Learn before it’s Late

When we see something unfamiliar we tend to stay away from it.

There was a time when computers were unfamiliar.

There was a time when One Day cricket was unfamiliar, later T-20 cricket was unfamiliar and Pro-Kabaddi was unfamiliar.

That which was unfamiliar, today has become mainstream.

The person who would have chosen to stay away from the unfamiliar, would have become extinct.

Likewise, for many people today mutual funds, SIP, Equity are all unfamiar whereas FD, Gold and real estate are all familiar.

So these people tend to gravitate towards the familiar and keep at bay the unfamiliar.

Can you even imagine how one would survive in today’s world without basic computer knowledge.

This will be the case with those who stay away from equity investing.

The only difference being, one can learn computers at any age but in Investing, if time passes by so does the opportunity.

If one does not understand this unfamiliar asset class, then talk to a Financial Advisor to get yourself educated.

Kaustubh Deole

My Investing Insights Series – 1

If a healthy seed of a giant tree is planted in a flower-pot, the tree that will grow to be a miniature version of the giant tree. This miniature version is known as Bonsai.

It is not because of any fault in the seed, because there is no fault in the seed. It is only because the seed has been denied the real base to grow on.

In personal finance when you give your investments just a few years of “time” your base is like a small pot and the investment will mushroom into a bonsai.

But by providing the “investment” 10 to 15 years of “time”, you change the base from a pot to a field.

Now the investment gets the right kind of base to compound and create enormous wealth.

Protection is Better than Cure

Way to Simplify Life Series – 2

Majority of salaried employees ignore the individual health insurance and depend on mediclaim/health insurance provided by their employer (office health policy). Observations in many cases; the cover provided by the employer are insufficient to counter the growing hospitalization expenses.

Which are the reasons one shouldn’t depend on health cover from the employer, and have a individual health insurance or a top-up on hospitalisation product?

  • The prime purpose of group health insurance is to protect the employer from any mishappenings related to a employee’s health.
  • The employer gives cover for 1-5 Lakhs. It is insufficient as for major illness like heart bypass, Cancer package starts from 3.5 Lakhs.
  • Employer – employee is a group cover product where coverage is constant & not increasing. You can increase the coverage by paying additional premium.
  • There are certain limitations on specific diseases or surgeries.
  • It is normally seen, employees cover their complete family in this product.
  • In health insurance, there are age slabs which also convey the risk. Covering complete family with different age slabs increases the risk of not getting covered completely.
  • Assume, Mr. Rohan has opted for this cover for self, spouse, his child & parents of coverage 5 lakhs. The internal allocation of coverage will be Mr. Rohan- 2.50 lakhs, spouse- 1 lakhs, child- 75k, & parents- 75k.
  • These products are not inflation proof. It barely covers the employee with no additional benefits.

No Claim Bonus is not available in any group cover. It is provided in personal health cover to suffice the additional costs in coming years if you are not claiming in respective year.

Your employer won’t cover you after your retirement.

If you are thinking; I will buy health insurance just before retirement, think again? Because something happens during this period there is a possibility you don’t get health insurance as your application might get rejected due to medical history or you will be charged loading (extra premium) to cover the risk.

The government has increased 80D limit, Government wants its citizens to have enough health insurance as it protects individual from financial liability.

Recently, Government is giving health insurance cover of 5 Lakhs for 50 crores people who are Below Poverty Line. If Government is taking care of their citizens, why you are shying away for taking care of your own family?

Also, it costs average Rs 10000 – 15000 which is very small amount as compared to any medical bills of Rs 2-3 Lakhs.

So it’s always advisable to have a individual health insurance to cover self & family.

Protection is the Best Cure

Ways to Simplify Life – Series 1

I will address the various types of protection requirements in this series.

A Pure Term Insurance or Pure Vanilla Insurance is the basic step of Financial Planning. It will take care all the financial need & requirements of a family in the absence of a breadwinner or earner of the family.

Vanilla is termed as basic; which also means without any additional feature or optional riders.

Term plan is a life insurance risk mitigation policy that provides coverage for a certain period of time  & will ensure the financial protection for the family. A term life insurance policy is a pure life cover. This is the cheapest form of life insurance cover.
A person can take 10 or 15 times cover of his annual income.

I always advise my clients to increase the coverage on every block of 3 to 5 years to be inline with income increase.

This can be taken by any individual who is working and having financial documents like salary slips, businessmen filing Income Tax returns for 3 years or more.

Note of prime importance:

If you have already taken a term cover, any change in your personal habits, lifestyle changes, contracting of new diseases, surgery etc has to be intimated to your insurance company in writing along with medical reports for better claim settlement process.

How a Term plan works

Dr. Ganesh, age 30, a Doctor, has 2 dependants – his parents and his wife. Ganesh’s annual income is 10 lakhs is good enough to support his family, but he is concerned. Since he is the sole breadwinner, his dependants could be under tremendous financial stress in the event of his sudden & unfortunate death. Therefore, to mitigate the risk, Ganesh is considering buying a Term Plan.

He can get a term cover of RS 1 Crore for a policy tenure of 30 years (working age) for an annual premium of around Rs 8,500 – 9,500. The cheapest available option to claim a large cover.

In fact, by paying just 1 percent of his annual income, Dr. Ganesh will be getting a life cover of Rs. 1 Crore.

So in the event of  Dr. Ganesh’s sudden & unfortunate death, An Insurance company will give a cheque of 1 Crore to the nominee (dependable parents or wife or both). So this money can be used to take care of financial needs of the family as a sole earner of the family is no more.

Benefits of Term Plan

  • Low premium: The premium for a term plan is relatively lower than all other insurance plans because there is no investment element in the amount insured.
  • Protects family against the financial loss of income: A sudden death of a sole earner of the family is a huge stress on the family as the income is stopped but the daily requirements need to be met.

So take the first step in order to ensure the financial protection of your family by taking a Vanilla Term Plan. 

New Office

With blessings & support of all elders & clients, we are starting our first day today in our new office in Andheri.

A dream has come true.

Feel free to walk-in any time between 9 am to 9 pm.

We are also looking forward for knowledge sharing through Investment Awareness Workshops or Programs in our premises or at your location.

Continue to support us & Shower your blessings.

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