Prajna Capital |
- Understand the Insurance Claims process
- How to Decide your asset allocation with Mutual Funds?
- Review your portfolio Time to Time
| Understand the Insurance Claims process Posted: 19 Mar 2013 04:09 AM PDT Invest In Tax Saving Mutual Funds Online Call 0 94 8300 8300 (India)
LIFE insurance has no parallel. Being bereaved of your loved one brings its own sense of loss and deprivation. While the void of losing a loved one can never be filled, life insurance is a mechanism that compensates for the financial loss and provides financial security to the family.
Claims, is an important yardstick to measure the performance of an insurance company and, thus, plays a very large role in decision making process of customers towards going for a life insurance policy.
Mentioned below are some steps to ensure a smooth ride through the claims process journey:
Claim intimation: The claim process can be initiated also known as claim intimation by visiting the branch/office of the life insurance company, or by writing an email to the company's website. The claim intimation consists of basic information such as the policy No., name of the insured, date of death, cause of death, place of death, name of the claimant and claimant's relationship with the insured. This is merely the claim intimation and not the claim itself.
Death certificate duly issued by the municipal corporation / gram panchayat has to be mandatorily submitted by the claimant as a proof of death. There are other additional claim requirements such as claim forms, which are provided by the life insurance company, and the original insurance policy document, which needs to be submitted to enable the life insurance company to process the claim. Claimant must provide his/her photographs, address proof and the photo identity proof. By way of credentials, the companies expect the claimant to provide additional supporting like the bank account statement, thereby ensuring Claim money is paid to the rightful beneficiary.
Some insurance companies in addition to the aforesaid requirements may seek additional documents on case-specific basis depending on type of claim, cause and circumstances of death, and at the same time ensuring compliance to internal and industry guidelines.
All the documents must be in original or photocopies attested by the relevant authority, such as an SEM, magistrate, gazetted officer, or a person of local standing like the police sub-inspector or authorised members from the insurance company.
Although, there is no time limit specified for submitting the claim, it is best to initiate the claim at the earliest to avoid problems and undue delays.
The claimant can follow up with the insurance Company with the policy No. or the claim No. given to him/her at the time of submitting the claim.
As a part of claim processing, a claim may warrant verification of the facts of the case and circumstances to establish genuineness of death, which is critical before decisioning of the claim. The motto of verification is to also ensure that only genuine claims are paid in the interest of the policyholders and the company. Though Irda has specified a timeline of 180 days for claim verifications, the insurance company endeavours to complete the verification well within the timelines and settle the claim at the earliest so that the ultimate customer experience of trust is upheld at all the times.
As per Irda guidelines, insurance companies must process the claim within 30 days post receipt of all the requisite documents.
There is a formal mechanism to handle policyholder grievances. However, prospects and policyholders are advised to first file their complaints with the respective insurance companies.
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--------------------------------------------- Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.
Invest Tax Saving Mutual Funds Online Tax Saving Mutual Funds Online These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)
Download Tax Saving Mutual Fund Application Forms from all AMCs Download Tax Saving Mutual Fund Applications
These Application Forms can be used for buying regular mutual funds also
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------------------ Best Performing Mutual Funds
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| How to Decide your asset allocation with Mutual Funds? Posted: 19 Mar 2013 03:37 AM PDT Invest In Tax Saving Mutual Funds Online Call 0 94 8300 8300 (India)
How to Decide your asset allocation ?
The funds that base their equity allocation on market valuation have given stable returns in the past. Pick these if you are a buy-and-forget investor.
But there are a few funds that avoid this risk by continuously changing the asset mix of their portfolios. Their allocation to equity is not based on the fund manager's outlook for the market, but on its valuations.
Our top pick is the Franklin Templeton Dynamic PE Ratio Fund, a fund of funds that divides its corpus between two schemes from the same fund house-the Franklin India Bluechip Equity Fund and Templeton India Income Fund. The allocation changes every month based on the PE of the market.
This auto rejigging has ensured stable 17.7% annualised returns for the fund since its launch in 2003. This is higher than the 14.7% returned by the Nifty but lower than the 19.8% delivered by the average diversified equity large-cap fund. It also pales before the 24.5% growth registered by the average large- and mid-cap diversified equity fund during the same period. However, the 'safety first' approach helped the fund contain losses when the market was unravelling in 2008. When the market peaked in January that year and the Nifty PE hit an all-time high multiple of 27.62, the FT Dynamic PE Ratio Fund had only 30% of its corpus in the Bluechip Equity, while 70% was safe in the Templeton India Income Fund.
Valuations decide the allocation
Just as the FT Dynamic PE Ratio Fund looks at the index PE, the ICICI Prudential Dynamic Plan considers the price to book value (PBV) ratio of the market while deciding its exposure to equity. When the Nifty PBV crosses 3.5, the fund reduces its equity exposure to the minimum 65% it is supposed to maintain. This astute allocation has enabled the fund deliver an eye-popping 26.8% annualised returns since its launch in October 2002. Now, when the Nifty is trading at a PBV of about 3.16, the fund has about 77% of its corpus invested in stocks. This is not a view on the market, but on the valuations.
The ICICI Prudential Equity Volatility Advantage Plan is a balanced fund that works on the same principle. Launched six years ago, it has consistently outperformed its category and even diversified equity funds. In the past one year, it has given 16.6% returns compared with 7-10% by various categories of diversified equity funds. This is not a flash in the pan. In the past five years, the fund has given 7.86% returns compared with 3-5% by the average diversified equity fund.
In the past 1-2 years, other fund houses have also launched funds that base their asset allocation on the market valuation. The big advantage for the investor is that he can rest easy in the knowledge that his fund will automatically book profits when prices shoot up.
Which is more flexible?
The FT Dynamic PE Ratio Fund is more flexible when it comes to asset allocation. It is a fund of funds and can technically reduce its allocation to stocks to zero. However, ICICI Prudential's Dynamic Plan and the Equity Volatility Advantage Plan need to have at least 65% in equity.
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 in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.
Invest Tax Saving Mutual Funds Online Tax Saving Mutual Funds Online These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)
Download Tax Saving Mutual Fund Application Forms from all AMCs Download Tax Saving Mutual Fund Applications
These Application Forms can be used for buying regular mutual funds also
Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )
------------------ Best Performing Mutual Funds
|
| Review your portfolio Time to Time Posted: 19 Mar 2013 01:15 AM PDT Invest In Tax Saving Mutual Funds Online Call 0 94 8300 8300 (India) As the market digests the impact of the Budget, it is time to take stock of your finances as well. Find out how and why you should rebalance your portfolio at this juncture.
Check the asset allocation
The change in allocation also alters the risk profile of the portfolio. You need to bring it back to the comfort zone by rebalancing it at this juncture. However, this is easier said than done. Rebalancing sounds practical, but is difficult to practise because it requires you to offload the winning investments and buy out-of-favour assets. Your stock investments may be doing well, but you should still sell them.
There are some practical gains that accrue to the disciplined investor who rebalances his portfolio. We tested how a portfolio diversified across stocks, debt investments and gold would have done in the past five years. An investor who put 50% in stocks, 30% in debt and 20% in gold, in 2008, and did not touch the portfolio after this, would have earned an overall compounded return of 7.5%. On the other hand, a person who invested in the same ratio, but rebalanced the investment every year, would have earned a return of 8.5% (see chart).
Not tracking your progress or reviewing your portfolio is like walking with your eyes shut. Even the best asset allocation strategy might fail if it is not reviewed. One cannot accurately predict how different asset classes will perform over time. Having the right asset allocation strategy can limit wide fluctuations in the portfolio.
Reorienting the allocation is also required as you approach your financial goals. If your goal is more than five years away, you would do well to tilt toward equity, which is a volatile asset class but offers the best rewards in the long run. As the goal comes closer, allocate a higher percentage to debt and leave less to the volatility of the stock market.
When and how often must you do it?
Most experts recommend you review the portfolio every 3-6 months. A review does not mean you have to follow it up with rebalancing. It is done only to check how individual investments are faring. For instance, one should check how each mutual fund investment has performed relative to the benchmark or peers in its category. Certain investments should be junked if they have been consistently underperforming over time.
Be mindful of costs
Rebalancing has its costs as well. When you finetune your portfolio, consider the tax implications of selling assets. Since you are booking profits from your winning investments, the resulting capital gains will attract tax liability, depending on the tenure for which the investment was held. Sell those investments that have completed a year to avoid a higher tax liability, both in case of equity and debt investments. If you sell funds within 1-2 years of purchase, you may also have to shell out exit loads.
Every time you buy and sell any stocks or funds, you incur certain transaction costs as well. These will eat into the gains that you have made on your investments. So, avoid making frequent changes in your portfolio. In some cases, it might be more beneficial to simply stop investing in an overweight asset class while continuing with other investments. The balance will eventually be restored.
The advantage of rebalancing can be nullified by excessive costs. "Acute churning can actually wipe out a chunk of the returns that you have generated," cautions Chauhan. However, if you rebalance sparingly (once every year, if required), the benefits of rebalancing will far outweigh the costs incurred in doing so.
CRASH OF 2008
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 in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.
Invest Tax Saving Mutual Funds Online Tax Saving Mutual Funds Online These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)
Download Tax Saving Mutual Fund Application Forms from all AMCs Download Tax Saving Mutual Fund Applications
These Application Forms can be used for buying regular mutual funds also
Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )
------------------ Best Performing Mutual Funds
|
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