- Other Services
- Life Insurance
- Health Insurance
- General Insurance
- Mutual Fund
- Corporate Fixed Deposits
- Bonds
Life Insurance
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The indian life insurance sector has grown to be the world’s 11th largest in just 10 years. a younger workforce, a rise in personal incomes, market competition and regulatory initiatives make this a market to watch. Life Insurance is the key to good financial planning.
On one hand, it safeguards your money and on the other, ensures its growth, thus providing you with complete financial well being.Life Insurance can be termed as an agreement between the policy owner and the insurer, where the insurer for a consideration agrees to pay a sum of money upon the occurrence of the insured individual’s or individuals’ death or other event, such as terminal illness, critical illness or maturity of the policy.
Advantages of Life Insurance
Risk CoverLife today is full of uncertainties; in this scenario Life Insurance ensures that your loved ones continue to enjoy a good quality of life against any unforeseen event.
Planning for life stage needsLife Insurance not only provides for financial support in the event of untimely death but also acts as a long term investment. You can meet your goals, be it your children’s education, their marriage, building your dream home or planning a relaxed retired life, according to your life stage and risk appetite. Traditional life insurance policies i.e. traditional endowment plans, offer in-built guarantees and defined maturity benefits through variety of product options such as Money Back, Guaranteed Cash Values, Guaranteed Maturity Values.
Protection against rising health expensesLife Insurers through riders or stand alone health insurance plans offer the benefits of protection against critical diseases and hospitalization expenses. This benefit has assumed critical importance given the increasing incidence of lifestyle diseases and escalating medical costs.
Builds the habit of thriftLife Insurance is a long-term contract where as policyholder, you have to pay a fixed amount at a defined periodicity. This builds the habit of long-term savings. Regular savings over a long period ensures that a decent corpus is built to meet financial needs at various life stages.
Health Insurance
Medical care has become an expensive affair today. Instant catering to huge hospital bills may not be probable for all. With big diseases like cancer, cardiac problems, severe joint problems, etc. becoming common, it has become difficult for the common masses to bear the expenses at ease.
As per a survey, less than 10% of the population of India has the ability to pay Rs. 5 lakh or less in case of a surgical emergency. Mediclaim is the best answer in such a situation. With a mediclaim, an individual or a family can lead a stress-free and worry-free life and any inconveniences related to health will be taken care of by the insurer.
Many people are still most comfortable purchasing from an agent. Are you one of them? Then have a look at this guide:- Always choose a reputed health or medical insurance provider in order to reduce the probability of facing problems in service or claims.
- Listen to your agent carefully to know about the product’s specifications. In particular, understand the exclusions and co-deductibles.
- Another question to ask your agent: Is the claims procedure simple? What are the claims statistics of the provider?
- Don’t hesitate to ask your agent any question regarding your policy or provider…it is important to be completely clear on it from the start.
- Final point to keep in mind once you buy your health insurance plan: be sure to collect the receipt of the payment made – it is your right!
General Insurance
The Indian insurance sector is rapidly moving towards international standards of free (risk-based) market pricing and new/innovative product offerings. Big changes have occurred over the last seven years, during which the sector was opened to private participation, but with foreign direct investment (FDI) capped at 26%.
Motor InsuranceYou need motor insurance when you buy a motor vehicle. Motor insurance covers your vehicle, be it a motorcycle, a car or a lorry, in case of accidents or theft. There are three common types of motor insurance available: third party; third party, fire and theft; and comprehensive cover. The level of your coverage dictates what you can claim if your vehicle sustains loss or damages.
Personal Accidental PolicyPersonal Accident insurance or PA insurance is an annual policy which provides compensation in the event of injuries, disability or death caused solely by violent, accidental, external and visible events. It is different from life insurance and medical & health insurance. You can either take a PA policy for yourself or a group policy for your family, protecting you and them anywhere in the world, anytime of the day. PA insurance provides 24-hour worldwide insurance protection.
Home Insurance
Home Insurance, or Houseowner / Householder Insurance as it is also known, is one of the most important insurance policies you can buy in your adult life. Your home is one of the largest financial investment you’ve made, and that’s why it’s so important to protect it.
There are three main types of policies which you can buy to protect your home: Basic FireThis Policy provides you with coverage against loss or damage to insured property (i.e. house, shop and factory) caused by fire, lightning or explosion.
House Owners PolicyThis policy provides additional coverage compared to the basic fire policy. It may include loss or damage due to flood, burst pipes, etc.
House Holders PolicyThis is a policy which covers your household contents and includes coverage for fatal injury to you as the insured. This policy does not cover damage to the house itself.
Mutual Fund
Enjoy life, SIP by SIP not GULP by GULP
Mutual funds are a type of certified managed combined investment schemes that gathers money from many investors to buy securities. There is no such accurate definition of mutual funds, however the term is most commonly used for collective investment schemes that are regulated and available to the general public and open-ended in nature. Hedge funds are not considered as any type of mutual funds.
Mutual funds are identified by their principal investments. They are the 4th largest category of funds that are also known as money market funds, bond or fixed income funds, stock or equity funds and hybrid funds. Funds are also categorized as index based or actively managed.
In a mutual fund, investors pay the funds expenditure. There is some element of doubt in these expenses. A single mutual fund may give investors a choice of various combinations of these expenses by offering various different types of share combinations.
The fund manager is also known as the fund sponsor or fund management company. The buying and selling of the funds investments in accordance with the funds investment is the objective. A fund manager has to be a registered investment advisor. The same fund manager manages the funds and has the same brand name which is also known as a fund family or fund complex.
As long as mutual comply with requirements that are established in the internal revenue code, they will not be taxed on their income. Clearly, they must expand their investments, limit the ownership of voting securities, disperse most of their income to their investors annually and earn most of their income by investing in securities and currencies.
Mutual funds can pass taxable income to their investors every year. The type of income that they earn remains unchanged as it gets transferred to the shareholders. For e.g., mutual fund distributors of dividend income are described as dividend income by the investor. There is an exception: net losses that are incurred by a mutual fund are not distributed or passed through fund investors.
Corporate Fixed Deposits
The Corporate Fixed Deposits, as the name suggests are like any other Fixed deposits issued by the banks. It has also got some characteristics of fixed deposits with some restrictions. The Corporate Fixed Deposits are issued by the Public and Private Limited companies. It is governed by Section 73 of the Companies Act. It is also called Company Deposits. Bank Deposits are governed by the Banking Regulation Act.
Why Companies Take Deposits
The companies require funds for their business activities. Normally they take loans from banks. The interest rate on these loans is comparatively higher. To reduce interest cost, companies invite deposits from the general public. The interest on these deposits is generally 3-5% less than the interest on the loans taken from banks. This helps them in reducing the cost of production. Thereby keeping the cost of their products competitive in the market.
WHO CAN ISSUE CORPORATE FIXED DEPOSITS
Financial companies and Non-Banking Financial Companies (NBFC) are allowed to take deposits from the public. But for Public and Private Limited companies the issuing of Corporate fixed Deposits is subject to the provisions of Section 73 to 76 of the Companies Act,2013.
A Public Company likely to take deposits from the public must have Net worth of Rs 100 Crs or Turnover of not less than Rs 500 Crs. The Company has to obtain shareholders’ consent through Special Resolution and the same has to be filed with the Registrar of Companies before accepting the deposits from Public.
Bonds
Bonds are the instruments to raise the funds by the Government and Corporate entities from the public. It is considered as a loan from the subscribers. It carries a fixed rate of interest and called Fixed income instruments. It carries a maturity period of 7-10 years. But infrastructure bonds are issued for longer periods up to 30 years. Bonds are considered less risky than Equities or Shares as a return in the form of interest is assured. Whereas in the case of Equities return is in the form of dividends. Companies declare dividends out of the profits earned.
WHO CAN ISSUE THE BONDS?
Bonds are issued by the following entities:
CorporateCorporate issues the bonds to raise the funds to conduct their business activities. They may need funds for long term basis for their Capital expenditures or short term basis for working capital requirements. Bonds issued by corporate also called Debentures.
Corporate issues the following type of bonds:
Convertible DebenturesThese type of bonds are converted into shares as per the pre-decided terms and conditions of the debentures. It could be fully convertible or partly convertible debentures. In the case of fully convertible bonds, no amount is payable on maturity. In the case of Partially convertible bonds, the amount about the nonconvertible part is repaid on maturity. Corporate bonds carry a certain amount of risk as the repayment of bonds depends upon the profit earned by the company. Therefore companies offer more interest on their bonds.
Non-convertible DebentureNonconvertible debentures remain as a debt instrument and carries the fixed rate of interest. Redemption amount is repaid on maturity.
Government
The government also issues the bonds to fund their various developmental activities mostly for infrastructure projects. Government bonds are also known as G-Sec or Government Securities. These bonds are considered a safe investment as repayment is guaranteed by the government. These bonds carry little less interest compared to Corporate bonds. The duration of the bonds is also longer for up to 30 years. The interest rate offered on Government bonds is also called Coupan rate.
Type of Bonds:The following type of bonds are in vogue:
Government BondsThese bonds are issued by Central and State Governments to fund their development activities.
Local Authorities BondsThese bonds are issued by the local authorities like Municipal Corporations.
Public Sector BondsThese bonds are issued by Public Sector Enterprises of Central and State Governments.
Tax-Free BondsThese bonds are issued by the Central Governments. Interest paid on these bonds is tax-free.
Sovereign Gold Bonds(SGB)
These types of bonds are issued by the Central Government. The underlying security in these bonds is Gold.The price of the bond is fixed based on the prevailing price of the gold. The value of a bond is mentioned in no. of grams of gold.
On maturity, investors can opt to get either the physical gold in grams or equivalent amount of value in rupees. The interest payable in these bonds is @2.50% pa. Interest can be taken half-yearly or can be taken at the time of maturity. The interest paid on these bonds is tax-free.