Prajna Capital |
- How to Reduce your health insurance cost
- What needs to be considered while buying a Mutual Fund?
- Which ETF to buy?
| How to Reduce your health insurance cost Posted: 25 Mar 2014 05:03 AM PDT Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Leave a missed Call on 94 8300 8300
In the past year, health insurance cost has increased across insurers.
The insurance regulator's decision to abolition claim- based loading and introduce life- long renewability are the main reasons behind higher premiums, besides rising medical inflation, say insurers.
These raise the sector's costs, too. But the regulator allows companies to raise rates only once every three years.
Public sector companies' pricing has shown an increase of 14 per cent in the last financial year compared to 2012. And, though private sector companies have not raised prices steeply, they have accounted for a higher premium in age bands beyond 45 years, posting a rise of 10- 12 per cent in the same bands. In the older regime, premiums increased when a policyholder made a claim (claim- based loading) or when he moved from one age bucket to another. You move from one bucket to the other roughly every five years. The new norms allow premiums to increase only when there is a change in the age bucket.
So, while fixing premiums, we will have to factor in this. Therefore, to a certain extent, some kind of cross- subsidisation will happen between the younger and the older customers.
Given that premiums for higher age brackets are anyway high, a further rise in premium gets restricted or coverage for seniors will become impossible.
In the coming years, health insurance cost could rise by another 15- 20 per cent for individuals.
Public sector companies' projected increase would be 25- 30 per cent.
In such a scenario, how to cut your rising health insurance cost? Here are a few ways: Opt for a family floater
If a family needs to be covered, opting for a family floater could be cheaper than individual plans for each member.
Younger families (where the senior most member is below 45 years) should opt for family floaters, as the price is based on the age of the senior most family member. Higher the age of the oldest member, more the premium.
Also, utilisation of family plans is higher than individual plans, each of which might not get used. With Bajaj Allianz Health Guard Family Floater, a ₹ 10 lakh policy for a family of four ( self, spouse and two children) costs ₹ 21,826 plus service tax ( eldest family member between 26 and 40 years).
Typically, two adults ( oneself and the spouse) and two children are covered in a floater policy; parents and siblings are not. A few companies like Oriental India Insurance (Happy Family Floater) also offer cover for parents also. Max Bupa's family floater covers up to 13 relations.
"One can look to be covered under very basic plans like a critical illness, personal accident and hospital cash covers, which are cheaper than a comprehensive cover but provide only conditional coverage," says Mishra. Of course, these covers are no substitute for a comprehensive insurance.
Opt for two-year policies
Insurers Apollo Munich, HDFC Ergo, Star Health offer two- year health plans. Chances are you will benefit on more than just the premium front. Health insurance policies are annual contracts. HDFC Ergo's two- year 'Health Suraksha' helps you save ₹ 4,469 of premium for a ₹ 4 lakh policy for a 30- year period. A one- year policy would cost ₹ 5,587, whereas a two- year policy would cost ₹ 10,056.
Use top ups for higher cover
Say you want a cover of ₹ 5 lakh. Buy a standalone policy offering sum assured of ₹ 1 lakh or ₹ 2 lakh and buy atop- up of the remaining ₹ 4- 5 lakh, chief executive officer of Bharti AXA General Insurance.
This structure will be significantly cheaper than increasing the base insurance. Such plans get triggered only after you have exhausted your base cover. A ₹ 2 lakh standalone policy with HDFC Ergo's Health Suraksha and a ₹ 4 lakh top- up will cost you ₹ 5,577 (₹ 3,217 + ₹ 2,360). Whereas a ₹ 5 lakh standalone cover will cost you ₹ 7,254.
Check deductibles & sub limits
Customers can opt for voluntary deductible policy, The main aim behind such plans is for bigger claims to be paid by the insurer. Based on their paying capacity, policyholders pay smaller claims from their pocket, thus cutting the insurer's and their own cost.
Bajaj Allianz's product offers a 10 per cent discount in premium if you choose a voluntary deductible — amount you have to shell out before the insurer pays up — of ₹ 10,000.
Similarly, a policyholder could opt for sub- limits for non- life threatening diseases ( hernia, appendicitis, knee replacement) and no sub- limits on critical illnesses ( cancer, stroke). In case of non- life threatening illnesses, you could go to smaller hospitals or be ready to pay from your pocket if the bill exceeds the sublimit.
Checking all the benefits available and lowering higher sub- limits if not required. For instance, say a policy offers room rent of ₹ 20,000. You may lower it to ₹ 10,000, as there's no need for such a high room rent.
No claims benefit
Policyholders should check for no claims benefit in their health plans.
If this is unavailable, shift or port to another plan offering it. Unlike motor insurance, where non- claims bonus can be used to lower renewal premium.
No- claims can only increase coverage in health insurance.
Customers covered under group health insurance from employers can port to individual policies of the same company at the time of changing jobs. This way they can get the no claims benefit, by way of higher sum assured on the individual plan. But they must remember that while porting, they will not get a mirror policy of the group scheme. They will only get what is available in the individual plan. For instance, maternity covers are typically not included in individual policies.
Buy online
Some companies offer online health cover, like Bajaj Allianz, HDFC Ergo and Apollo Munich, which are cheaper than offline plans. Online policies are available at a 10 per cent discount to offline plans.
Ways to cut expenses Saving
Two- year policy, instead of annual plans 25- 30% A mix of standalone and top- up plans 20- 25% Opting for sub- limits and higher deductibles 10- 30% Buying health insurance plans online 10% Use no- claim history 20- 25% rise on sum assured
For further information contact Prajna Capitalon 94 8300 8300 by leaving a missed call
Leave a missed Call on 94 8300 8300
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
Download Mutual Fund Application Forms from all AMCs Download Mutual Any Fund Application Forms ---------------------------------------------
Best Performing Mutual Funds
B. Large and Midcap Funds Invest Online
C. Mid and SmallCap Funds Invest Online
D. Small and MicroCap FundsInvest Online
2.Franklin India Smaller Companies E. Sector Funds Invest Online
F. Tax Saver Mutual Funds Invest Online 1. ICICI Prudential Tax Plan 2. HDFC Taxsaver
G. Gold Mutual Funds Invest Online
H. International funds Invest Online 1. Birla Sun Life International Equity Plan A 2. DSP BlackRock US Flexible Equity 3. FT India Feeder Franklin US Opportunities 4. ICICI Prudential US Bluechip Equity 5. Motilal Oswal MOSt Shares NASDAQ-100 ETF |
| What needs to be considered while buying a Mutual Fund? Posted: 25 Mar 2014 04:11 AM PDT Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Leave a missed Call on 94 8300 8300
The mutual fund industry is characterised by the problem of plenty. With hundreds of mutual fund schemes in India, across over 40 fund houses, how would you know which funds are worth investing in?
This is, by far, the most common parameter which investors look for. The track record of the mutual fund schemes is based on the past performance of such schemes. The irony in this is that every bit of communication from a mutual fund company states that the past performance of the scheme is not an indication of the future performance!
Every equity mutual fund scheme has its own philosophy of investing and can be compared to a benchmark index. Choose a scheme which has outperformed its benchmark or delivers returns which are at least comparable to benchmark returns.
A mutual fund scheme which is backed by a sound Asset Management Company (AMC) is an ideal pick compared to an unknown scheme. Find out details about the fund manager who will be managing your fund. Ideally, the fund manager should have seen through a few business cycles to understand market movements. In addition to the fund house and the fund manager, it is important that the mutual fund has a stable management team, who can manage the fund’s activities even if the fund manager leaves the fund house.
The fee charged by the fund house to manage and operate the fund is known as expense ratio, which includes management charges, administrative charges and other operating costs. These expenses are paid by the unit holders even if the fund doesn’t do well in any year. Hence it is very important to focus on this parameter. Look out for well managed funds which have a low expense ratio.
When you have shortlisted a few funds, study their portfolio allocation. Understand the quantity of funds invested in the various categories and stocks. Studying the portfolio allocation helps you to understand the risk profile of the scheme.
For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call
Leave a missed Call on 94 8300 8300
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
Download Mutual Fund Application Forms from all AMCs Download Mutual Any Fund Application Forms ---------------------------------------------
Best Performing Mutual Funds
B. Large and Midcap Funds Invest Online
C. Mid and SmallCap Funds Invest Online
D. Small and MicroCap Funds Invest Online
2. Franklin India Smaller Companies E. Sector Funds Invest Online
F. Tax Saver Mutual Funds Invest Online 1. ICICI Prudential Tax Plan 2. HDFC Taxsaver
G. Gold Mutual Funds Invest Online
H. International funds Invest Online 1. Birla Sun Life International Equity Plan A 2. DSP BlackRock US Flexible Equity 3. FT India Feeder Franklin US Opportunities 4. ICICI Prudential US Bluechip Equity 5. Motilal Oswal MOSt Shares NASDAQ-100 ETF |
| Posted: 25 Mar 2014 03:11 AM PDT Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Leave a missed Call on 94 8300 8300
Finding the best ETF is daunting especially when one is spoiled for choice. Take any sector and you’ll find as many as 50 large- cap value ETFs – and hundreds of them across all parameters. Also, many large- cap value ETFs have significantly varied portfolios, raising radically differing investment implications. So, what are ETFs exactly? And, how do you choose from so many? ETFs are a basket of stocks that reflect the composition of an index such as the S& P CNX Nifty or the BSE Sensex. They are essentially mutual fund schemes or “ index” funds, listed and traded, as are stocks, on the exchanges.
They are priced continually and can be bought and sold throughout the trading day unlike mutual funds, the prices of which are based on the NAV ( net asset value) at the end of a trading day.
Certain unique features of ETFs are that they can be bought and sold just like shares at real- time prices. These funds also promise delivery into your demat account. Since the minimum trading lot for ETFs is 1 unit, they can easily be bought and sold. ETFs help to diversify a portfolio as they mirror market indices. They also help in tax savings while providing arbitrage between the futures and the cash markets.
Generally, when investing, people tend to compare ETFs with mutual funds. There are, however, certain advantages when it comes to investing in ETFs over investing in mutual funds. First and foremost, ETFs can be purchased and sold online and “ limit” orders are possible; mutual funds require paper- based investing and “ limit” orders are not allowed. Also, arbitrage is possible in ETFs; mutual funds lack arbitrage opportunities.
Intra- day trading is possible in ETFs, not with mutual funds, and no exit loads are applicable on ETFs as they are on mutual funds.
Broadly, two kinds of ETFs exist: gold ETFs and Index ETFs. Let us see when one should invest in ETFs.
Use Gold ETFS only for diversification
Gold is one of the most important asset classes, serving as a hedge against inflation. But investment in gold attracts taxation ( wealth tax on an asset and capital- gains tax on disposal). Gold ETFs serve as a catalyst for investing in gold and savings in tax. Some major tax advantages of investing in gold ETFs are no wealth tax and no liable Securities- Transaction Tax, unlike shares which attract the STT. On gold in physical form purchased from banks or jewellers, sales tax or VAT is levied; on gold ETFS, none. To qualify for long- term capital gains, gold in physical form needs to be held for more than three years; with gold ETFs, holding them for a year suffices.
Certain other advantages of investing in gold ETFs are that the fear of theft is alleviated, and storage problems are non- existent as gold ETFs are in electronic form (“dematerialised”).
Also, they are easy to sell online, and the proceeds obtained within two days. Even half ( 1/ 2) a gramme of gold can be bought online apart from 1 gram gold ETF units.
Internationally, gold is going through a slump as the U. S. economy recovers. So, the metal is best avoided. However, a certain basic amount to be allocated to the yellow metal for the purpose of diversification.
Go for frontline ETFs
ETFs help, to a large extent, reduce the confusion— and anxiety— in deciding on a particular stock in a particular sector.
ETFs are the best option for investing in an index. They can broadly be classified into sector, money- market, gold and global indices. Also, similar to gold ETFs, investment in index ETFs sport their own tax benefits, apart from those already offered by gold ETFs. First, as with shares, tax is applicable at 15 per cent on the sale of ETFs if held for less than a year. If they are held for longer than that, no tax arises on their sale.
Liquid Bees ETFs ( based on money markets) fetch higher returns than savings accounts, and no Tax Deduction at Source is applicable, unlike with interest on FDs.
Other advantages of investing in ETFs are the fact that ETFs can be held in electronic form (dematted). Sector- specific investing can be done through ETFs, for instance, in the banking sector, in the public sector, in infrastructure, textiles, capital goods, and so on. One can also invest in global markets such as Hong Kong and USA through ETFs. They prove useful for hedging since they can be borrowed and sold short. ETFs trade relative to most derivative contracts and provide a more accurate risk exposure match. They can be used for arbitrage between the cash and futures markets, and can also cover option strategies on an index.
Purchasing an ETF without examining its holdings is like buying a stock without questioning the business of the company. Therefore, a background check on the holdings of an ETF is necessary since an ETF’s performance is only as good as performances of its holdings.
For further information contact Prajna Capitalon 94 8300 8300 by leaving a missed call
Leave a missed Call on 94 8300 8300
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
Download Mutual Fund Application Forms from all AMCs Download Mutual Any Fund Application Forms ---------------------------------------------
Best Performing Mutual Funds
B. Large and Midcap Funds Invest Online
C. Mid and SmallCap Funds Invest Online
D. Small and MicroCap FundsInvest Online
2.Franklin India Smaller Companies E. Sector Funds Invest Online
F. Tax Saver Mutual Funds Invest Online 1. ICICI Prudential Tax Plan 2. HDFC Taxsaver
G. Gold Mutual Funds Invest Online
H. International funds Invest Online 1. Birla Sun Life International Equity Plan A 2. DSP BlackRock US Flexible Equity 3. FT India Feeder Franklin US Opportunities 4. ICICI Prudential US Bluechip Equity 5. Motilal Oswal MOSt Shares NASDAQ-100 ETF |
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