Plan Your Investment
Plan Your Investment

Introduction

Are you looking to apply for studying in abroad or one of your relatives would like to continue their education in abroad?. If that is the case, you must read this article to know about the students insurance policy and why it is very important for the foreign education. Those who are applying for the education in abroad would go through the painful process to prepare the various documents and approval including the students visa. But, only very few would consider the importance of taking the students insurance policy to protect them from the unexpected expenses and the bad health condition while studying in abroad.

This article explores the importance of students insurance policy and why it needed for the students and the process to apply for it. If you are a parent of a student who want to apply for foreign education, please spend you time to learn the students insurance policy. If you have any doubts, please post it in the comments section. Subscribe to our future articles here.

also read:

• Interest Free Education loans
• Health Insurance Policy
• Critical Illness Policy

What is students insurance policy?

This policy combines the medical insurance and the travel insurance for the students traveling abroad for their higher education. This is a compulsory policy for the students to avoid any unexpected expenses while studying in the abroad.  For example, if you are taking the medical help outside India, the cost would be very high compare to India. Not only that, if a student meet any accident or become disabled this insurance would help to recover from the losses. Apart from this, if you lose the passport or package while traveling, this policy would help him.

Another important note is that, medical insurance is must for many universities abroad. Most of the students who travel to abroad would know this fact only  at the time of joining, this forces them to take policy in foreign soil which is very expensive. It would be good idea to search on the college’s website to find out whether the medical insurance is compulsory and what is the minimum coverage required for the eligibility. Otherwise they would reject the policy and forces you to take the another policy.

What is covered?

The following items are covered from the students insurance policy:

• Medical expenses
• Treatment of mental and nervous disorders
• Bail bond
• If you are done a crime which is bailable nature, this policy would help you to pay the bail amount.
• Return journey
• Loss of checked-in baggage

What is not covered?

The following expenses are not covered under this policy:

• Attempted suicide
• Injuries due to dangerous sports
• Expenses arising due to loss of valuables, money or securities.
• Traveling against the advice of the physician.
• If your health is not good for the travel and your doctor has advised not travel, then this policy would not incur any expenses arising out of your travel.

Cost of the students insurance policy

The cost of this policy would vary depend on the region. Normally the premium is expensive for the education in USA and Canada because their expensive health care products. The following are the premium collected by few leading insurance companies:

 Summary

It is important for the students to know this policy and apply for it. When you are studying in abroad, the expenses would be very high and it is difficult for you to manage if your family is not wealthy. This policy doesn’t require any medical test, but few companies don’t accept for the pre-existing disease. Please ask insurer more details about the policy and buy if it suits your requirement. If you have any doubts, please post it in the comments section.

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Introduction

Have you ever heard about the wedding insurance?. The basic principles on insurance is to protect you from any unforeseen events like death, loss or damage of property or vehicles. Anything if it would damage individual mentally or physically would need to be  protected. It is insurers interest to offer the various insurance types, if they feel they can capture a market on such an type, they would come up with new kind of insurance type. In the changing world, it is necessary to adopt the latest hazardous for the human life and protect him.

One of the latest insurance category they are offering is the wedding insurance. One has to prepare and arrange marriage event by spending the lakhs of money, it would have been their life long savings. If there is any unexpected thing stopped the marriage, will they have money to arrange the event again?. The wedding insurance to cover the expenses for a wedding. If you have any doubts, please post it in the comments section. Subscribe to future articles here.

also read:

• Health Insurance Portability from October 1, 2011
• Individual or Family Floater health insurance is best?
• Why you need Critical Illness policy?

What is Wedding Insurance?

It is new type of insurance offered by selected insurers to protect the wedding event for the policy holder. Basically, the intention of the insurance is to protect the money spend on the event if there is unforeseen incident stopped the wedding event. This type of insurance would pay the policy holder the amount spend for arranging the wedding event. It is related to the amount policy holder has taken to insure the marriage.

The insurance policy is effective from 7 days before the marriage event till the completion of the event. In this period, if there is any incident which stopped the marriage (as per the policy words there is certain incidents would be included or excluded for accepting the claim process. for details read the following section).

List of events can be approved

To get the claim approved by the insurer, there is list of events or conditions to be satisfied. Not all the events can be a reason to stopping the marriage, in that case insurer would reject the claim. The following are the some of the events to be approved for the claim process:

• Unexpected death of family member listed in the policy. While buying the policy, policy holder has to mention the family members name in the policy details.
• Fire in the marriage hall that stopped the marriage event.
• If there is any burglary of jewels or valuable things that would result in cancelling of the marriage.
• Earthquake that makes damage in the property and canceled the wedding.

Claim process for Wedding Insurance

This type of insurance works for giving the protection to policy holders from the losses. The policy holder would get the actual loss incurred by him subject to the maximum of policy coverage (sum insured) amount. If he wants to claim the losses, he has to submit all the bills with the FIR copy of the complaint he registered in the police station in case of the burglary. The following is the steps to claim the losses:

• Policy holder would intimate the insurance company about the loss.
• They would send the surveyor to the site to verify and investigate about the event.
• Policy holder has to submit the required bills and other documents to claim the money to the surveyor which he lost on the event.
• Then surveyor would send the survey report to the insurance company.
• If there is no issues on documents and survey report, the claim will be sent to the applicant.

The difficult thing is that keeping the bills and even getting the bills would be not easy in our country. Most of the expenses they spend for the marriage they would not give a bill. Practically, if they buy groceries from a super market run by individual, they would not get a bill. This would not come under the account. The insurance company would thing these and make amendments in the policy wordings to help the policy holders.

Who are offering Wedding Insurance?

Bajaj Allianz General Insurance, the leading private general insurance company is the first company to launch an insurance coverage for weddings cancellation or postponement. The insurance policy covers wedding cancellation /postponement due to fire or any natural disaster, accident of bride/groom, accident of blood relations resulting within 7 days of the wedding date, damage to property including the venue, burglary and even cases of food poisoning at the function. This scheme has four insurance options -Rs.2 lakhs,Rs.4 lakhs,Rs.6 lakhs and Rs.8 lakhs. Within each of these options, one can get from six different types of covers. The indicative premiums for the four options range from Rs.3770 to Rs.14276.

ICICI Lombard, is another insurance company offering the wedding insurance. This policy covers the Wedding Cancellation, Material Damage to the Property, Personal Accident cover for Insured Person and Public Liability. The above link on their website would provide more details on the insurance policy.

Summary

In India, the basic insurance awareness itself very poor. These kind of insurance types would take long time to catch their eyes. IRDA has to come up aggressively to promote and encourage the insurance companies to sell more policies. It is important type of insurance for the parents who are spending the life savings into son/daughters marriage. If you thing its worth knowing, spread this article to your friends. Thank you for the reading!!. If you have any doubts, please post it in the comments section.

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Introduction

In my earlier article, I have explained why does rupee value depreciate against the dollar currency and the various factors affecting the changes in the currency. As of writing this article, still the pressure on the Rupee against Dollar is more and we are seeing the further erosion on the rupee value. The impact on the economy is more if the currency value changes drastically. It has the positive and negative impact on economy, inflation and lifestyle of people in a country.

It is not easy for a common man to understand the impact in his life because he doesn’t understand the facts about the economics of the country. But, it could be realized if he could read the various magazines and news channels on the similar topic. This article would put down those points in very simple terms to make the things clear for every one. This article explores the possible impact on our country if the value of the currency is further going down. If you have any doubts, please post it in the comments section. Subscribe to our future articles here.

Dis Advantages

1. Imported goods and Oil prices

In India, most of the electronics related goods are imported from outside are at least raw materials taken from abroad. If you want to own a gadget or television sets in the near future, it may cost more than what it was in the few months back. As we come to know, the mobile handset makers has hiked the prices very recently due to the rupee value decline. Every imported goods will see the rise in the price. This include hardware’s like computers,etc. If you are planning to buy a electronics now, you are going to pay more than what you would have paid six months earlier.

India is mostly depend on other countries for the import of Oil products. When rupee value is decreasing, oil companies has to pay more money to buy the fuel from abroad. I have earlier written about the oil price crisis in India and it has more details to know why the oil price is very high in India compare to other countries. Decrease is rupee value is one of the reason for oil price increase.

2. Foreign Education & Travel

Indian students who want to earn a foreign degree would have to spend more money for pursuing the education in abroad. According to the statistics, the existing cost of education and travel would shop up at least 10-15% because of the rupee value depreciation.

3. Importers and Foreign currency borrowers

If you closely looked into the results of the companies in the stock market, compared to the previous quarter the results are negative because of the currency value decrease. That too company having more debt in the foreign currency has to shell out more money to repay their loans. It would continue for the next quarter as there is no sign of improvement in the rupee value against the dollar currency.

Advantages

1. Foreign currency remittances

The one who are getting more advantages on the rupee value decline is foreign currency remittances to India. For example, if your son is working in USA and sending money to India through remittances. You would receive the more money because of the rupee value. If you are in abroad and have accumulated more money in the NRE bank account, it is right time to make the remittances to India to get the advantage of rupee value decrease.

Apart from the working professionals in abroad, those who are getting money in the dollar currency for their work which is done in India also in the positive side. For example, you have a blog or website in that selling advertisement or advertisers paying through PayPal in the dollar currency would gain more in this scenario. There are millions of bloggers  or small business owners who are getting advantages because of this rupee value depreciation.

2. Exporters

When it comes to the industry, the exporters benefit more on the rupee value decrease. IT companies would benefit more because of their exposure to the foreign currency income. The companies like Infosys and TCS has gained more in the stock market because of their outlook in the coming months are very good due to the rupee value decrease. Apart from the IT companies, textile manufactures would benefit more in this scenario.

Summary

This is the another article on the rupee value decrease and its impact on the country. The above points are very high level and would give basic idea for you to understand who are benefited from the currency value changes and how it would impact the country’s inflation and macro economy. If you have any doubts, please post it in the comments section.

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Introduction

It would be embarrassing moment for the family if the insurance claim got rejected after the death of earning member in the family. Sakthy, a factory worker in Bangalore did not know that his family would suffer because of his mistake in taking the insurance policy by hiding few important details about his health and nature of work to the insurance company. This is the case for many rejected claims in the recent days. If you are taking the insurance to cover your family, make sure that family would get the money after your dismal.

Nowadays growing number of rejected claims reported by the IRDA. According to the data, of the 7.62 lakh life insurance claims filed in 2009-10, nearly 15000 were rejected by insurers. The percentage of rejecting is very high with private companies. LIC has the very less percentage of the claims rejections in the report. But, if you look into the reason for the major number of rejected claims are because of the wrong information given to insurers. This article explores the reasons to reject the claims and what are the things to keep in mind while taking the insurance policy. If you have any doubts, please post it in the comments section. Subscribe to our future articles here.

also read:

• What is term insurance?
• Different Types of Life Insurance
• Difference between insurance and investment

Why the insurance claims are rejected?

The following are the main reasons for the claims to be rejected from the insurers side :

Early Death

If the policy holder dies within two years of taking the policy. Insurance company will probe the case closely. It would take six months.

Non-disclosure of health conditions

If the insurer thinks that policy holder deliberately hide his health problem, then the claim can be rejected.

Non-divulgence of family medical history

If the relatives suffer from a hereditary disease and it is not mentioned in the application form at the time of buying the insurance, the claim can be rejected.

Details of work nature

There are specific jobs which carry high risk for the life like working in mine, etc. The nature of job must be revealed to the insurer before buying the insurance policy. If the insurer thinks it is hidden from them, the claim can be rejected.

Over insurance

When you are buying a new insurance policy, you must reveal your total income and other insurance policies in your name. If you are not revealing the facts and taking the over insurance on your name, it would create problem at the time of claim settlement.

What you have to do?

In the general, agents are misleading the policy holders to buy the policy without mentioning the complete details about the. The intention of most of the agents are to sell the products and not to think about your families future when they are in need of claim. At the end your family will be in trouble if you fully depend on the agents. Do the following things to avoid any problem in the claims settlement:

• Don’t rely on the agents. Fill the application yourself and provide all the details for the insurance company. If you have any doubts, directly go to the insurer and clarify your doubts.
• Don’t ever hide your health condition to your insurance company. If there is any need of medical test, please go through it and it would be more helpful at the time of applying the claim.
• Provide all the correct details about your age, occupation and nature of job. Be honest to the insurer.
• After you purchased the policy, cross check once and notify the insurer if there is any problem in the document.

Summary

Don’t take this as slightly when you are buying the insurance policy. There is no use if your policy is not helping the family at the time of claim settlement. All your work would go vain if the policy has the wrong details about you. Please make sure that you are applying the above points while buying an insurance policy. I you have any doubts, please post it in the comments section.

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Introduction

Have you every think about the insurance policy which you have purchased from your insurance agent is whether suits your needs?. In India, most of the households has at least one insurance which is not meeting their needs. They have purchased only because of tax planning or agent’s misselling the policy. It is not worth for paying the premium which doesn’t suit your needs. But, unfortunately you have to loose money if you are surrendering the policy before its maturity period. This article explores some of the way to escape from the bad insurance policy.

If you are buying the new insurance policy, please understand the purpose of the insurance policy and the clear difference between investments and insurance. If you have any doubts, please post it in the comments section. Subscribe to our future articles here.

also read:

• What are the different types of riders in Life Insurance Policy?
• 3 Tips for Saving Insurance Premium
• What is Free Look Period in Insurance?

1. Let policy lapses

It is the costliest option because you are not going to get anything if the policy has not completed the three years. Also, you would loose the tax benefits for the premium paid. The only advantage is you are free from this policy. As I have already told, if the policy not suits your needs, get rid of that spending.

2. Surrender the policy

If you have paid the premium for first three years, surrender the policy. You will get some money back. But, the amount will be less compared to the what premium you have paid for the policy. The amount will be reduced because of the surrender charges. Last year IRDA has put the cap on these charges, which is Rs. 3000 or 20% of the annual premium in the first year if the premium is less than Rs.25000 or it will be Rs.6000 or 6% of the premium.

How to find surrender value of insurance policy?

3. Convert it into a paid-up plan

It would be one good option, in this case insurance company instead of returning to the investor the policy will be converted to the life cover. It will be good option to exit the policy. It is possible only if you have paid the three years of premium payment.

4. Continue if the maturity is near

If you have almost paid the most installments of the policy and only few years remaining. Then it is wise to continue and complete the policy term instead of the exiting the policy. It would be a loss for you if you have surrendered the policy.

Summary

Do you have life insurance policy?. Don’t let agent’s decide suitable policy for you, you must understand your family needs and choose the best policy for you. If it is not worth paying, first step is to exit the policy and find the best term insurance plans. If you have any doubts, please post it in the comments section.

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Introduction

If you are salaried employee in a company, your payslip would have a component called HRA Allowances every month which is given by the companies to all the employees. The purpose of this component is to pay the rent for their house. Also, this is the great component to get the tax exemption if you are staying in the rented house.

In the latest circular, Income Tax dept. has announced about the compulsory submission of landlord’s PAN details if the rent amount exceeds the certain limit. This article explores the news in details. If you have any doubts, please post it in the comments section. Subscribe to our future articles here.

also read:

• PAN card is must on jewellery purchase
• Submit PAN to avoid the higher TDS deduction
• How to apply PAN card from abroad?

Submit PAN if the total rent exceeds Rs.180000 in a year

If you are paying the rent to your landlord and getting the HRA allowances every month, you are eligible for the tax excemption as per the prescribed limit of HRA exemption. If you want to get the benefits, you must submit the rent receipts to your employer every year at the time of tax proofs collection. If you don’t have much idea on this exemption, please read about HRA exemption carefully and submit your rent receipts, it would save you lot of money from the tax payment.

Till the last year, you can submit the any amount as the rent without additional documents except the rent receipts. But, in the latest regulation, if your total rent payment exceeds Rs.180000 in a year (it means Rs.15000 per month), you have to submit the PAN card copy of the landlord.

In the case, if the landlord doesn’t own a PAN card, he must sign the self declaration saying that he don’t have the PAN card and that copy must be submitted to the employer to get the HRA exemption.  This would enforce the tenants to inform the landlords to get the PAN if they don’t have.

Summary

The intention of this update is to maximize the tax collection for the government because there is millions of people not coming under the tax radar but still they are earning more money. It is good move to catch the landlords who are earning lump sum from the rental income and not paying the taxes. If you have doubts, please post it in the comments section.

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This is the post to announce about mobile compatibility for our blog. In the recent days, smartphones and tablets have made the huge difference in the users browsing habits. The large number of users started using their smartphones and tablets to browse the content on internet. The issue which website owners would have normally is to provide the same content in the normal desktop browsers and the mobile devices. The site must have the application to render for the mobile users in the different format.

Today, I have installed an application to browse the entire content in this site on the mobile in good readable format. There is no difference in the website address, you can access the website using www.thinkplaninvest.com. It will automatically detect the mobile device and render in the proper format. This can be accessed in the following mobile devices:

• iPhone
• iPod Touch
• iPad
• Android Smartphones (Samsung, Motorola, Dell, etc.)
• Android Tablets (Samsung Galaxy Tab, Motorola Xoom, Dell Streak, etc.)
• Blackberry
• Palm

It is in the initial stage, you may find small glitches on the view part. If you have any issues, please post it in the comments section. I will keep update it and make it more readable in the mobile devices. Happy Reading!!!

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Introduction

Retirement is one of the crucial phase in every one’s life. If you want to spend your rest of the life in peace without any hassles, you must have the proper planning for your post retirement life. In this aspect, saving money for the retirement life if very crucial and have the significant role for the retirement planning. In the busy world, many are not planning for the post retirement life and want to spend most of their earnings for their present day happiness. You must enjoy the current moment, also should have the planning for your future. This article explores the various points to be considered for the retirement planning. If you like this article, please subscribe to our future articles here.

1. 10% of income for retirement

• Salaried
• If you are salaried person in a company, the 12% of your salary will be deducted for your provident fund contribution. Investing in EPF is one of the best avenue for the retirement savings. The interest rate for the EPF is 9.5%. When you are switching your job to new company, make sure that you are transfer your EPF savings instead of withdrawing the money.

EPF Balance on SMS

• Self-employed
• If you are self employed, then you will not have the option to invest in the EPF fund. You must plan for your retirement. There are various investment options in the market. One among  them is the PPF investment which is similar to EPF for the salaried employees. The interest rates for the PPF is increased to 8.6%.
• It is advisable to allocate 10% of your total income to the retirement fund. It is not necessary to allocate your whole retirement savings into the same investment scheme, you can diversify and invest in the various schemes depends on your age.

2. Increase your investment

If you are salaried person or self employed, you would come across annual salary hike or the increase in your total annual income. It is very common mistake that when your income increase you are tend to increase your expenses and lifestyle, but forget to increase your savings. Whenever there is any increase in your income, increase your allocation to the retirement savings. This would help you to reach the good corpus at the time of retirement.

3. Don’t withdraw the retirement savings

You would have the important expenses in your day to day life. It is very common mistake done by every one to dip into the retirement corpus for meeting the emergency expenses. It is not at all good idea to break the long term investments like retirement. For example, if you have kid’s education or buying a car, you must think of arranging the fund from outside source like applying for the loan or your short term financial plan rather then dipping into the retirement corpus.

4. Borrow for education and save for retirement

If you have expenses for the kids education, get the education loan and don’t disturb the retirement corpus. There are various sources available to get the money for kids education, but many parents sacrifice their retirement savings like provident fund to meet their kid’s education. It is not the good idea.

5. 100-your age=allocation to stocks

• Stocks
• In our country, there is misconception that one should not invest on the stocks for the long term goals like retirement because it is too risky. But, that is not correct thinking because stocks would give higher return than any other investments for the long term goals. But, one must consider their age before exposing to the high risk investments like stocks.
• It is general rule of having percentage stocks in your portfolio is 100- your age. It varies based on the individuals financial capacity. If you are in 20′s, then don’t hesitate to invest in the stocks. It is the right time to pick up some good blue ship stocks and invest your money. If you are over 40′s, then start reducing your exposure to the stock market because.
• Mutual Funds
• If you don’t have time to monitor the stocks, mutual funds are the good option for you. It is less risk compare to the stocks and offer good returns in the long term.

6. Power of compounding

You must understand the power of compounding in the investments. For example, you start in 2008 and want to save for retirement and If regularly invest 1 lacs every year at 15% return per Annam , the investment will be Rs 4.35 Crores in 2038 , but if you do late for 2 years and start in 2010 , it will be Rs 3.27 Crores only by 2038 , that will leave you with Rs 1.08 Crore less money. So, it is always good idea to start investing in your early age for the retirement.

7. Initial years of retirement spending

Once you are in the retirement starting stage, don’t spend in the lavish way because your savings must go for your entire life. In the initial years, take only the 5% of savings each year and later on increase the spending because there would be more medical expenses in the later stage.

Summary

I hope this article would have provided the basic idea on the retirement planning. If you want to read and learn more on the retirement planning, please read the best selling book for retirement planning  Retire Rich Invest by P V Subramanyam. It is one of the best book in the market. If you have any doubts, please post it in the comments section.

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Introduction

This article explores one of the important legal doubt among the people to differentiate between Power of Attorney (PoA) and Letter of Authority (LoA). These two papers has the different purpose and it is important to understand the meaning of the each term. In my previous article I have explained about how an nri can give PoA to another person which would have clearly explained the nature of PoA. But, this article intends to give exact meaning of the terms and when it can be used. If you have any doubts, please post it in the comments section. Subscribe to our future articles here.

What is Letter of Authority (LoA)?

When Karthick leaving India, he has given Letter of Authority (LoA) to his wife for carrying out his work on behalf of him. But, he is not aware of the limitation and scope of the LoA. When his wife could carry out the normal transactions in the bank there is no issues. But, when it comes to dealing with the original documents of Kartick’s house, banker’s refused to hand over to his wife and they said LoA is not sufficient and she must produce the Power of Attorney (PoA) for such operations.

Book : Retire Rich Invest by P.V.Subramanyam

From the above example, it is clear that Letter of Authority (LoA) has to be used for any specific work like doing the bank transactions, etc. But, it has the less authority to carry out any transactions on behalf of the original person. Normally LoA is given for doing the small tasks.

What is Power of Attorney (PoA)?

When you want to give a person to complete the bigger transactions like selling your property or any major legal work on behalf of you, you must give him the Power of Attorney (PoA). This letter give him the complete power to carry out any transactions for you. There are two types of PoA. One id general and another one is special.  if one is giving the special, that person can carry out only the specific operations. If he wants to do the transaction in the bank, there is no need to register the PoA. But, if he want to deal with the immovable property, he must have registered the PoA. But, in the recent judgement from the supreme court, general PoA can not deal with the immovable properties.

How an NRI can use Power of Attorney (POA) in India?

Both, PoA and LoA can be revocable and irrevocable.  In the case of LoA the process is easy and you have the options to set the expiry date for the papers. But, the process is not easy for the PoA. Also, note that owner is the responsible for the doing of the holder of the papers. It is important for you to know what power you are giving to another person and he must aware of the limitation of his power.

Summary

I hope this article would have given basic idea on the Power of Attorney (PoA) and Letter of Authority (LoA). It is important to know the difference between these two terms. If you have any doubts, please post it in the comments section.

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