Besides Share Market, Bank Fixed Deposits, Mutual Funds, ULIP's, there is another scheme which is quiet oldest and also one of the safest schemes for fixed returns as they are backed by Govt Of India, and are also the largest selling in both Urban and Rural India.
The Post Office Schemes :- A bunch of schemes offered by The postal department of India, and are available for everyone ranging from 100 Rs to Several Lacs with options of monthly and one time investments.
Here we will present the complete details of all investing schemes by the Indian Postal Department.
Why should you invest in Post Office Schemes
These schemes are offered by the Government of India.
Safe, secure and risk-free investment options.
No Tax Deduction at Source (TDS).
Nomination facility is available.
Nomination can be changed at any time
The instruments are transferable to any Post Office anywhere in India.
Attractive rates of interest.
Post Office Schemes:
Post Office Monthly Income Scheme
Post Office Time Deposit Scheme
Post Office Savings Account
National Savings Certificate
Kisan Vikas Patra
Govt schemes also offered through Post Offices:
Public Provident Fund
Senior Citizen's Savings Scheme
Do look at post office once for best and safe returns in a hassle free way.
Regards
Team
TheEquityMarkets
Thursday, September 9, 2010
Tuesday, August 24, 2010
Basic Tips About Car Insunace Policies
Introduction
If you are planning to buy a Car, it is worth paying attention on carious clauses on insuring your own vehicle. There are various factors like Insured’s Declared Value (IDV) and No Claim Bonus (NCB) will add or reduce the cost of your insurance. It is advisable to know the facts before you buy an car insurance. This website will give you basic idea on what are the various factors you have to consider while buying the Car insurance.
to read the full article please visit TheEquityMarkets
Do come back here to post your valuable comments and queries.
Regards
Team
The equity markets
If you are planning to buy a Car, it is worth paying attention on carious clauses on insuring your own vehicle. There are various factors like Insured’s Declared Value (IDV) and No Claim Bonus (NCB) will add or reduce the cost of your insurance. It is advisable to know the facts before you buy an car insurance. This website will give you basic idea on what are the various factors you have to consider while buying the Car insurance.
to read the full article please visit TheEquityMarkets
Do come back here to post your valuable comments and queries.
Regards
Team
The equity markets
Wednesday, August 18, 2010
Infrastructure Bonds- an In-Depth coverage
BUDGET 2010 saw the Finance Minister doling out sops to push infrastructure investments in the country. One key sop - the tax benefit to individuals on investment of up to Rs 20,000 in infrastructure bonds under section 80CCF. And this, over an above the current limit of Rs 1 lakh that section 80C provides.
The Central Board of Direct Taxes (CBDT) has now notified New Infrastructure Bonds. An individual or Hindu Undivided Family (HUF) can invest in these new infrastructure bonds up to Rs 20,000 in a financial year. LIC, IFCI, IDFC and other NBFCs classified as Infrastructure Company by RBI will be allowed to issue these bonds, called Long Term Infrastructure Bonds.
The minimum application amount for these bonds is Rs 5,000 and multiples thereof for each option.
The issue opens on August 9, 2010 and closes on August 31, 2010.
to know all in Depth like where to buy, how to invest, pros and cons, requirements, do's and dont's visit TheEquityMarkets
come back here for your queries
Regards
Alok
The Central Board of Direct Taxes (CBDT) has now notified New Infrastructure Bonds. An individual or Hindu Undivided Family (HUF) can invest in these new infrastructure bonds up to Rs 20,000 in a financial year. LIC, IFCI, IDFC and other NBFCs classified as Infrastructure Company by RBI will be allowed to issue these bonds, called Long Term Infrastructure Bonds.
The minimum application amount for these bonds is Rs 5,000 and multiples thereof for each option.
The issue opens on August 9, 2010 and closes on August 31, 2010.
to know all in Depth like where to buy, how to invest, pros and cons, requirements, do's and dont's visit TheEquityMarkets
come back here for your queries
Regards
Alok
Thursday, August 12, 2010
Cashless Medical Claims Dispute between Hospitals and Insurance Companies
There was this furor over the withdrawal of cashless settlements, in case of Medical insurance policies by PSU insurers. Newspaper & Magazine headlines screamed sensationally - “take cash with you, even if you are cashless”.
The root problem has been around for long. Only that, it has now boiled over. Medical Insurance is an area where insurers have been making losses. Overcharging by hospitals and doctors & various frauds, has been prevalent, in those cases who have medical insurance.
Finally, PSU insurers pulled the plug and withdrew cashless settlement in all, but a selected list of Preferred Provider Network (PPN). This was met with howls of protest. FICCI came out strongly that the insurers cannot unilaterally withdraw something they have promised to their policyholders. Hospitals understandably protested. Policy holders got worried about this sudden turn of events.
Many policy holders were serenaded with offers from private insurers, who made a virtue of the fact that Cashless settlement are still available through them, across the board.
I have been poured with queries from people who want to know if they should go to private insurers, due to the cashless option being available across the board, in their case. I have been counseling them not to take hasty decisions, as
1) What has happened with PSU insurers can happen with private insurers as well, because the overbilling problem is faced by both
2) PSU insurers may soon negotiate with all major hospitals and bring them back on board – it’s just a matter of time.
PSU insurer’s premiums have generally tended to be lower and that is in the interest of the policyholder.
Policyholders have traditionally turned a blind eye to charges, as long as they could be covered by the policy. This is a serious mistake ethically and even in their interest. If there is overcharging, the balance amount in the Sum Assured available for claims in the year, reduces; also, premium can go up more due to the higher claims. It is in the interest of the policy holders to look out for padding in the charges.
We all have access to someone in the medical field. We can ask around and find out, how much a particular procedure could cost. One would at least get a ballpark figure, that way. Ideally, if it is not an emergency, find out in advance what the hospitals and doctors would charge for the particular treatment. If you have done this exercise properly, you could save a packet. Knowledge is power. The charges can be brought down, using these as bargaining chips. I know people who have done it.
Another odious practice is the principle of charging everything based on the class of room, one is admitted in. For instance, a person from general ward is charged less for the same procedure by the same doctor, in the same operation theater, with the same facilities as compared to another from a deluxe room. There is no logic here – it is just that those in deluxe room can afford to pay more. This is the system that has gained root and has been followed without questions. This is a matter the health ministry needs to address. Loot the rich (or relatively better off), seems to be the motto... Our government does that too - for paying taxes, you don’t get anything in return, except for the “possibility” of good governance, which is marked by its absence. For now, if you want to pay less choose the lower level room or general ward.
Insurance companies need to address it by negotiating with various hospitals, which they will, as it is a matter of survival. It is ironical that insurance companies are overcharged by hospitals, when they give them so much business. If anything, they should be given volume discounts. There is a saying which goes – the child that cries will get the milk. The insurance companies have only now started… hospitals & doctors will have to fall in line… or lose business to others who are sensible enough to see reason.
Feel free to drop in with your queries.
Regards
Team
Theequitymarkets
The root problem has been around for long. Only that, it has now boiled over. Medical Insurance is an area where insurers have been making losses. Overcharging by hospitals and doctors & various frauds, has been prevalent, in those cases who have medical insurance.
Finally, PSU insurers pulled the plug and withdrew cashless settlement in all, but a selected list of Preferred Provider Network (PPN). This was met with howls of protest. FICCI came out strongly that the insurers cannot unilaterally withdraw something they have promised to their policyholders. Hospitals understandably protested. Policy holders got worried about this sudden turn of events.
Many policy holders were serenaded with offers from private insurers, who made a virtue of the fact that Cashless settlement are still available through them, across the board.
I have been poured with queries from people who want to know if they should go to private insurers, due to the cashless option being available across the board, in their case. I have been counseling them not to take hasty decisions, as
1) What has happened with PSU insurers can happen with private insurers as well, because the overbilling problem is faced by both
2) PSU insurers may soon negotiate with all major hospitals and bring them back on board – it’s just a matter of time.
PSU insurer’s premiums have generally tended to be lower and that is in the interest of the policyholder.
Policyholders have traditionally turned a blind eye to charges, as long as they could be covered by the policy. This is a serious mistake ethically and even in their interest. If there is overcharging, the balance amount in the Sum Assured available for claims in the year, reduces; also, premium can go up more due to the higher claims. It is in the interest of the policy holders to look out for padding in the charges.
We all have access to someone in the medical field. We can ask around and find out, how much a particular procedure could cost. One would at least get a ballpark figure, that way. Ideally, if it is not an emergency, find out in advance what the hospitals and doctors would charge for the particular treatment. If you have done this exercise properly, you could save a packet. Knowledge is power. The charges can be brought down, using these as bargaining chips. I know people who have done it.
Another odious practice is the principle of charging everything based on the class of room, one is admitted in. For instance, a person from general ward is charged less for the same procedure by the same doctor, in the same operation theater, with the same facilities as compared to another from a deluxe room. There is no logic here – it is just that those in deluxe room can afford to pay more. This is the system that has gained root and has been followed without questions. This is a matter the health ministry needs to address. Loot the rich (or relatively better off), seems to be the motto... Our government does that too - for paying taxes, you don’t get anything in return, except for the “possibility” of good governance, which is marked by its absence. For now, if you want to pay less choose the lower level room or general ward.
Insurance companies need to address it by negotiating with various hospitals, which they will, as it is a matter of survival. It is ironical that insurance companies are overcharged by hospitals, when they give them so much business. If anything, they should be given volume discounts. There is a saying which goes – the child that cries will get the milk. The insurance companies have only now started… hospitals & doctors will have to fall in line… or lose business to others who are sensible enough to see reason.
Feel free to drop in with your queries.
Regards
Team
Theequitymarkets
Sunday, July 11, 2010
Effect of new Guidlines By IRDA On ULIP's
Why ULIP’s are not good choice?
ULIP is one of the most controversy product in the financial world. It is because of its high management charges and commission to the agents. The situation has changed after the chain of events like controversy on agents commission and SEBI’s ban on ULIP policies. The cap for charges on ULIP policies have been reduced by IRDA. It becomes the more competitive to mutual funds.
What was the charges on ULIP policy?
ULIP policies got the very bad name among the investors because of its high charges levied for the first three years. This section explores the different expenses charged on the ULIP policies.
Most of the ULIP policies charges more fees for the first three years. Basically insurance companies would charges the following fees on the ULIP:
* Initial administration charge
o Most of this charges are goes to the agents who is selling the policy to you. Agents are getting up to 40% commission from the ULIP policies. Worst fact is that this commission is paid from your premium amount. As we know that ULIP premiums are invested in the market, the final amount invested is reduced because of the charges.
* Regular administration charge
o This is as like the Initial administration charge, goes to paying the agents commission.
* Policy administration fee
o This fees levied for sending you the periodic updated on the policy status. It occurs every month.
* Investment management charge
o This fees levies for managing your fund. Normally this type of charges are levied some percentage on the total fund value.
* The charges are different from each insurance company. Few companies charge the whole amount in the first three years, but some of the companies to charge little on entire tenure of the policy.
* Agents mis-sell ULIPs by saying that you have to pay only for the first three years, after that you need not pay anything. It is because they get the high commission on first three years.
ULIP Reforms
There are number of changes done on nature of the ULIP since October 2009. It makes ULIP more attractive to the investors compare to the previous one with high cost deductions.
* ULIP with less than 10 Years
o There is 3% cap on charges levied by the insurance companies on ULIP. It means, the total fees collected on ULIP premiums can not exceed 3%. It is defined as difference between net yield and gross yield should not exceed 3%.
o In the above 3%, the management fee can not be more than 1.5%.
o Gross yield is the yield generated by the ULIP before all charges are deducted.
o Net yield is the yield generated by the ULIP after all charges are deducted.
* ULIP with greater than 10 years
o Over all fees can not be more than 2.25%.
o Management fees can not be more than 1.25%.
* Remember that charges here would include allocation charge, administration charge, mortality charge and all such charges by any other name. The total fees would reduce when you opt for the long term investment.
* Unit-linked insurance products (ULIPs) filed after September 30, 2009 will have a lock-in of five years.
* According to the IRDA, there will be new norms on tightening the commission and fees on ULIP products. It is trying hard to make the investment more attractive for the investors.
* The new norms will have the high life cover, in the existing policies have the high focus on the investment rather than the protection on life. IRDA want to bring more clarity on the life cover and investment portion on the same product. This make investors to clearly understand how much is invested and how much is insured.
* In order to put more money in the hands of investors, IRDA recently said that insurers cannot charge a fee for surrendering a unit-linked insurance policy after five years.
* At present, insures charge more fees on surrendering the policy even after the completion of the lock-in period.
What you should look at ULIP
When you are planning to buy the ULIP policy, it is necessary to look into the following facts to make the right decision. The problem in choosing the right policy among hundreds of existing policies is taunting task for the investors. The following are the few factors you have to look at while selecting the ULIP:
* You must know what is the purpose of buying the ULIP policy. If your goal is to buy a life insurance, then ULIP is not the right choice. This is the place where many investors mis-understand the difference between insurance and investment. ULIP is combination of life cover with investment product.
* If you are looking for the investment with low risk, then ULIP will not be suitable for you. As I have explained earlier, your premiums are directly invested in the market. The returns are based on market conditions.
* Don’t go the way of agents guidance. You will regret for that in future. You must be careful on protecting your own money. Don’t blame others for your mistake. Do the proper analysis on available ULIP policies and make the right decision.
* ULIP is not for the short term investment. If you are looking for the investment product for less than five years, mutual funds can be good choice. If you are looking for the investment of minimum 10 years, ULIP will be better option.
* One of the important factor, know the charges deducted on your premiums. Ask your agents clearly that how much will be invested after deducting all the charges. Also ask him the commission earned on selling the policy to you. He must disclose the commission details to you.
* Ask too many questions to agent for better understanding of the policy.
Say Thanks to SEBI!!!
I would see these reforms and changes on the ULIP policies because of the increasing competition from the SEBI over IRDA. ULIP investors must say thanks to SEBI for putting pressure on IRDA to introduce new norms on ULIP policies. However IRDA wins over SEBI in the battle. I feel customer finally won the battle. The reason why IRDA has reduced the fees on ULIP, because SEBI has removed the 1% entry fees on mutual funds.
For furthur queries contact us
Happy Investing
Regards
Team
Theequitymarkets
ULIP is one of the most controversy product in the financial world. It is because of its high management charges and commission to the agents. The situation has changed after the chain of events like controversy on agents commission and SEBI’s ban on ULIP policies. The cap for charges on ULIP policies have been reduced by IRDA. It becomes the more competitive to mutual funds.
What was the charges on ULIP policy?
ULIP policies got the very bad name among the investors because of its high charges levied for the first three years. This section explores the different expenses charged on the ULIP policies.
Most of the ULIP policies charges more fees for the first three years. Basically insurance companies would charges the following fees on the ULIP:
* Initial administration charge
o Most of this charges are goes to the agents who is selling the policy to you. Agents are getting up to 40% commission from the ULIP policies. Worst fact is that this commission is paid from your premium amount. As we know that ULIP premiums are invested in the market, the final amount invested is reduced because of the charges.
* Regular administration charge
o This is as like the Initial administration charge, goes to paying the agents commission.
* Policy administration fee
o This fees levied for sending you the periodic updated on the policy status. It occurs every month.
* Investment management charge
o This fees levies for managing your fund. Normally this type of charges are levied some percentage on the total fund value.
* The charges are different from each insurance company. Few companies charge the whole amount in the first three years, but some of the companies to charge little on entire tenure of the policy.
* Agents mis-sell ULIPs by saying that you have to pay only for the first three years, after that you need not pay anything. It is because they get the high commission on first three years.
ULIP Reforms
There are number of changes done on nature of the ULIP since October 2009. It makes ULIP more attractive to the investors compare to the previous one with high cost deductions.
* ULIP with less than 10 Years
o There is 3% cap on charges levied by the insurance companies on ULIP. It means, the total fees collected on ULIP premiums can not exceed 3%. It is defined as difference between net yield and gross yield should not exceed 3%.
o In the above 3%, the management fee can not be more than 1.5%.
o Gross yield is the yield generated by the ULIP before all charges are deducted.
o Net yield is the yield generated by the ULIP after all charges are deducted.
* ULIP with greater than 10 years
o Over all fees can not be more than 2.25%.
o Management fees can not be more than 1.25%.
* Remember that charges here would include allocation charge, administration charge, mortality charge and all such charges by any other name. The total fees would reduce when you opt for the long term investment.
* Unit-linked insurance products (ULIPs) filed after September 30, 2009 will have a lock-in of five years.
* According to the IRDA, there will be new norms on tightening the commission and fees on ULIP products. It is trying hard to make the investment more attractive for the investors.
* The new norms will have the high life cover, in the existing policies have the high focus on the investment rather than the protection on life. IRDA want to bring more clarity on the life cover and investment portion on the same product. This make investors to clearly understand how much is invested and how much is insured.
* In order to put more money in the hands of investors, IRDA recently said that insurers cannot charge a fee for surrendering a unit-linked insurance policy after five years.
* At present, insures charge more fees on surrendering the policy even after the completion of the lock-in period.
What you should look at ULIP
When you are planning to buy the ULIP policy, it is necessary to look into the following facts to make the right decision. The problem in choosing the right policy among hundreds of existing policies is taunting task for the investors. The following are the few factors you have to look at while selecting the ULIP:
* You must know what is the purpose of buying the ULIP policy. If your goal is to buy a life insurance, then ULIP is not the right choice. This is the place where many investors mis-understand the difference between insurance and investment. ULIP is combination of life cover with investment product.
* If you are looking for the investment with low risk, then ULIP will not be suitable for you. As I have explained earlier, your premiums are directly invested in the market. The returns are based on market conditions.
* Don’t go the way of agents guidance. You will regret for that in future. You must be careful on protecting your own money. Don’t blame others for your mistake. Do the proper analysis on available ULIP policies and make the right decision.
* ULIP is not for the short term investment. If you are looking for the investment product for less than five years, mutual funds can be good choice. If you are looking for the investment of minimum 10 years, ULIP will be better option.
* One of the important factor, know the charges deducted on your premiums. Ask your agents clearly that how much will be invested after deducting all the charges. Also ask him the commission earned on selling the policy to you. He must disclose the commission details to you.
* Ask too many questions to agent for better understanding of the policy.
Say Thanks to SEBI!!!
I would see these reforms and changes on the ULIP policies because of the increasing competition from the SEBI over IRDA. ULIP investors must say thanks to SEBI for putting pressure on IRDA to introduce new norms on ULIP policies. However IRDA wins over SEBI in the battle. I feel customer finally won the battle. The reason why IRDA has reduced the fees on ULIP, because SEBI has removed the 1% entry fees on mutual funds.
For furthur queries contact us
Happy Investing
Regards
Team
Theequitymarkets
Subscribe to:
Posts (Atom)