Prajna Capital

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• Your Insurance Policy
• How to decide between Investment and Tax Saving?
• National Pension System - NPS or Retirement Plan

Your Insurance Policy Posted: 23 Apr 2014 05:10 AM PDT Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300     There are a number of things that each of your life insurance policies should spell out and include, and the document is a complete guide to exactly what your insurance contract covers.   Life insurance is the only financial tool which offers the triple advantage of risk coverage, long term savings and tax benefit. It offers financial protection to an individual after taking into account the present and future value of his assets and liabilities. However, while the awareness and acceptance of insurance in India is growing, consumers need to develop a better understanding of the products they buy. There are a number of things that each of your life insurance policies should spell out and include, and the document is a complete guide to exactly what your insurance contract covers. This is why it is always important to check a policy very carefully when you first receive it, to make sure that everything you requested is written down in the policy. Mentioned below are ten key parameters to weigh once you received the policy documents. 1. Verify personal details Personal data provided to the insurance company forms a very important part for settlement of all claims. Please make sure that all personal details such as your name, age, etc. are mentioned correctly. Please also make sure that all aspects related to personal habits or health details are mentioned correctly and honestly. In cases where it is not declared or is erroneous on policy documents, the insurer in all fairness may refuse to honour the claim and hence get it corrected proactively. 2. Analyse the benefits The benefits of your life insurance policy must correspond with your long term goals. After the receipt of policy documents, go through the features of the product and check if they match with promises made during the purchase. Cross-check features such as sum assured, premium amount, flexibility of the plan, etc. Your insurance plan may also come with more evolved features such as dynamic fund allocation or increasing premium to beat inflation which need to be understood in detail as well. 3. Check the riders In addition to life coverage, you may have purchased a few add-on covers known as riders for other types of contingencies. Go through the insurance contract to ensure that rider you bought are included in it. You would not want to be disappointed while filing a claim for a critical illness that the rider you thought you purchased for the same was not included in the policy. 4. Consider the payment tenure Knowing the exact payment tenure will help in ensuring that you achieve the goals for the reason you bought the policy. Please check for how long you need to pay premiums and also what mode of payment you may have chosen, for example half yearly, quarterly etc. The basis of most mis-selling is the premium payment tenure. Please do not fall for the "you need to pay for only 3 /5 years" line. Life insurance is a long term savings and protection tool and its benefits can be seen only if one buys it for the long-term. 5. Authenticate the returns Do not blindly believe the returns promised. Once you get the policy documents, check out the benefit illustrations of returns. Study carefully what is guaranteed and what is not. Incidentally, in the last decade, the gross investment yield of the 'controlled funds' of traditional endowment plans is a ~8%. During the last 5-7 years, balanced and equity oriented ULIP funds have yielded ~8% to 12% while less volatile conservative and debt-oriented ULIP funds have yielded ~6-10% gross returns. The illustration shows what would be your illustrative benefits in a hypothetical situation if your investment were to provide a gross return of 4% and 8%, as per the IRDA's mandate. 6. Comb through the service contract In addition to the benefits specified in policy documents, it is necessary to carefully read the terms and conditions of the service contract. In case you find any difficulty in understanding any aspect, you may want to check with the insurer the impact of those terms. 7. Confirm surrender charges Many a time a situation may arise where you face a cash crunch and need to surrender your policy or make partial withdrawals. For times likes these you may need to make sure to examine the exact surrender charges mentioned in the documents, so that you can plan finances and minimise losses accordingly. 8. Examine exclusions Exclusions in the policy define aspects or situations that will not be included in the coverage. An exclusion that one is not aware of can make the cover redundant. Read the exclusions carefully, and they may include suicide, death which occurs during the commission of a crime, acts of war or terrorism, and others as well. Some exclusions may be only for a specified period, and may be called restrictions instead. It is common for many life insurance policies to refuse to cover certain types of deaths within a specific period of the policy being issued 9. Claims settlement process Check if the nominee's details are captured properly. You have the option of including two or more nominees and specify their share of claim. Your life insurance policies should include everything that is supposed to be in your coverage, and it will spell out exactly what your responsibilities are, what the life insurance company is responsible for, what you are covered for and how much, and every other aspect of your life insurance coverage. It should also list down all details on how to file a claim or what to do in certain other circumstances. 10. In case if you think that a product has been mis-sold to you The life insurers give a free look period of 15 days to the consumer during which a consumer can review the policy from his needs perspective. If the consumer is not satisfied and feels that the product features are not in sync with the understanding given by the agent at the time of selling the policy, then he is free to return the policy and claim a refund of the money paid. IRDA has also created various ombudsmen across the country, which act as grievances cells and can take up consumer complaints.   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 Invest Any Mutual Fund Online Download Mutual Fund Application Forms from all AMCs Download Mutual Any Fund Application Forms --------------------------------------------- Best Performing Mutual Funds Largecap Funds Invest Online DSP BlackRock Top 100 Fund ICICI Prudential Focused Blue Chip Fund Franklin India Bluechip ICICI Prudential Top 100 Fund B. Large and Midcap Funds Invest Online ICICI Prudential Dynamic Plan HDFC Top 200 Fund UTI Dividend Yield Fund Birla Sun Life Front Line Equity Fund Franklin India Prima C. Mid and SmallCap Funds Invest Online Reliance Equity Opportunities Fund DSP BlackRock Small & Midcap Fund Sundaram Select Midcap IDFC Premier Equity Fund Birla Sun Life Dividend Yield Plus SBI Emerging Businesses Fund HDFC Mid-Cap Opportunities Fund ICICI Prudential Discovery Fund D. Small and MicroCap Funds Invest Online DSP BlackRock MicroCap Fund 2.Franklin India Smaller Companies E. Sector Funds Invest Online Reliance Banking Fund Reliance Banking Fund ICICI Prudential Banking and Financial Services Fund F. Tax Saver Mutual Funds Invest Online 1. ICICI Prudential Tax Plan 2. HDFC Taxsaver DSP BlackRock Tax Saver Fund Reliance Tax Saver (ELSS) Fund G. Gold Mutual Funds Invest Online Relaince Gold Savings Fund ICICI Prudential Regular Gold Savings Fund HDFC Gold Fund Birla Sun Life Gold 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. 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How to decide between Investment and Tax Saving? Posted: 23 Apr 2014 04:41 AM PDT Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300     There is a need to ensure that there is a proper analysis of the entire benefits that are available both for the purpose of taxation as well as otherwise in terms of investment and the kind of returns that can be generated from the investment.   A lot of situations demand that the investor make a decision between a tax saving benefit and an investment benefit as these might not be pointing to the same direction. The choice for the investor is then between ensuring that the investment should be done or whether there should be a restriction on the amount of the investment to the extent that the tax benefit is actually available. The choice in this matter has to be considered with various parameters in mind and hence this becomes a crucial question. Here is a look at the issue with special reference to the PPF investment to see how the investor should tackle this situation.   The clash in PPF There is a tax benefit that is available for investments into the Public Provident Fund (PPF) where the amount that is invested qualifies for a deduction under Section 80C of the Income Tax Act. The total amount of deduction that can be claimed under this section is a sum total of Rs 1 lakh. There are a lot of other areas where the investments would get the benefit under the same section and hence this has to be considered in tune with the other investments so that the overall picture is available. The biggest risk that is faced by a lot of people is that they constantly exceed the Rs 1 lakh total limit due to the investment in other tax saving areas. The maximum amount that can be invested in the PPF is Rs 1 lakh so if the investor puts in the full amount the chances are very high that they would exceed the total Rs 1 lakh investment for tax purposes but the tax benefit would be restricted. The question now for the investor is whether they should make the full investment or should they restrict themselves to the extent that the tax benefit is available.   Analysis There is a need to ensure that there is a proper analysis of the entire benefits that are available both for the purpose of taxation as well as otherwise in terms of investment and the kind of returns that can be generated from the investment. This will help in making a final decision on the matter. As far as the taxation aspect is considered there is a deduction that is present but this can be got through other areas also so this is not the only route through which the benefit can be claimed. On the other hand when it comes to the investment aspect there is a tax free income that the individual will get when they make the investment here. This along with the actual rate of return earned through the interest rate has to be considered because this will show whether the investment can be preferred to other areas that are present.   Investment benefits The focus has to be on the investment benefits and if the current position is considered then the rate of interest is extremely high which is also tax free so when considered on this plane the return is something that cannot be obtained at other places. The other benefit is that the amount here compounds so this also enables the investor to gain at the end of the period of their investment which is quite long. Looking at these factors it makes sense for the investor to consider this as an investment option for their money also and hence this becomes a key consideration. This is the reason why investors can go and put in the maximum amount that is allowed by the PPF account even if they are not getting tax benefit for the full amount as this makes investment sense that will yield better returns than the other options in the market so it is proper allocation for their money.   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 Invest Any Mutual Fund Online Download Mutual Fund Application Forms from all AMCs Download Mutual Any Fund Application Forms --------------------------------------------- Best Performing Mutual Funds Largecap Funds Invest Online DSP BlackRock Top 100 Fund ICICI Prudential Focused Blue Chip Fund Franklin India Bluechip ICICI Prudential Top 100 Fund B. Large and Midcap Funds Invest Online ICICI Prudential Dynamic Plan HDFC Top 200 Fund UTI Dividend Yield Fund Birla Sun Life Front Line Equity Fund Franklin India Prima C. Mid and SmallCap Funds Invest Online Reliance Equity Opportunities Fund DSP BlackRock Small & Midcap Fund Sundaram Select Midcap IDFC Premier Equity Fund Birla Sun Life Dividend Yield Plus SBI Emerging Businesses Fund HDFC Mid-Cap Opportunities Fund ICICI Prudential Discovery Fund D. Small and MicroCap Funds Invest Online DSP BlackRock MicroCap Fund 2.Franklin India Smaller Companies E. Sector Funds Invest Online Reliance Banking Fund Reliance Banking Fund ICICI Prudential Banking and Financial Services Fund F. Tax Saver Mutual Funds Invest Online 1. ICICI Prudential Tax Plan 2. HDFC Taxsaver DSP BlackRock Tax Saver Fund Reliance Tax Saver (ELSS) Fund G. Gold Mutual Funds Invest Online Relaince Gold Savings Fund ICICI Prudential Regular Gold Savings Fund HDFC Gold Fund Birla Sun Life Gold 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 Invest in Tax Saving Mutual Funds Download Any Application Forms Buy Mutual Funds Online Invest Online Buy Gold Mutual Funds Invest Now

National Pension System - NPS or Retirement Plan Posted: 23 Apr 2014 04:01 AM PDT Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   NPS or Retirement Plan NPS is a savings scheme introduced by the Indian government that makes saving for your retirement years mandatory. There are various levels under which the investments are made.   The retirement days are considered to the golden days in a person's life where he or she only sits back and enjoys without having to care about the worldly problems. However, this idealistic situation can only be achieved if the person is financially well-off, as unfortunately most of life's problems stem out of an empty bank account! So if you want your retirement days to be hassle-free, you need to take some steps today. For starters, you must begin to save for the time when your monthly income will get discontinued. There are a number of ways in which this can be done and the two most potent tools are the National Pension System and the retirement insurance plans. Before you choose your saving platform, make sure you understand both these tools well. What is the National Pension System? The National Pension System (NPS) is a savings scheme introduced by the Indian government that makes saving for your retirement years mandatory. There are various levels under which the investments are made. First, if you are an employee of the Indian government, you will automatically become a part of the NPS. There will be equal amounts of contribution each month from you and the government and the total amount will be deposited in your pension fund. The fund will continue to build till you retire, after which you will be entitled to the benefits. Even if you switch jobs (within the government sector) or change your location, the pension fund will remain functional. All other non-government employees, who are Indian citizens between the ages of 18 and 55, can join the NPS. However, for such an employee, the government will make no contribution. What are retirement plans? Retirement plans are endowment policies sold by insurance companies. Here, a policyholder invests a large amount, either in lump sum or over a period of time and then after retirement, gets a monthly income from the fund he/she has built up. There are many different types of retirement plans such as immediate annuity plans, deferred annuity plans, life annuity plans and so on. The differences between the NPS and a retirement plan NPS Retirement Plan Coverage Life-long pension coverage for the person. Coverage till a fixed age. Withdrawal After the age of 60, the person can withdraw 60% of the fund value. The remaining 40% has to be invested in an annuity plan. 1/3rd of the fund value can be withdrawn at the time of retirement and the rest has to be invested in an annuity plan. Deposit norms A minimum of Rs.500 has to be deposited every month and a minimum of Rs.6,000 has to be deposited annually. Usually no fixed cap on the investment amount. If the policyholder has a lump sum amount in hand, he/she can invest it at any time.   What should I opt for? If you are a government employee, then you would automatically have a pension fund. Most private employees have one as well. However, if you have the resources, it is always advisable to buy a retirement plan as well, as that would provide you with an extra cover. Start saving early and you could benefit heavily by the time you retire.   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 Invest Any Mutual Fund Online Download Mutual Fund Application Forms from all AMCs Download Mutual Any Fund Application Forms --------------------------------------------- Best Performing Mutual Funds Largecap Funds Invest Online DSP BlackRock Top 100 Fund ICICI Prudential Focused Blue Chip Fund Franklin India Bluechip ICICI Prudential Top 100 Fund B. Large and Midcap Funds Invest Online ICICI Prudential Dynamic Plan HDFC Top 200 Fund UTI Dividend Yield Fund Birla Sun Life Front Line Equity Fund Franklin India Prima C. Mid and SmallCap Funds Invest Online Reliance Equity Opportunities Fund DSP BlackRock Small & Midcap Fund Sundaram Select Midcap IDFC Premier Equity Fund Birla Sun Life Dividend Yield Plus SBI Emerging Businesses Fund HDFC Mid-Cap Opportunities Fund ICICI Prudential Discovery Fund D. Small and MicroCap Funds Invest Online DSP BlackRock MicroCap Fund 2.Franklin India Smaller Companies E. Sector Funds Invest Online Reliance Banking Fund Reliance Banking Fund ICICI Prudential Banking and Financial Services Fund F. Tax Saver Mutual Funds Invest Online 1. ICICI Prudential Tax Plan 2. HDFC Taxsaver DSP BlackRock Tax Saver Fund Reliance Tax Saver (ELSS) Fund G. Gold Mutual Funds Invest Online Relaince Gold Savings Fund ICICI Prudential Regular Gold Savings Fund HDFC Gold Fund Birla Sun Life Gold 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 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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