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- Individual Health insurance policy vs Family Floater
- ICICI Prudential Banking & Financial Services Fund
- Home Loan Insurance Cover
| Individual Health insurance policy vs Family Floater Posted: 14 Oct 2012 06:41 AM PDT Download Mutual Fund Application Forms
THE debate about choosing your health insurance plan would often fluctuate between individual insurance policies and covering the entire family. Under family floaters, you can cover your entire family under a single policy. You should also understand that each of these plans is suitable for different purposes. However, what really matters is knowing which of the two suits your needs better. Take a closer look to see which of these two health plans you should opt for.
Although both these categories of health plans would serve the purpose of taking care of your financial burden in case of a medical emergency, there are some areas where they differ. To understand this difference better, take the example of a family of four members, that are, husband, wife, and two children.
Case 1: If you take individual health plans for each of the members, you have to define the sum insured for each and pay four premium amounts. In case of claims, any unused amounts from one family member can not be transferred to another member, hence making it restrictive.
Case 2: You can take a floater policy of say Rs 5 lakh for your entire family. There is no fixed limit of how much of this amount is used for a single-family member. All family members will be covered under a single policy for a single premium. The claim amount during the year is, however, restricted to Rs 5 lakh for all family members put together.
Some other aspects to keep in mind while evaluating the pros and cons of individual health plans and family floater plans are as below: Suit your age profile: In a family floater plan, there is no age restriction on the family members covered.
Although individual and family floater plans cover the same risks, it is advisable that you evaluate your family's health needs and pick the one that suits your requirements most appropriately.
Easy to manage: Another benefit of a family floater is that it is easier to l manage since all family members are covered under a single policy, while multiple individual policies are difficult to manage, for example, in terms of keeping track of renewal dates.
For a family that has a large number of senior members and a higher health risk, for instance, a couple staying with parents and children, it is suggested that each adult member has an individual health policy.
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| ICICI Prudential Banking & Financial Services Fund Posted: 14 Oct 2012 05:52 AM PDT Download Mutual Fund Application Forms The banking and financial services sector has played a significant role in the development of trade, commerce and industry. This in turn has led to sector being very integral to the process of economic reforms and growth. Thus, when the country is clocking a blistering pace of economic growth rate, investing in banking and financial Services sector looks an attractive investment proposition. It is noteworthy that India's banking and financial services sector stands on strong foundations of very prudent policy framework laid by the regulator(s). Moreover, with our economy being a developing one, the avid appetite for consumer and corporate credit, often works in favour of this sector. Also, favourable demographics and several unbanked regions makes the sector promising to invest. Likewise, other allied industries such as insurance, asset management and stock broking which are integral, also broaden the scope of investment in the theme. ICICI Prudential Banking & Financial Services Fund (IPBFSF) is one such open-ended thematic fund, from the stable of ICICI Prudential Mutual Fund that focuses on investing in opportunities available in the banking and financial services sector. It is mandated to invest 70%-100% of its asset in equity and equity related securities of companies engaged in banking and financial services, and the rest (i.e. upto 30%) in debt market instruments. Launched in August 2008, IPBFSF has been in existence for a little over 3 ½ years now.
Fund Profile & Investment Decision Snapshot
Investment Objective and Proposition
The fund's primary investment objective is "to generate long-term capital appreciation to unit holders from a portfolio that is invested predominantly in equity and equity related securities of companies engaged in banking and financial services."
Portfolio Characteristics
In the last one year, exposure of IPBFSF to large caps has ranged between 57.0%-72.0% of its assets while the exposure to midcaps was in the range of 21.0%-31.0%. The fund has occasionally taken aggressive cash calls in the past 1 year as its exposure to debt and cash has remained in the range of 3.0%-16.0%.
Equity Portfolio
As per the portfolio disclosed on March 31, 2012, the fund holds in all 18 stocks. Top-10 stocks constitute 79.7% of the portfolio, while its top-5 sector concentration has been 97.2% of its total portfolio. As on March 31, 2012, the large caps constitute 71.5% of the portfolio, while its exposure to mid and small caps was at 25.6%, while cash and cash equivalents assets to the tune of 2.8%. The fund manager of IPBFSF has not churned the portfolio aggressively as revealed by its portfolio turnover ratio of 0.68 times - which is considered low to moderate.
How IPBFSF has fared vis-Ã -vis its peers
The table above reveals that IPBFSF's performance has been ordinary. Over a 3-Yr time frame, the fund has generated returns at 28.1% CAGR, thereby underperforming its benchmark index – BSE BANKEX with a noticeable margin. On the volatility front, the fund has exposed its investors to low risk (as revealed by the Standard Deviation of 8.79%) thereby being less volatile than some of its peers in the category as well as its benchmark. On the risk-adjusted return parameter too (as gauged by the Sharpe ratio), returns appear mediocre in comparison with its peers.
Performance across Market Cycles
Study of performance across market cycles reveals that IPBFSF has performed reasonably well during the bear and corrective market phases. However, it has failed to outpace its benchmark in the bull market phase.
Fund Manager Profile
As seen above LICMF Opportunities Fund`s performance is nothing to vie for. Moreover, the fund has been unable to provide appealing returns to its investors for the level of risk taken. Also the fund's large cap bias has resulted in the fund's inability to take the absolute advantage of the mid rallies of the past. Happy Investing!! We can help. Call 0 94 8300 8300 (India) Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com ------------------------------------------- Invest Mutual Funds Online
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| Posted: 13 Oct 2012 09:23 AM PDT Download Mutual Fund Application Forms
These covers are called Mortgage Redemption Schemes. The ones offered by banks fall under a group insurance scheme for borrowers of housing or vehicle loans. Typically, these are single premium term plans or pure life covers. The lender pays the premium to the insurance company as soon as your loan gets sanctioned. And adds the cost to your loan, which you pay in small parts with the equated monthly instalment. Such covers offer a sum assured worth the loan amount. The premiums are higher for longer duration loans, such as those for housing.
Options
Later, Varadarajan learnt he could have refused his lender and bought a cover separately, may be for a lesser premium. It is not mandatory to buy the cover from your lender. You can shop for a term plan yourself. Only, you'll have to buy a regular term plan, not a group cover. If Varadarajan had opted to buy a new cover for his loan, this 32-year-old would have to pay ~5,360 annually.
A separate cover need not always work out cheaper. For instance, if Varadarajan had to pay ~31,630 over 20 years, it would be a little over ~1,500 per year. Single premium plans work out a bit cheaper than regular premium ones.
The premium for a common group is decided on the average age the banking partner lends to. Given there are groups across ages, professions and so on, it is bound to work out cheaper.
It is also about ease of documentation, convenience of one-time payment and getting everything under one roof. Under the group scheme you can choose between reducing and level covers. Reducing covers lowers the premium, as the principal amount reduces, charging a lower premium. A level cover stays stagnant even if the loan amount reduces, like a term plan you buy separately.
If not single premium, which both insurers and borrowers prefer, we advise reducing covers as it is linked to the outstanding (due) and is easy on the borrowers pocket. It starts lowering as soon as the repayment starts. Borrowers, who have not bought a loan cover, can purchase one within four to six months of starting the repayment, but on certain conditions.
Varadarajan could have also attached an existing term cover, if any, to cover his home loan. Here, he would have been required to give his insurance papers to the bank at the time of filing the loan documents.
Reasons
Obviously, banks allow this if the term cover's sum assured is equal to the loan amount. "But, we discourage borrowers from giving an existing insurance policy, specially if he/she is the only bread winner in the house. One, because his/her family would also need financial help in the event of his/her death. Two, as partners to insurance companies, we also have a sales target to meet," says a private sector banker. If you have more than one term plan, you could opt for this route.
It may happen that the existing cover you want to attach to your home loan has a sum assured, which is less than your loan amount. In that case, you can attach two policies equal to the loan amount; Varadarajan has two life covers of ~10 lakh each. Or, you could attach one cover and buy another one equal to the differential between the sum assured and the loan, and attach both. However, it is advisable you keep term covers for both these purposes separate. Keep one cover for your family to fall back on in case of any eventuality and take another cover to provide for your home loan. Happy Investing!! We can help. Call 0 94 8300 8300 (India) Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com -------------------------------------------- Invest Mutual Funds Online
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Invest in Tax Saving Mutual Funds Download Any Application Forms Buy Mutual Funds Online Invest Online Buy Gold Mutual Funds Invest Now  |
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