Tuesday, March 19, 2013

Prajna Capital

Prajna Capital


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.


Claim requirements:

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.


Time limit for submitting claims:

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.


Claim processing:

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.


Grievance mechanism:

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.


Additionally, Irda offers integrated grievance management system (
IGMS), a tool to monitor disposal of grievances by insurance companies and carry out root cause analysis of grievances to identify systemic and policy related issues. Over and above this, the policyholder can also approach the consumer court and insurance ombudsman in case if the aforementioned options do not work.

 

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 )

  1. ICICI Prudential Tax PlanInvest Online
  2. HDFC TaxSaverInvest Online
  3. DSP BlackRock Tax Saver FundInvest Online
  4. Reliance Tax Saver (ELSS) FundInvest Online
  5. Birla Sun Life Tax Relief '96 Invest Online
  6. IDFC Tax Advantage (ELSS) FundInvest Online
  7. SBI Magnum Tax Gain Scheme 1993Invest Online
  8. Sundaram Tax SaverInvest Online
  9. Edelweiss ELSS Invest Online

------------------

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds Invest Online
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds Invest Online
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds Invest Online
      1. DSP BlackRock MicroCap Fund
    1. Sector Funds Invest Online
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Tax Saver MutualFundsInvest Online
      1. ICICI Prudential Tax Plan
      2. HDFC Taxsaver
      3. DSP BlackRock Tax Saver Fund
      4. Reliance Tax Saver (ELSS) Fund
    2. Gold Mutual Funds Invest Online
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

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.


Small investors are often victims of greed and fear. When markets are rising, greed makes the small investor increase his exposure to stocks. And when stocks crash to low levels, fear makes him redeem his investments.

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


Small investors make the mistake of entering the market during bull runs and tend to compound the error by staying away from equity when the market turns bearish. This is where asset allocation funds take the right decisions on behalf of investors. When the market tanked and the Nifty PE hit a low multiple of 12-13 times in December 2008, the FT Dynamic PE Ratio Fund had 90% in equity. Currently, the Nifty PE is 18.5 times and the fund has 61% in stocks.

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.


This feature ensures that the funds are eligible for tax exemption on long-term capital gains. On the other hand, there is no exemption available to investors in the FT Dynamic PE Ratio Fund because it is a fund of funds. Short-term gains are added to your income and long-term gains are taxed at a lower rate of 10% (or 20% after indexation). Do remember, however, that there is no tax implication for the investor when the fund shifts from stocks to debt and back in a volatile market.

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 )

  1. ICICI Prudential Tax PlanInvest Online
  2. HDFC TaxSaverInvest Online
  3. DSP BlackRock Tax Saver FundInvest Online
  4. Reliance Tax Saver (ELSS) FundInvest Online
  5. Birla Sun Life Tax Relief '96 Invest Online
  6. IDFC Tax Advantage (ELSS) FundInvest Online
  7. SBI Magnum Tax Gain Scheme 1993Invest Online
  8. Sundaram Tax SaverInvest Online
  9. Edelweiss ELSS Invest Online

------------------

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds Invest Online
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds Invest Online
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds Invest Online
      1. DSP BlackRock MicroCap Fund
    1. Sector Funds Invest Online
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Tax Saver MutualFundsInvest Online
      1. ICICI Prudential Tax Plan
      2. HDFC Taxsaver
      3. DSP BlackRock Tax Saver Fund
      4. Reliance Tax Saver (ELSS) Fund
    2. Gold Mutual Funds Invest Online
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

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.



Spring brings with it new life, new hopes... and new investment rules in the Budget, which forces investors to rejig their finances. However, the Budget alone should not be the reason to change your investments. You should review your portfolio on a regular basis since it not only ensures stable returns, but also enables achievement of goals more easily.


Are you a passive investor, who believes in investing and forgetting? Or do you monitor your investment portfolio closely, checking the performance on a daily, even hourly, basis? Neither approach is an effective way to grow wealth. If you fall into a slumber after investing and don't check the performance of your investments periodically, your portfolio may get out of shape. On the other hand, if you can't sleep without checking the daily gains and losses in your portfolio, you might make rash decisions that would harm its long-term prospects.


For best results, take the middle path to managing your portfolio. Don't make a habit of running through the numbers every day, but do not ignore the performance completely. You must review your portfolio at least once a year. "Just like your car, your portfolio needs a check-up once in a while.

Check the asset allocation


The most important thing to assess during the annual review is the asset mix of your portfolio. This is simply the proportion of your corpus invested in different asset classes to diversify and contain risk. When you started investing, you must have decided how much to allocate to equity, debt and other classes like gold and real estate. Over time, however, this allocation would have changed because investment classes give different returns.
For instance, if you had decided to allocate 40% to equity and 60% to debt at the beginning of 2012, by the end of the year, the equity portion would have grown to about 44% of the portfolio. A change to this extent is tolerable and can even be ignored. However, in a year like 2009, when the stock market surged 71%, the equity component would have grown to 51% of the portfolio.

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
Stock prices fell 52%, wreaking havoc on portfolios. Rebalancing helped the disciplined investor buy more equity at rock bottom prices.


REVIVAL IN 2010
When prices bounced back in 2009 and 2010, the rebalanced portfolio outperformed the static one, but it was time to sell equity once again. Gold was also on the selling list.


CORRECTION OF 2011
The stocks slid back in 2011 but the rebalanced portfolio did not lose too much. The static portfolio managed to contain losses because of a surge in gold.


FUTURE TENSE
The static portfolio has not only lagged the rebalanced one but is overweight in equity and gold. Both asset classes are facing uncertainty right now.

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 )

  1. ICICI Prudential Tax PlanInvest Online
  2. HDFC TaxSaverInvest Online
  3. DSP BlackRock Tax Saver FundInvest Online
  4. Reliance Tax Saver (ELSS) FundInvest Online
  5. Birla Sun Life Tax Relief '96 Invest Online
  6. IDFC Tax Advantage (ELSS) FundInvest Online
  7. SBI Magnum Tax Gain Scheme 1993Invest Online
  8. Sundaram Tax SaverInvest Online
  9. Edelweiss ELSS Invest Online

------------------

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds Invest Online
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds Invest Online
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds Invest Online
      1. DSP BlackRock MicroCap Fund
    1. Sector Funds Invest Online
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Tax Saver MutualFundsInvest Online
      1. ICICI Prudential Tax Plan
      2. HDFC Taxsaver
      3. DSP BlackRock Tax Saver Fund
      4. Reliance Tax Saver (ELSS) Fund
    2. Gold Mutual Funds Invest Online
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

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