Prajna Capital |
- Life Insurance covers with a rider
- Price to Book Value ratio
- Ensure policy proceeds reach the right person
| Life Insurance covers with a rider Posted: 02 Nov 2014 05:54 AM PST Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Leave a missed Call on 94 8300 8300 Life Insurance covers with a rider When buying an insurance policy, your agent or insurance company would most often recommend an additional cover over and above your policy. This additional cover is known as a Rider. A Rider is an added benefit that you could opt for along with your base policy. Available at an extra cost it lets you customize your policy to suit your specific needs. Usefulness of a rider Basic features: · Enhances your insurance cover · Can be attached to any kind of insurance policy · Customizes your policy to suit your specific risks · Available at a much lower cost than the base policy · Tax breaks under Section 80C and 80D depending on the nature of rider Rider Costs Choosing a Rider: Rider versus stand alone policies: To start with riders are cheaper than stand alone policies. They offer limited benefits though in comparison to stand alone policies. Riders automatically lapse once the base policy is surrendered, lapsed or discontinued. On the other hand, a standalone policy for the same cover would cost you more but in return would give you a wider and more comprehensive protection. If you are looking for a specific protection for a limited duration, a rider may work out as a better option. If it a complete comprehensive protection is what you seek a standalone policy should be your choice. The choice thus must stem from your individual needs. An evaluation of your circumstances, occupation, lifestyle and family would give you a clear picture of what are the risks specific to you. The Common types of Riders:
Critical illness rider: Pays a certain amount in the event of diagnosis of a critical illness during the term of the policy. The diagnosed illness must be within the purview of the insurance company's defined categories of critical illnesses. Income benefit rider In case of death of the life assured during the term of the policy, 10% of the rider sum assured is paid annually to the beneficiary, on each policy anniversary till maturity of the rider. Term Rider: An endorsement or attachment to a life insurance policy that provides additional term coverage for the amount specified. If the insured dies during this time, the designated beneficiary(ies) can receive death benefit proceeds. 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
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: 02 Nov 2014 04:27 AM PST Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Leave a missed Call on 94 8300 8300 Price to Book Value ratio
· Book Value is the total value of the company's assets that equity shareholders would get if a company were to be liquidated. Book value is the actual value of a company when all liabilities are deducted from its assets and equity. It values the company based on its net assets value. The market-cap of the company is compared with its book value to evaluate whether a stock is undervalued or overvalued. Since the book value is less volatile compared to company's profits and dividends, price to book value ratio is one of the more reliable ratios. How to interpret Price to Book Value ratio The ratio determines whether a stock is undervalued or overvalued. Ratio of 1 or less than1 indicates that a company is either undervalued or it is in a declining business. Ratio of more than 1 indicates that a company is either overvalued or the market is willing to pay higher premium above company's assets. Price to book value ratio may differ for various sectors. Private banks quote at a higher price to book value ratio compared to public sector banks. However, asset quality of private banks is far superior compared to public sector banks. One should not consider negative price to book value ratios during analysis. Formula Price to Book Value = Current Market Price Book value per share Book Value = (Total Assets Intangible Assets & Liabilities) Total equity shares Example Current market Price Rs 100 Book Value per share: Rs 200 P/BV: 0.5 (100/200) 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
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 |
| Ensure policy proceeds reach the right person Posted: 02 Nov 2014 01:42 AM PDT Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Leave a missed Call on 94 8300 8300 Ensure policy proceeds reach the right person Businessmen with liabilities can buy an insurance policy under the Married Women's Property Act to insulate the family from any default Sahil Sharma, on one hand, is pleased that he survived the Kashmir floods. But, on the other, he is worried that if anything had happened to him, his family would have found themselves in a financial mess. When he visited an insurance company's office, he was given multiple choices of plans – endowment plans, immediate annuity, child plans, pension plan, and one particular plan which distributed the life insurance proceeds in instalments. The problem The plans did not convince Sharma that the money would be used in the way he wanted – a genuine concern. Ensuring proper distribution and usage of life insurance proceeds is a very genuine concern. However, the answer to this apprehension does not lie in only buying insurance products. Sharma wasn't able to find a solution to his queries as he was approaching an insurance agent for solutions that were way beyond his scope. An insurance agent, at best, can give a proper insurance plan. But he/ she cannot ensure that the insurance proceeds are used in a particular way. That comes under estate planning. He actually needs a financial planner to answer his doubts. Adequate coverage Financial planning is a wide concept and not limited to making investments or buying insurance as it is popularly known. The answer to Sharma's query can be achieved by properly allocating funds for various goals. First, one needs to understand the importance of adequate insurance coverage. It's not just about having an endowment or unit- linked insurance plan with coverage of 10- 15 times of annual income. Neither is it about buying child insurance policies with some income protection cover. It's about providing for all his financial responsibilities like children's education, marriage, spouse's day- today expenses and lifestyle, loans, parents well being, etc. For all this, there has to be detailed and satisfactory calculation put in place which will further guide him towards the solutions he is seeking. Proper nomination While buying insurance policy, he should make sure that there is proper nomination. There is a provision to have multiple nominees in a life insurance policy. Make nominations, according to the insurance plan and calculations. For instance, if he wants to provide ₹ 20 lakh for his children's education through ₹ 2 crore of insurance policy, then it is better to nominate each child for 10 per cent of sum assured. This will help in two ways. One, the money gets earmarked for a particular goal. Two, this will create a separate tax file in the name of child which will further help in tax planning. This step should be accompanied with writing of will with bequests aligned with the nominations. Married Women's Property Act An insurance policy can also be bought under Married Women's Property Act ( MWP Act). This is generally advisable for businessmen whose business operations involve taking loans. In this kind of structure, lenders normally ask for collateral or some kind of security from the borrower. Often, the personal assets of the borrower get mortgaged in the process. Buying insurance policy under the MWP Act can secure the policy amount for the benefit of spouse and kids. In case of untimely death of the borrower, creditors/ bankers recover the loan amount by selling the assets and other collaterals and there might be attachment of other assets of the borrower, as directed by judiciary. This could include proceeds of life insurance policies. But, if the Insurance policy was purchased under MWP Act, creditors cannot claim any amount from the policy proceeds and thus the claimed amount becomes available to the nominees. Registering a policy under MWP Act is a very easy process. The proposer just has to fill up one separate form meant for this and submit it along with the Insurance proposal form. Do note that registration of a policy under MWP Act is possible only at the time of purchase of the policy and not at a later date. Setting up a trust Forming a trust and assigning the policy to trust can help. Typically, people stay away from forming trusts as it sounds like a very complicated process. However, it is not so. While forming a trust, one has to appoint a trustee and alternate trustee who look after the management of the trust money. That trustee can be the sponsor himself, one who has formed the trust and a professional on whom the sponsor has faith in, for the proficient management of money. Once a private trust formed, the life insurance policy money can be assigned to that private trust. The sponsor can specify the conditions for the trust money, on how this should be managed and also on trustees, to work in a specified manner. Involve family members The measures that are outlined above can ensure the proper distribution of the sum assured proceeds, but to ensure the proper usage of funds, the most important and easiest way is to involve family members in family financial decisions making. They should always be aware of your financial status. More importantly, the amounts or insurance or other assets you have. And of course, they should also know about your liabilities so that people do not cheat them. Share all the documents with them, in fact, they should have a copy of all critical documents. They should be educated about the usage of funds whenever required. They should have the details of your financial planner, doctor, advocate, etc. Involve them in financial planning process. This will also help you in management of your finances during your lifetime, besides being confident that money will be used in the same way as you intended to after your demise. The first step Sharma should take is to have a detailed financial plan, from an investment adviser registered with the Securities and Exchange Board of India. He should involve his wife in the whole process. The adviser will guide him on all his queries and how to work on it and then everything will fall in place. Buying insurance, making investments or asset building is of no use until you ensure the proper distribution and usage of the same. 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
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 |
| You are subscribed to email updates from Prajna Capital - An Investment Guide To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 1600 Amphitheatre Parkway, Mountain View, CA 94043, United States | |
No comments:
Post a Comment