Imagine your wealth as a magnificent sandcastle, painstakingly built grain by grain, representing your hard work and financial achievements. You’ve focused on building impressive towers of investments and carefully planning your retirement landscape. But what happens when the unexpected storm of life rolls in – a sudden illness, an unforeseen accident, or a devastating natural disaster? This is where the unsung hero of wealth management steps in: insurance. While financial planning, retirement strategies, investment management, tax optimization, and estate planning are all vital components of a holistic wealth management approach aimed at protecting, preserving, and growing your assets, it’s insurance that acts as the invisible yet indispensable shield, safeguarding your hard-earned creation from potential ruin. The role of insurance in wealth management isn’t just about mitigating losses; it’s about providing a foundation of security that allows your wealth to grow sustainably and be passed on effectively. Here’s why it deserves a prominent place in your Wealth plan: Protecting Your Assets from Catastrophic Loss: Life is unpredictable. Accidents happen, illnesses strike, and natural disasters occur. Without adequate insurance coverage, a single unforeseen event can decimate your carefully accumulated wealth. Homeowner’s/Property Insurance: Safeguards your most significant asset against damage or loss due to fire, theft, natural disasters, and liability claims. Auto Insurance: Protects you financially in case of accidents, damage to your vehicle, and liability for injuries or property damage caused to others. Health Insurance: Ensures access to necessary medical care without the burden of exorbitant costs that can quickly erode savings. Safeguarding Your Income and Future: Your ability to earn income is your most valuable asset. What happens if you’re suddenly unable to work due to illness or injury? Life Insurance: Provides financial security for your loved ones in the event of your untimely passing, helping them maintain their lifestyle, cover debts, and fund future needs like education. Different types of life insurance cater to various needs and stages of life. Disability Insurance: Replaces a portion of your income if you become disabled and unable to work, ensuring financial stability during a challenging time. Mitigating Liability and Legal Risks: In today’s litigious society, the risk of being sued is a real concern. Insurance can provide crucial protection against legal liabilities. Liability Coverage (within Home and Auto Policies): Helps cover legal costs and settlements if you’re found responsible for injuries or property damage to others. Umbrella Insurance: Provides an extra layer of liability protection above and beyond your existing home and auto policies, offering significant peace of mind. Indemnity insurance : Professional indemnity insurance is crafted to shield professionals and businesses against financial losses arising. It also covers legal costs and settlements if a client alleges that the professional’s work caused harm to their finances or reputation. Eg used by Doctors, lawyers etc. Facilitating Estate Planning and Wealth Transfer: Insurance plays a vital role in ensuring a smooth and efficient transfer of wealth to your beneficiaries. Life Insurance (for Estate Taxes): Can provide the necessary liquidity to cover estate taxes, preventing the forced sale of assets to meet these obligations. Irrevocable Life Insurance Trusts (ILITs): A sophisticated estate planning tool that can help minimize estate taxes and ensure your life insurance proceeds are passed on according to your wishes. Providing Peace of Mind and Enabling Strategic Risk-Taking: Knowing that you have a safety net in place allows you to approach wealth-building with greater confidence. You might be more willing to take calculated risks in your investments knowing that your fundamental financial security is protected. Integrating Insurance into Your Wealth Management Plan: Insurance shouldn’t be an afterthought; it should be an integral part of your overall wealth management strategy. This involves: Comprehensive Needs Assessment: Understanding your individual risks, assets, liabilities, and future goals. Choosing the Right Coverage: Selecting policies and coverage amounts that adequately address your specific needs. Regular Review: Periodically reviewing your insurance policies to ensure they still align with your evolving circumstances. Working with Professionals: Collaborating with both a financial advisor and an insurance professional to develop a holistic plan. In Conclusion: While the allure of high returns and investment strategies is undeniable, neglecting the foundational role of insurance in wealth management is a significant oversight. Insurance is not just an expense; it’s an investment in the security and longevity of your wealth. By proactively addressing potential risks through adequate coverage, you can protect your hard-earned assets, safeguard your future, and ultimately achieve your long-term financial goals with greater peace of mind. So, the next time you’re reviewing your wealth management plan, make sure insurance has a prominent seat at the table – it’s the unsung hero working tirelessly behind the scenes to protect everything you’ve built. Take a moment today to review your insurance policies and ensure they are providing the robust protection your wealth deserves. Consider speaking with us to integrate insurance effectively into your wealth management plan.
Financial planning in simple terms is a regular approach to meet one’s life financial goals. Financial planning is a process which provides you a systematic and planned way to reach these goals while avoiding any surprises . A financial plan acts as a guide throughout your life’s journey. In today’s fast-paced world, it’s easy to feel overwhelmed by financial pressures. Whether you’re saving for a down payment, planning for retirement, or simply trying to make ends meet, a solid financial plan can provide the clarity and confidence you need to achieve your goals. A Financial planner is the one who is a qualified investment professional who helps individuals meet their long-term financial objectives or goals. These professionals do their work by consulting with clients to analyse their goals, risk tolerance , and life stages , and identify suitable classes of investments for them. Why is Financial Planning Important? Increase saving : Though saving can be done without a financial plan , when you plan you get a good deal of insights on how you are saving and what expenses can you cut down. Achieve your goals: A financial plan provides a clear path to achieving your financial aspirations. Reduce stress: Knowing where your money is going can alleviate financial anxiety. Build wealth: Effective financial planning can help you grow your wealth over time. Prepare for the unexpected: A solid plan can help you weather financial storms. A solid financial planning is a very important instrument for personal finance, so lets look at what are the key steps. Key Steps to Financial Planning: Realistic Goals: Start by identifying your short-term, medium-term, and long-term financial goals and assigning them priorities. Make sure your goals are specific, measurable, achievable, relevant, and time-bound (SMART). Eg. How much would you need for child education and when would that be required. Create a Budget: Track your income and expenses. Identify areas where you can cut back. Make an elaborate sheet of all your income sources and expenses. You can use spreadsheet to look at them ( we have one created which we been using since last 10 years ) Manage Debt: Prioritize paying off high-interest debt. Consider debt consolidation options. Invest Wisely: Diversify your investments to reduce risk. Consider your risk tolerance and time horizon. Seek professional advice if needed. Protect Your Assets: Ensure you have adequate health, life, and property insurance. Create an emergency fund to cover unexpected expenses. Make Asset allocation The all the above culminates into your assets allocation What all assets and how much amount you can hold Review and Adjust: Regularly review your financial plan and make adjustments as needed As you grow your income, expenditure and lifestyle changes, you need to keep changing the plan along the way It’s not just limited to individuals, a lot of external factors also change. Seeking Professional Advice: While you can create a financial plan on your own, consider seeking advice from a qualified financial advisor. They can provide personalized guidance and help you make informed decisions. We will discuss about some duties and responsibilities of a financial planner Provide financial planning and investment advisory services Research and present investment strategies Develop and execute goals planning Implement risk management and tax planning strategies Help with estate planning Help to develop financial plan and execute the same with client Keep reviewing and make changes as and when required . In Conclusion: Think of financial planning as mapping out a journey to your desired financial future. This article delved into why creating such a plan is crucial, and provided practical steps. However, a plan remains just an idea until it’s put into action. The sooner you begin implementing your financial strategy, the simpler the process becomes, and your odds of reaching your objectives significantly improve. So, what’s holding you back? We trust you found this information valuable. If so, please consider sharing it with your network, so more people can be benefited . Should any aspect of our explanation require further clarification, please don’t hesitate to ask in the comments below or reach us . We’ll be happy to provide answers.
A medical emergency requiring hospitalisation brings significant anxiety. During such times, the security of a health insurance plan is paramount. We invest in these plans expecting our medical bills to be covered, allowing us to focus on recovery. However, the distress of a rejected claim, forcing out-of-pocket payments, can be devastating. According to the Insurance Regulatory and Development Authority of India’s (Irdai’s) annual report for 2023-24, health and general insurers paid 82% of claims by volume and 71.3% by value (Rs 1.17 crore). However, of the remaining 28.7% by value, nearly 13% were rejected, and over 9% were repudiated. Understanding the difference between rejection and repudiation is essential. “Rejection” typically occurs before a detailed review, often due to incomplete information and is reversible. “Repudiation” results from a thorough review, where the insurer determines the claim is not covered under the policy’s terms. Incorrect or Incomplete Information: Errors in claim forms, such as incorrect policy numbers, misspelled names, or inaccurate medical details, are a primary cause of claim denials. These errors lead to significant rework, prolonged communication, and considerable anxiety for policyholders. To minimise these issues, it is strongly recommended that you personally complete all application and claim forms. Relying on agents or other individuals can increase the risk of inaccuracies, as they may lack complete or up-to-date information. Solution: Thoroughly verify all information before submitting a claim, ensuring it aligns precisely with your policy documents and medical records. Furthermore, utilizing cashless claim facilities at network hospitals can significantly reduce the potential for errors and streamline the claim process. Discrepancies in Diagnosis, Treatment, and Pre-Authorization: Inconsistencies between the diagnosis or treatment listed on the claim form and the corresponding medical records, or treatments falling outside the policy’s coverage, can lead insurers to view claims as potentially fraudulent, resulting in denial. Furthermore, many treatments or procedures necessitate prior approval, or pre-authorization, from the Best insurance company Delhi. Proceeding with such treatments without obtaining the required approval will likely result in claim rejection. Solution: To prevent denials due to discrepancies or lack of pre-authorization, it is crucial to seek pre-authorization from your insurer for any non-routine or costly treatments before commencing them. Treatments undertaken without the insurer’s prior approval may not be eligible for reimbursement. Non-Disclosure of Pre-Existing Conditions: Failure to disclose pre-existing medical conditions during policy purchase can lead to claim rejection. While some individuals may conceal this information to avoid higher premiums or policy denial, this practice is strongly discouraged. It’s important to note that, regrettably, some advisors may suggest concealing information to facilitate a sale. However, this is unethical and ultimately detrimental to the policyholder. Solution: Honesty and transparency regarding your medical history are paramount when applying for insurance. It is crucial to declare all pre-existing conditions and relevant family medical history. This ensures accurate policy issuance and prevents future claim denials. Claims During the Waiting Period: Most health insurance policies include waiting periods for specific conditions or treatments. Claims submitted within these periods will be denied. It is essential to understand these waiting periods when purchasing a policy. Typically, there are three main types: Initial 30-Day Waiting Period: This is a standard period at the beginning of the policy. Waiting Period for Specified Illnesses: This period applies to specific conditions listed in the policy. Waiting Period for Pre-Existing Diseases: This period applies to conditions present before the policy’s inception. These waiting periods are detailed in policy brochures and policy wordings. Solution: Thoroughly understand your policy’s waiting periods and plan treatments accordingly. Reputable advisors should clearly explain these periods. At Wealthinn, we prioritize transparency by providing comprehensive information about waiting periods to our customers from the outset. Policy Lapses Due to Non-Payment of Premiums: Failure to pay premiums on time results in policy lapse, suspending coverage and leading to claim rejections. Once a policy expires due to non-renewal, the insurer is not obligated to cover medical expenses. Every policy has a defined validity period, requiring renewal through premium payment before the due date. While a grace period is typically provided, its duration varies between insurers. Exceeding both the due date and the grace period renders the policy null and void. Solution: Maintain continuous coverage by ensuring timely premium payments. Consider setting up automatic payments to avoid missed deadlines. Here’s a refined version of that section, focusing on clarity, professionalism, and a more effective presentation of your video resource: Treatments Not Covered by the Policy (Exclusions): Health insurance policies contain a comprehensive list of exclusions, detailing treatments and procedures that are not covered. Claims for excluded treatments will be denied. Common exclusions often include: Dental treatments Mental health conditions Outpatient department (OPD) expenses Maternity-related claims For a more detailed explanation of common exclusions, please refer to our video : Click here to check the video Solution: Thoroughly review your policy documents to understand the specific list of exclusions. While our video provides a general overview, it is essential to consult your individual policy documents for precise details. Policy documents are the only source of truth for your specific policy coverage. Check here the video. Delay in Claim Intimation or Filing: Insurance companies establish strict deadlines for claim notification. Each policy has a specific timeframe within which the insurer must be informed of a claim. Failure to notify the insurer within this stipulated period can result in claim denial. Delays in claim intimation significantly jeopardize the chances of a successful claim. Solution: Familiarize yourself thoroughly with your insurer’s claim notification deadlines and adhere to them strictly. These deadlines are typically outlined in your policy documents. Utilizing your insurer’s mobile application can provide convenient access to these deadlines and streamline the notification process. Exhaustion of Sum Insured: When medical expenses surpass the policy’s sum insured, the excess amount is not covered. If the sum insured has been fully utilized in previous claims within the same policy year, no further claims can be filed. Similarly, if a single claim exceeds the sum insured, the insurer will only reimburse up to the limit of
Choosing the right health insurance plan can feel like navigating a maze. With so many options available in India, it’s easy to get overwhelmed. But don’t worry! This guide will walk you through seven crucial tips to help you select the perfect health insurance plan for your needs and budget. A well-chosen plan can be your financial safety net during medical emergencies, so let’s get started! Consider the claim settlement ratio and Complaints per 10000 of policy claims Look for insurers with a high claim settlement ratio, which indicates their efficiency in processing claims. A high claim settlement ratio indicates the insurer’s reliability in paying out claims. Research the insurer’s claim settlement history and look for a good track record. But this also has pitfalls in which an insurer might pass small claims but do not clear the large amount claims. So, also look at how many complaints are being registered per 10000 of policy claims. This Would help give you a much better idea on if your insurer is fair in its settlement or people have to register complaints. Assess Your Healthcare Needs: Before diving into policies, take a moment to understand your individual and family’s health care requirements. Consider factors like age, pre-existing conditions, family medical history, and lifestyle. Are you looking for basic coverage or something more comprehensive? Do you need coverage for specific illnesses? Do you need maternity benefits? Do you need OPD benefits? Answering these questions will help you narrow down your options and avoid paying for unnecessary features. Understand the Coverage and Benefits: Don’t just focus on the premium; scrutinize the policy’s coverage and benefits. Look for details on: Inclusions: What treatments, surgeries, and hospital expenses are covered? Exclusions: What isn’t covered by the policy? Pay close attention to these to avoid surprises later. Waiting Period: How long do you have to wait after purchasing the policy before you can claim for certain treatments? Sub-limits: Are there any caps on coverage for specific treatments or procedures? Co-pay and Deductibles: Understand how much you’ll have to pay out of pocket. A lower premium might mean higher co-pay, so find the right balance. Compare Premiums and Policy Features: Don’t just settle for the first policy you see. Compare premiums and features from different insurers. We have done policy comparison feature by feature for your benefit , reach out to us for the same ( Book your free Consultation). Remember, the cheapest policy isn’t always the best. Balance affordability with adequate coverage. Opt for a plan with lifetime renewability: This will ensure continuous coverage even as you age and your healthcare needs increase. Many policies might not provide you cover beyond a certain age , which means when you require them at later stage of your life they might not provide you the cover needed. Check the network hospitals: Choose a plan with a wide network of hospitals in your area. This will ensure cashless hospitalization and reduce out-of-pocket expenses. A wider network means more choices and potentially cashless hospitalization, which can be a huge relief during a medical emergency. Prioritize insurers with hospitals convenient to your location. A cashless facility helps and saves a lot of time and effort , so choose a policy which has maximum network list of hospitals. Read the Policy Wordings Carefully and seek Expert Advice : Before signing on the dotted line, thoroughly read the policy wordings. This document contains all the details about the policy, including terms and conditions, coverage, exclusions, and claim procedures. Don’t hesitate to ask questions if you have any doubts. If you’re feeling overwhelmed, consider consulting a financial advisor or insurance agent. They can help you understand the different policy options and recommend a plan that aligns with your specific needs and budget. They can also clarify any complex terms and conditions. We have completely done that exercise for you . You can reach us to understand the policy terms and conditions ( Book your free consultation Today). Conclusion : Choosing health insurance is a big decision. Take your time, do your research, and don’t hesitate to ask questions. You can reach us with your queries and book free consultations. The right plan can give you invaluable peace of mind.
As a health insurance advisor, I witness firsthand the anxieties families face regarding their senior citizens’ healthcare needs. The rising cost of medical care can be a significant burden, and the prospect of a sudden health crisis can be overwhelming. The launch of Ayushman Bharat, particularly the Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), has been a welcome development. It provides a much-needed safety net for families by offering free health insurance coverage. However, in my experience, it’s crucial to view Ayushman Bharat as a stepping stone rather than the final solution, especially for senior citizens. Before discussing it further let us first understand who can apply and how Who Can Apply ? Anyone aged 70 or above with a valid Aadhaar number would be eligible for applying under the scheme and that initially there would be a pilot launch to sort out any issues that might arise How to Apply ? 1.Visit the official website of Ayushman Bharat ( https://pmjay.gov.in/) 2.Get your Aadhaar or ration card verified at a PMJAY kiosk 3.Provide family identification proofs 4.Get your e-card printed with a unique AB-PMJAY ID. 𝗘𝗻𝗿𝗼𝗹𝗹𝗺𝗲𝗻𝘁 𝗮𝗻𝗱 𝗖𝗼𝘃𝗲𝗿𝗮𝗴𝗲 The scheme is expected to be extended to all senior citizens above 70 years old. A pilot program is likely to start this week in select locations before a nationwide rollout. (The scheme offers free health insurance coverage of up to Rs 5 lakh per family. Senior citizens can choose to continue with their existing public health insurance schemes or opt for Ayushman Bharat- Pradhan Mantri Jan Arogya Yojana (AB-PMJAY). Understanding Ayushman Bharat’s Benefits and Limitations Let’s break down Ayushman Bharat: Strengths: This scheme offers cashless hospitalization services and covers a wide range of medical procedures, reducing out-of-pocket expenses. It also ensures access to quality healthcare at empanelled hospitals. Weakness : The coverage amount of Rs. 5 lakh per year may not be sufficient for senior citizens with chronic conditions requiring long-term care or expensive treatments. Additionally, the availability of quality healthcare facilities within the network, especially in remote areas, can be a concern. Why Senior Citizens Might Still Need Separate Health Insurance Here’s where separate health insurance for senior citizens comes into play: Enhanced Coverage: Separate plans can provide additional financial protection beyond the Rs. 5 lakh limit offered by Ayushman Bharat. This ensures comprehensive coverage for potentially expensive procedures. Specificity: Senior-specific health insurance plans are often designed to address the unique needs of older adults, including pre-existing conditions and age-related illnesses. Wider Network Options: These plans may offer access to a wider network of hospitals, including private institutions, which might provide specialized care or better amenities. Addressing Existing Concerns While Ayushman Bharat addresses a critical need, there are existing concerns that need to be acknowledged, as pointed out in Deccan Herald. Improving the quality of care within the network and ensuring smoother claim settlements are crucial for the scheme’s long-term success. The Bottom Line: A Tailored Approach Ayushman Bharat is a positive step towards a healthcare-secure future for senior citizens in India. However, for comprehensive protection, especially considering potential limitations and individual needs, exploring separate health insurance is highly recommended. As your health insurance advisor, I encourage you to schedule a consultation to discuss your specific situation and explore the best options for your senior loved ones. Together, we can create a healthcare plan that provides peace of mind and ensures they receive the care they deserve. Click here to book a free consultation
Understanding Waiting Periods Waiting periods in health insurance can be a complex topic, but understanding them is crucial to make informed decisions about your coverage. In essence, waiting periods are specific timeframes during which certain types of claims, such as those related to pre-existing diseases or specified illnesses, are not covered. Pre-Existing Diseases (PEDs) Defined by IRDA , Pre-Existing Disease means any condition, ailment or injury or related condition(s) for which there were signs or symptoms, and I or were diagnosed, and I or for which medical advice I treatment was received within 48 months prior to the first policy issued by the insurer and renewed continuously thereafter. Simple words , A pre-existing disease is any condition diagnosed or treated within 48 months before purchasing your health insurance policy. Examples include: High blood pressure Diabetes Asthma Thyroid conditions Chronic obstructive pulmonary disease (COPD) Kidney disease Impact of PEDs on Health Insurance Higher Premiums: Insurers may charge higher premiums to cover the increased risk associated with pre-existing conditions. Waiting Periods: Many policies impose waiting periods for claims related to PEDs. This means you’ll need to wait a specific period before coverage kicks in. Policy Denial: In severe cases, the insurer might deny coverage altogether. Permanent Exclusion: The insurer may permanently exclude coverage for the pre-existing disease and related conditions. Should You Hide Pre-Existing Conditions? Absolutely not! Disclosing pre-existing conditions is crucial. Hiding them can lead to claim denials later, causing significant financial hardship during a medical emergency. Specified Diseases Specified diseases are a list of pre-defined illnesses covered under a specific policy. These often include: Cancer Heart diseases Kidney diseases Liver diseases Paralysis Major organ transplants Multiple sclerosis Alzheimer’s disease Parkinson’s disease Maternity Newborn cover Impact of Specified Diseases Waiting Periods: Similar to PEDs, health policies may have waiting periods for specified diseases. Strategies for Managing Waiting Periods Start Early: Purchase health insurance when you’re young and healthy to benefit from lower premiums and shorter waiting periods. Low Waiting Period Plans: Look for policies with shorter waiting periods for PEDs and specified diseases. Plan Comparison: Carefully read the policy wording to understand how it handles waiting periods. Reduced Waiting Period: Some policies allow you to decrease the waiting period by paying an additional premium. Policy Continuation: Avoid discontinuing your existing health insurance plan to avoid starting fresh with waiting periods. Portability: If switching insurers, utilize the portability feature to transfer your existing policy. By understanding waiting periods and implementing these strategies, you can make informed decisions about your health insurance coverage and protect yourself from unexpected financial burdens. Get Expert Advice Have questions about navigating waiting periods in your specific situation? Feel free to reach out for a consultation. Book Your Free consultation
What does Term insurance not mean or what it is not ? Cash Value: Unlike whole life or universal life insurance, term insurance doesn’t build cash value over time. This means you can’t borrow against the policy or receive a cash payout if you surrender it before the end of the term. Maturity Benefit: If you outlive the term of your insurance policy, you won’t receive a lump sum payment at the end. Term insurance is designed to provide coverage for a specific period, and there’s no payout if you don’t need it. Investment Returns: Term insurance isn’t an investment vehicle. While it provides protection, it doesn’t offer any potential for growth or returns. Guaranteed Premiums: While some term insurance policies offer level premiums, others may increase over time. This means your premiums could go up as you get older, even if you maintain good health. Real Life Scenario : What happens in real life scenario is people are mis selling or they themselves think since the money they have paid is not being return its not a good financial planning instrument. So two most common plans are sold in the market. Endowment plans Are a type of life insurance policy that combines life insurance coverage with an investment component. This means that in addition to providing a death benefit to your beneficiaries if you die during the policy term, endowment plans also offer a maturity benefit if you outlive the policy term and provides guaranteed returns ULIP ( Unit-Linked Insurance plans) is a type of life insurance plan that combines life insurance coverage with an investment component. They provide an opportunity to participate in the market or bonds. Unlike traditional endowment plans, ULIPs offer more flexibility and potential for higher returns. But the question is why mis-selling happens? Higher Commission: Your agent/ Bank gets a higher payout for selling. Guaranteed returns : It’s easier for agents to sell something with a guaranteed word , so they don’t have to spend a lot of time explaining Pressure : Banks sell these plans through their employees , they have a lot of pressure to sell. Is it that bad at all lets see this from the case of Endowment plans from real life scenarios Case Study : Customer who was looking to buy insurance cover was approached by bank to with the following two proposition instead of term plan The customer was pitched by his regular bankers to invest in this plan Called HDFC Sanchay plus ( this is not just limited to HDFC, it is all ICICI, LIC, Max etc. whatever policy you buy it would be the same.) His banker was really persistent on him to buy this plan that he used to call him daily , putting all tactics for him to purchase . After so many pressure calls he had almost given in when i got in discussion with him and showed him the reality. So let’s study the plan. HDFC Sanchay Plus Current age : 30 Years Policy term : 20 Years Premium payment term : 10 years Premium amount 1st year : Rs 5,22,500/- Premium 2 nd year onwards : Rs 5,11,250/- SI :Rs 64,37,500/- to Rs 1,27,58,919/- Policy Year Single/ Annualized Premium Guaranteed Non Guaranteed Survival Benefits / Loyalty Additions Other benefits (if any) Maturity Benefit Death Benefit Min Guaranteed Surrender Value Special Surrender Value 1 522500 0 0 0 64,37,500 0 0 2 511250 0 0 0 64,37,500 3,09,000 3,09,000 3 511250 0 0 0 64,37,500 5,40,750 5,40,750 4 511250 0 0 0 64,37,500 10,30,000 10,30,000 5 511250 0 0 0 64,37,500 12,87,500 6,83,148 6 511250 0 0 0 64,37,500 15,45,000 8,95,482 7 511250 0 0 0 64,37,500 18,02,500 11,41,343 8 511250 0 0 0 69,23,763 32,35,879 15,59,667 9 511250 0 0 0 74,10,026 37,68,008 20,82,332 10 511250 0 0 0 78,96,289 50,72,637 27,28,108 11 0 0 0 0 83,82,552 57,33,516 31,99,868 12 0 0 0 0 88,68,815 58,79,395 37,36,072 13 0 0 0 0 93,55,078 60,25,273 43,42,778 14 0 0 0 0 98,41,341 61,71,152 50,30,514 15 0 0 0 0 1,03,27,604 63,17,031 58,08,267 16 0 0 0 0 1,08,13,867 64,62,910 66,87,510 17 0 0 0 0 1,13,00,130 66,08,789 76,78,686 18 0 0 0 0 1,17,86,393 67,54,668 87,95,972 19 0 0 0 0 1,22,72,656 69,00,547 1,00,54,714 20 -11729523 0 0 11729523 1,27,58,919 70,46,426 1,14,71,419 Returns 5.78% The policy seemed so attractive that he would make Rs 1,17,29,523/- in 20 Years. but he forgot he had invested almost Rs 50,00,000/ and got just double the invested. A simple IRR calculation shows he would earn 5.78% IRR on this investment. Lower than your FD returns. We could argue that it was meant for protection but let’s see how much would he have paid if we just took SI of Rs 1,30,00,000/- from day one for 20 years , which in this case is applicable in 20 years. The same company offers us Term insurance plan for SI – Rs 1,30,00,000/- Payment Term : 10 Years Policy term 20 : 20 years. Premium : Rs 23,464/- And now the funny part if we take this Policy Year Single/ Annualized Premium Guaranteed Non Guaranteed Survival Benefits / Loyalty Additions Other benefits (if any) Maturity Benefit Death Benefit Min Guaranteed Surrender Value Special Surrender Value 1 499036 0 0 0 64,37,500 0 0 2 487786 0 0 0 64,37,500 3,09,000 3,09,000 3 487786 0 0 0 64,37,500 5,40,750 5,40,750 4 487786 0 0 0 64,37,500 10,30,000 10,30,000 5 487786 0 0 0 64,37,500 12,87,500 6,83,148 6 487786 0 0 0 64,37,500 15,45,000 8,95,482 7 487786 0 0 0 64,37,500 18,02,500 11,41,343 8 487786 0 0 0 69,23,763 32,35,879 15,59,667 9 487786 0 0 0 74,10,026 37,68,008 20,82,332 10 487786 0 0 0 78,96,289 50,72,637 27,28,108 11 0 0 0 0 83,82,552 57,33,516 31,99,868 12 0 0 0 0 88,68,815 58,79,395 37,36,072 13 0 0 0 0 93,55,078 60,25,273 43,42,778 14 0 0 0 0 98,41,341 61,71,152 50,30,514 15 0 0 0 0 1,03,27,604 63,17,031 58,08,267 16 0
Understand the Concept in simplest way A term insurance/ Life Insurance is a type of insurance which provides for financial cover during a set period chosen by the life insured. Why do we need term insurance ? Term insurance is a crucial financial tool that offers a safety net for you and your loved ones. Here are some key reasons why you might need it: Protection for Dependents: If you have dependents, such as children or a spouse, term insurance can provide financial support in the event of your untimely death. The death benefit can help cover expenses like mortgage payments, education costs, and living expenses. Debt Coverage: If you have significant debt, such as a mortgage or student loans, term insurance can help your family repay those debts. This can prevent financial strain and ensure a more comfortable future. Financial Planning: Term insurance can be a valuable component of your overall financial plan. It can help you protect your assets and ensure that your loved ones are financially secure, regardless of unforeseen circumstances. Affordability: Term insurance is generally more affordable than other types of life insurance, making it a good option for those on a budget. Flexibility: Term insurance offers flexibility in terms of coverage and duration. You can choose a policy that meets your specific needs and adjust it as your circumstances change. What does Term insurance not mean or what it is not ? Cash Value: Unlike whole life or universal life insurance, term insurance doesn’t build cash value over time. This means you can’t borrow against the policy or receive a cash payout if you surrender it before the end of the term. Maturity Benefit: If you outlive the term of your insurance policy, you won’t receive a lump sum payment at the end. Term insurance is designed to provide coverage for a specific period, and there’s no payout if you don’t need it. Investment Returns: Term insurance isn’t an investment vehicle. While it provides protection, it doesn’t offer any potential for growth or returns. Guaranteed Premiums: While some term insurance policies offer level premiums, others may increase over time. This means your premiums could go up as you get older, even if you maintain good health. How to Know Your Sum Insured ? By annual income method: Determine your annual income: This includes your salary, bonuses, and any other sources of income. Choose a multiplier: The multiplier is a number that determines the amount of coverage you need. Common multipliers range from 5 to 10 times your annual income. A higher multiplier provides more coverage, but also increases the premium. Calculate the sum insured: Multiply your annual income by the chosen multiplier. Human Life Value (HLV) method is another popular approach to calculating the sum insured in term insurance. This method focuses on the financial value that an individual brings to their family through their income. How HLV works: Estimate your remaining working years: Determine the number of years you expect to work before retirement. Calculate your average annual income: Estimate your average annual income over your remaining working years, considering potential salary increases and promotions. Factor in inflation: Adjust your average annual income for inflation to account for the rising cost of living over time. Determine the discount rate: This is the rate at which future income is discounted to its present value. It’s typically based on the rate of return you could achieve on your investments. Calculate the present value of your future income: Multiply your adjusted average annual income by the present value factor, which is calculated using the discount rate and the number of remaining working years. Conclusion : To consult for the best plans and understand the requirement of Term plan needs you can reach us : https://wa.me/message/LC5W5ZNTPSJ5L1)
This I say from personal experience that navigating the complex world of health insurance can be overwhelming. So many questions to be answered – How much coverage is needed? What is covered? What are the extra features? Is the feature required? What is hidden?? The major issue – So many different features in so many different policies and therefore So Much Confusion. And if you make the mistake of providing your details to those who just want to sell, you are doomed !!!! the incessant phone calls and messages without even understanding what you are looking for. That’s where a consultative approach comes in. Unlike traditional insurance sales, a Consultative Approach focuses on understanding your unique financial situation, health needs, and long-term goals. Let us take a minute to understand the key components of a Consultative Approach: Personalized Recommendations: Comprehensive evaluation & Risk identification: A detailed analysis of your current and prior medical history, family size, lifestyle, and financial situation. Coverage requirements: Determining the level of coverage needed for hospitalizations, surgeries, medical treatments, and other expenses. Tailored options: Presenting a range of health insurance plans that align with your specific needs and budget. Trust and relationship building: Establishing a strong relationship based on trust and open communication. Expert Guidance: Insurance knowledge: Providing in-depth information about policy terms, coverage details, deductibles, co-pays, and maximum limits. Comparison analysis: Helping you compare different plans to identify the best value for your money according to industry trends. Ongoing support: Claim assistance: Explaining the claims process and offering support during the claim filing process. Policy review: Regularly reviewing your insurance coverage to ensure it continues to meet your changing needs. By taking a consultative approach, you can make informed decisions about your health insurance coverage and together we can identify the right health insurance plan that truly protects you and your family. Would you like to discuss your specific needs and explore health insurance options? Ready to take control of your health insurance? Let’s chat! #healthinsurance #financialplanning #consultativeapproach #insuranceadvisor #wellness #financialfreedom
Ben Graham the inventor of the phrase “margin of safety” defined investment as “ An investment operation is one which, upon thorough analysis, promises safety of principle and satisfactory returns. Operations Not meet these requirements are speculative” Investing can be an exciting journey that allows you to grow your wealth and achieve your financial goals. But before you dive in, it’s essential to equip yourself with a solid understanding of core investment principles. These fundamental concepts provide a roadmap for navigating the financial markets, making informed decisions, and building a successful investment portfolio. Whether you’re a seasoned investor or just starting out, a grasp of these core principles empowers you to take control of your financial future and make smart choices with your hard-earned money The fundamentals are very easy to grasp and may work as a guiding principle for anybody investing. They do not change for your Mutual fund investing too. Assigning goals: Every investment you make should be tied to a specific financial goal. This goal could be as simple as growing your money by a certain percentage over time, or it could be something more substantial like buying a house, funding your children’s education, or securing a comfortable retirement. Risk : Understanding your risk tolerance is crucial before investing. Mismatching your risk profile with an investment’s risk level can lead to a negative experience. Imagine a conservative investor placed in a small-cap fund, like the Nippon Small Cap Fund, which experienced a significant downturn of -36.19%. This could cause them considerable anxiety and potentially derail their investment plans. Conversely, an aggressive investor stuck in an equity-saving fund during a strong market might feel frustrated watching others earn higher returns . Horizon : Time horizon in investing refers to the amount of time you plan to hold onto an investment before you need to access the money. It’s a crucial factor in determining your investment strategy and risk tolerance Common Time Horizons: Short-Term (0-3 years): Focuses on preserving capital with minimal risk. Examples include savings accounts, money market funds, and short-term bonds. Medium-Term (3-10 years): Aims for a balance between growth and stability. Examples include balanced funds, index funds, and some corporate bonds. Long-Term (10+ years): Prioritizes long-term growth with the ability to handle volatility. Examples include growth stock funds, small-cap funds, and real estate investments. Current asset allocation: Having your asset allocation analyzed is a critical step in successful investing. This process helps you understand the current makeup of your portfolio and how different assets within it have historically behaved. By analyzing your asset allocation, you can identify any areas where you might be overweight or underweight in certain asset classes. This knowledge empowers you to make informed decisions and potentially adjust your portfolio to better align with your risk tolerance and financial goals( i have written about the concept in my blog https://wealthinn.in/asset-allocation-guideline-for-investment/ Diversification : Diversification in investing is a fundamental strategy that involves spreading your investments across various asset classes, industries, and even geographical locations. The core principle is to avoid putting all your eggs in one basket. By diversifying, you aim to reduce the overall risk of your portfolio without sacrificing potential returns. Asset allocation tends to take care of your diversification needs Emergency planning : Building an emergency fund is a crucial principle of sound financial planning. It’s a safety net that can cover unexpected expenses, such as job loss, medical bills, or car repairs. Aim to save 6-12 months of your living expenses in this fund. This amount can be adjusted based on your circumstances. For example, if you have a steady job and good health insurance, you might target 6 months. Conversely, if you’re self-employed or have high healthcare costs, consider saving closer to 12 months. You can store your emergency fund in a highly liquid account like a Fixed deposit account or a money market fund. Remember to regularly review and adjust your emergency fund as your income and expenses change. Insurance planning : Insurance planning is the process of strategically choosing insurance policies to financially protect yourself, your loved ones, and your assets in case of unforeseen events. It’s about identifying potential risks and finding insurance plans that can mitigate the financial burden they might cause. You should at least run one term plan and one health insurance policy apart from your corporate policy if you are salaried . These profiles prepare you and arm you with necessary steps to investment, i always say that products are last to be selected. Once the profile is clear things are done we can move to look into the products and select the products as per the guidelines given below Past performance : Past performance is a tricky concept in investing. While it can provide some insights, it’s not a guaranteed predictor of future results. But we do need to check how the funds are performing as compared to other funds in the category. Rolling returns : Rolling returns are a valuable tool for investors looking to understand the historical performance of an investment over various holding periods. Unlike traditional point-to-point returns, which show the change in price from one specific date to another, rolling returns provide a more nuanced picture. Benefits of Rolling Returns: Provides a Smoother Picture: Rolling returns smooth out short-term fluctuations, offering a better understanding of how an investment performs over different holding periods. Helps Analyze Risk: By analyzing rolling returns across various holding periods, you can gain insights into the investment’s potential volatility and risk profile. Informs Investment Decisions: Understanding how an investment has performed for different holding periods can help you make informed decisions about your own investment horizon and risk tolerance. Ratios : Mutual fund ratios are like little keyholes that give you a glimpse into the inner workings of a fund. They offer valuable insights into a fund’s performance, cost structure, and risk profile. Here are some key ratios to understand: Expense Ratio: This is the annual fee a fund charges investors to cover
- 1
- 2