grown rapidly since the industry opened to private and foreign players in 1999 with the establishment of the Insurance Regulatory Developments Authority. In 2014, the health insurance market grew to $2.7bn from just $150m in 2004. It is on track to hit $8bn by 2020.

There are a number of factors driving this growth.

From a workforce perspective, just 10 per cent of India’s 300m working population work within formal sectors such as government, the public sector or in large private companies, which often offer health insurance perks. The rest work in the informal sectors, meaning they are self-employed or working in family businesses and, therefore, without corporate health insurance cover.

It is this end of the market that is most dependent on financial security during ill health. Yet, in the absence of health insurance plans, many are liable for medical bills and loss of potential income during treatment.

Demographically, the population boom, rising life expectancy and increased incidences of lifestyle-related diseases means that total healthcare expenditure is growing rapidly. It is expected to rise from $70bn to $280bn by 2020.

Despite this, there is a low spend per capita compared with countries where healthcare is largely funded by the government, meaning that some 62 per cent of total expenditure on health is paid for out of pocket.

India has one of the lowest penetration rates of pre-paid health coverage and medical insurance in the world. This is due to its geographical size, the capital required to invest in developing the distribution network and the current lack of focus from insurers in the individual health insurance sector.

The limitation on foreign Best Investment Plan rules in insurance did not give much incentive for a lot of foreign experienced players to participate in this market. There are just five standalone health insurance companies and 17 private sector insurance companies offering health insurance. So there is low consumer choice, coverage and competition. Compare this with the UK, which has 911 general insurers. India itself had over 100 players in general insurance before the market was nationalized in 1972.

Active foreign participation is critical for the sector, bringing better standards and driving competition, with better quality products, customer coverage and choice. The increase in the FDI limit will create significant opportunities for foreign players to enter the market through joint ventures, mergers or acquisitions.

Yet there are some significant challenges that remain, such as finding the right acquisition target or a partner with the right balance of local knowledge and cultural compatibility in the boardroom between the two organisations. Successful firms will be those that are comfortable with local regulatory requirements and have working knowledge of India’s business environment.

Modi’s government has promised to revamp India’s healthcare sector and make services more affordable and accessible for all walks of society. With the doors opening to India’s insurance industry, the health insurance sector will play an increasingly important role in delivering this commitment to its citizens from all walks of life.

[Source: http://blogs.ft.com/beyond-brics/2015/03/30/indias-insurance-reform-will-benefit-insurers-and-society/]

When it is about investment plan, most people get confused. Most of the time, people go around looking for ways to invest when they have certain amount of spare money in their hands. Retirement and children’s future are the two main concerns when it comes to long-term investment.

If you are without much financial leverage, you cannot afford to lose money but at the same time you need higher returns. In such a case, the best possible method to make an online investment insurance policy would be choose a balanced portfolio that has the right mix of equity and debts.

Without proper knowledge about the market, it would be best to choose mutual funds as the main base for your investment. Mutual funds can help create the ideal portfolio according to your requirements and also accumulate assets in a knowledgeable way.

One of the best ways to save money would be to invest monthly in mutual funds. For example an investment of just Rs. 5,000 a month for the next 16 years can help you generate a savings of Rs. 2 million with an average rate of 8.5% a year.

This would be achieved without any risk or headache of choosing the right portfolio. A Systematic best Investment Plan or SIP is the ideal way to start investing in mutual funds.

When you want to invest in equity, it would best to take the help of an investment advice. If you want to choose your portfolio on your own, this would be a job that would consume a lot of time and effort. Therefore, it would be best to get help from a professional. investment in India, online investment, investment advisor 

[Source: http://best-investment-options.blogspot.com/2012/12/explore-best-ways-to-investment-in-india.html]

Why do you need financial freedom?

Freedom of a nation underlines its sovereignty – in simple words its authority to govern itself. While the political freedom bestows many privileges on its citizen, one needs financial freedom to make the most of them. And the tough part is – it does not come free, one has to achieve it for himself. Especially when the world is changing at a fast pace, it becomes imperative to work harder towards achieving the goal of financial freedom.

In the last decade of the 20th century, India adopted liberalization and things changed for most of us. While it opened gates to opportunities, it also exposed us to multiple challenges. The defined benefit pension schemes were scrapped and market linked defined contribution pension was introduced even in public sector.

Archaic labor laws started their journey from rigidity to flexibility, which also meant job security could be achieved only by constant up gradation of skills and relinquishing laid-back attitude and not by some birth-right.

State sponsored saving schemes offering assured double digit returns became a history. And market linked savings options like investment insurance policy became the order of the day. To add to the situation, Indian families became nuclear, which deprived the retiring lot of the age-old joint family system. That makes all of us consider two scenarios – paying for one’s lifestyle when he is not working and ensuring at least the same lifestyle for one’s family even in his absence.

Who does not want to live a life of comfort when he retires? All of us want access to the best healthcare services available. Each of us wants to offer the best education to our generation-next. And all these come with a price tag. How are you going to pay for these? You cannot look for any external support. It has to come from you.

The only possible way out is - right steps taken in the direction of financial freedom when you are working. As one realizes the need to work towards his financial freedom, it is the right time to make a financial plan for himself- identify goals, prepare an investment plan, buy right insurance products and stick to your plan. The process adherence ensures that you reach your ultimate goal – financial freedom. On the 69th Independence Day, it is the time to swear to achieve financial freedom.

[Source: http://www.moneycontrol.com/news/planning/why-do-you-need-financial-freedom_2068561.html]

Thrift Savings Plan among best investments

Many financial experts agree the single best investment plan available to Department of Defense employees is the government’s Thrift Savings Plan, commonly referred to as the TSP. The TSP is the largest 401(k)-type plan in the nation with $454 billion in assets and 4.7 million current and former federal employees, including its military investors.

Most financial experts highly recommended investing in the TSP because it is potentially the single best way for DoD employees to build wealth. Its ultra-low costs, simple investment options, matching option for civilians, new Roth tax-free investment feature and large contribution limits make it the front-runner for anyone eligible to participate.

The costs to operate the TSP are extremely low. It is a no-load type investment, which means there are no upfront expenses to participate. The expense ratios associated with the TSP (annual operating expenses expressed as a percentage of the average net assets) are incredibly low by any standard. The industry average expense ratio is 1.02 percent. The TSP average expense ratio by comparison is .029 percent — less than one third the cost of the industry average. That is a big deal. Over time, it can easily mean the difference of tens of thousands of dollars or even hundreds of thousands for long-term investments of 30 or 40 years.

The TSPs simple best investment plan options make selecting the right funds an easy choice. Other than the life-cycle funds, which I will explain shortly, you only have five primary funds to select from — the G, F, C, S and I funds.

The G Fund, which is where your money automatically goes when you initially set up your account until you elect to change it, is the largest of the funds representing 43 percent of the all the money in the entire TSP. The G Fund is merely a savings account and even though it has not had a losing year since 1988, it has only averaged 5.43 percent since its inception in 1987. It has averaged only 3.19 percent over the last decade, which has been mostly a growth market and therefore is not a great place to invest your money for the long term, particularly if you are not going to withdraw your money for retirement for five years or more.

One problem that many do not understand is that if you do not specifically give instructions to move your money from the G Fund, the money will remain in the G Fund for the duration of your investment.

I was speaking with a close friend just the other day about his TSP account that he has had for the last 20 years. He didn’t understand how I had more than half as much in my account as he had in his since I’ve only been investing in the TSP over the last five years. When I asked him how he had his money allocated between the funds he said “I don’t know.” His money had sat in the G fund the entire time earning “savings account” rates.

[Source: http://www.ftleavenworthlamp.com/article/20150716/NEWS/150719579]