Health Insurance Porting -Benefits & How to Port your Cover without losing Benefits.

Not happy with your health insurance policy? Here’s how you can port your cover without losing benefits.

→ If you are not satisfied with your existing health insurance policy or you believe that the benefits you get from your health plan are not worth the premium you pay, then you have an option to port it to a different insurer for a better plan. In this case, the no claim bonus on existing policy also gets ported.

→ Health insurance policies can be ported to a different insurer while continuing the accrued benefits of the existing policy. For example, if in your present health plan some treatments are not covered for the first two years & already one year has passed, then in the new policy offered by a different insurer the waiting period for the same treatment will be reduced by one year. Worth mentioning here that the same benefit will not be applicable to a senior citizen mediclaim policy.

→ It is easier to port the health insurance plan of a young person than a senior citizen. Companies often show reluctance to port senior citizen plans as the waiting period is either reduced or entirely waived off & the new insurance company's liability comes into effect earlier.

→ It may be noted that individuals having a chronic illness or who have already undergone a hospitalization may get limited options when it comes to health insurance portability.

Will the benefits continue?
→ Yes. Portability is allowed under all individual indemnity health insurance policies issued by general insurers and health insurers including family floater policies. Wherein, the continuity benefits are offered on time-bound exclusion to the extent of the previous sum insured.

What are the advantages of porting instead of purchasing a New Policy?
1. New Sum Insured : When it comes to portability, the sum insured & accrued bonus will be added, to determine the new sum insured. Furthermore, the existing no claim bonus will also be added to the new sum insured.
2. Continued Previous Benefits : All the benefits provided by the old policy will remain in force in the new policy.
3 Lower Policy Premiums : Due to the myriad of policies offered by many insurance players, if you are porting your policy, your new insurance provider would probably offer you existing benefits enjoyed in your old policy for even lower premiums. This will bring down the cost of insurance & help save more money.
4. Transparency : As the policyholder has the option of moving to a new service provider, they would have the option of porting their policy to an insurer that follows transparent practices, with no hidden conditions and clauses.
5. Customised Policy : Policyholders have the privilege of modifying their existing policy to suit their health requirements, such as opting for additional cover as per their current lifestyles & health stats, or changing their nominees.
6. Time-bound Exclusions Absent : Policyholders needn't worry about time-bound exclusions, when porting their policy.
7. Better Claim Settlements : If policyholders find the claim settlement process very slow & cumbersome with their previous insurer, they might enjoy better services with their new insurer, depending on the insurer's claim settlement ratio.

Will the Premium Change?
→ The premium on the new policy may vary depending on the underwriting process of the new insurance company for the particular product.

→ "The premium is calculated based on the age, geography, health conditions & gender in some of the products. However, the premium may differ from insurer to insurer based on coverage, terms conditions, sub-limits / no sub limits, room capping & waiting periods.

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10 Golden Investment Rules for First Time Earners

10 Golden Investment Rules for First Time Earners

Introduction : Congratulations on landing your first job. As the stepping stone to a long career — one that could see you rise to new heights & success — you also have dreams you wish to accomplish. A comfortable car, a new home, higher education, happy retirement & others. And while your investment goals may be as unique as the journey you take to reach them, here are ten golden investment rules to help you get where you want to be.

1. Create a Financial Plan : Build a financial strategy that includes your goals, investment timeframe & risk appetite. Knowing your risk profile is important when creating your financial strategy. Get to know your comfort level with risk & how much risk you need to take.to achieve your financial goals.

2. Start investing at the Earliest : When it comes to investments, the earlier you begin, the more benefits you stand to gain. Start investing now to allow the power of compounding to reap returns at a later stage. Investing in Equity & Equity-oriented mutual funds coupled with the power of compounding can help grow your investments into a substantial sum of money over time.

3. Diversify : You may have heard the saying, "don't put all your eggs in one basket." This principle also applies to your investments. Diversification is essential when investing as it ensures that any underperformance by one asset class could be offset by a good performance from other assets in your investment portfolio. By investing across asset classes, such as equity, fixed income, gold & alternate investments, you can achieve good returns with a balanced approach to risk.

4. Stick to Asset Allocation : Starting from your first job, you may have goals to achieve. Every goal may have a specific timeline. Your short-term goals could be achieved within the next year, medium-term goals in the next five years and long-term goals beyond five. Hence, choose suitable asset classes depending on your financial goals. Consider your risk appetite, time horizon & financial objectives in deciding the right asset allocation mix for your portfolio.

5. Know your Taxes : Your salary may be subject to tax & hence, knowing where & how much of your income is taxed is important. Learn more about investments & products that offer you tax benefits & tax exemptions offered under various sections of The Income Tax Act, such as those for Equity-Linked Saving Scheme - ELSS funds, Life insurance premiums, etc.

6. Be Informed : Do not invest in any instrument or asset class you don't understand. It can be a good time to learn more about different kinds of investments, potential rewards & the potential risks when investing. Knowing how your investments make money or how losses could happen is essential. Being informed can help you make smart investment choices.

7. Explore Mutual Funds : A mutual fund is a financial tool that pools money from many investors to invest in different assets such as equity, debt or gold. Mutual funds are simple to understand, affordable & offer professional management all combined in one. But more importantly, it also gives you instant diversification & liquidity. You can also choose to invest regularly through a Systematic Investment Plan (SIP's) or a lump sum amount as per your convenience. SIP is a good option for investors looking to instill discipline into their investing habits. Getting the freedom to choose schemes of your choice depending on your financial needs & risk-bearing capacity is the most significant benefit that mutual funds can offer.

8. Think Long-Term : When investing, consider doing so for the long run. It can ensure you are not hassled about daily or weekly stock market volatility. Stick to your financial strategy despite market movement that can help you focus on your long-term goals & time horizon.

9. Invest Regularly : A good way to discipline your investment habits is to ensure you make regular investments. It can help you beat market volatility, especially if you use Mutual Fund SIP's or choose to invest in stocks systematically. As you contribute small portions of your money to your investment portfolio regularly, you will be able to create a corpus over time without taking the pain of investing a large sum at one go.

10. Review your Strategy Periodically : Since no one can control market fluctuations, political environments or the economy, change is a constant that you can expect. You can consult with a financial advisor to help you review your strategy regularly. Consider your financial advisor as your expert navigator on your investment journey. Through their expertise & financial knowledge, you will know where you stand financially & what you need to do to reach your goals successfully. Many brokers or financial distributors also offer their recommendations on investments, diversification, asset allocation, etc. online for both first time & experienced investors. They also generally track & review their recommended investments to take them to closure. Investors can also take benefit of this facility.

In Conclusion : Following the above ten fundamental investment rules can increase your chances of building wealth & meeting your goals successfully. Above all, motivate yourself to keep your eyes on the larger picture to make smart investment choices despite market ups & downs.

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Investment into Mutual Funds Simplified

Is One of the Following Questions on your mind regarding Mutual Funds?

1. How much to invest in MutualFund?
2. Is my Existing Fund Performing?
3. SIP or Lumpsum?
4. Best Fund Suited to My needs? (Hint : Not always the top performing Fund in a prior period)
5. How can I add an extra 2-3% Return annually?

Benefits of Consulting & Investing For Tax Saving as well as in General for SIP, Lumpsum & Other Mutual Funds Investments with us.

1. Proper Guidance With Respect to Life Cycle Risk appetite Goals.
2. Proper Fund Selection based on above.
3. Follow up periodically. 

Apart From this You will get a ton of supports & markets research from IIFL Research team with products into Govt & Corporate Bonds, Corporate Fixed Deposits etc to achieve an extra 2-3% Return annually.

Practically a no Brainer Right? What are you waiting for? 

Drop a message on Whatsapp 7506265365 or mail at rajeshnair72@gmail.com for more details or help to invest.

Happy to Help.

Five sources of income beyond EPF, PPF that are exempt from Income Tax

Five sources of income beyond EPF, PPF that are exempt from Income Tax : 
→ As per income tax rules any individual having an annual income of more than ₹ 2.50 lakh is required to file income tax return.

→ It is necessary irrespective of the source of income. While salary income and business income are taxed as per the applicable individual tax slabs, there are certain sources of income that are exempt from income tax irrespective of the amount.
→ Maturity proceeds of Public Provident Fund (PPF), Employees Provident Fund (EPF), insurance policy are exempt from income tax.
→ Similarly, there are certain other sources of income that are not taxable : Tax experts say income from gift including marriage gift, share of profit in a partnership firm, educational scholarships, gratuity & ancestral property is also exempt from income tax.

Five sources of income that are exempt from Income Tax :
1. Share of profit in Partnership Firm : The share of profit, received by a partner, in the total income of the firm is exempt from income tax in the hands of the partners. As share of partners is arrived after providing for all expenses & income tax, partnership is not taxable. However, remuneration received by a partner & interest on capital received by the partner is taxable.

2. Marriage Gift : Gifts received by a newly-wed couple during their wedding are exempt from tax. If the gifts are given by immediate family members, such as their parents, siblings or any of their siblings’ spouses, or the siblings of their parents, they are exempt regardless of the value of the gift. Whether it is cash, stocks, jewellery, automobiles, electronics, artefacts, etc., or even immovable presents such as house or land, shall not attract tax & are exempt under Section 56 of the Income Tax Act, 1961.
However, if gifts are not marriage gifts, then they will be taxable if the combined value of the gifts exceeds ₹ 50,000.

3. Educational Scholarship : Any scholarship granted to meet the cost of education is exempt from income tax as per Section 10(16) of Income Tax Act 1961. However, to claim the expenses the scholarship income should have been used to meet the education expenses only.

4. Ancestral Property : The tax applicable while inheriting an asset is called Inheritance Tax or Estate Tax. In India, Inheritance Tax is not levied & (also referred to as Estate Tax) is a tax which is levied at the time of inheriting any asset. Inheritance Tax is not levied in India. So any amount received under a Will or by way of inheritance or in contemplation of death of the payer is exempted from income tax under Section 56 (ii).

5. Agricultural Income : In India, agricultural income is exempted from taxation & not included under total income. Agricultural income refers to income earned from sources that include farming land, buildings on or identified with agricultural land & commercial produce from horticultural land.

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How a Comprehensive Health Insurance Policy differs from a Basic Health Insurance Plan

How a comprehensive health insurance policy differs from a basic plan?

Discussing the concept of a Comprehensive Health Insurance Plan & how it differs from a regular or basic health insurance policy.
→ Health Insurance is essential to safeguard savings in the event of a medical emergency. While there are several options available, customers should research the features & options before deciding on a policy.

→ It's vital to understand that different health insurance plans fulfill different purposes. Some may cover only a specific group of people, whereas some may cover a specific disease.

→ Here, we are discussing the concept of a comprehensive health insurance plan & how it differs from a regular or basic health insurance policy.

Let's understand it under different sub-heads :
1. Coverage : Comprehensive medical insurance covers the cost of hospitalisation, daycare procedures, medical care at home, ambulance charges, among others. It offers extensive coverage & acts as a financial cushion in case of medical emergencies.
On the other hand, a basic health insurance policy covers medical expenses for illnesses or injuries. At the same time, it protects policyholders from sudden medical expenses & reimburses the bills or pays the medical care provider directly on the policyholder’s behalf.
In short, a basic health insurance plan helps policyholders in staying covered against various diseases. While, a comprehensive policy covers outpatient as well as inpatient treatments, including consultations, medical tests as well as hospital stays.

2. Inclusions & Cost : Comprehensive health insurance is generally designed without any capping for room rent/ICU charges & doctor’s fees. It also does not have any sub-limits for any coverage such as domiciliary hospitalisation. It offers the maximum benefit to the insured as compared to the basic health insurance cover & hence the cost is also higher.

3. Value-Added Services : Unlike basic health insurance, comprehensive health plans come with valued added services such as pharmacy & diagnostic centre tie-ups, doctor consultation, gym membership discount & many such features which add to the health cover.

Conclusion : So, which is better?
→ As per market experts, a comprehensive plan is much better than the regular health cover in terms of the sum insured, benefits offered, diseases covered, flexibility, etc. A basic plan has limited benefits.
→ However, it's always on the customers to pick the policy as per their needs & fund availability.

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Why term insurance policies that promise to pay back premiums are avoidable?

Why term insurance policies that promise to pay back premiums are avoidable?
Term Insurance policies also come with an option to return your premiums, but they are costly. If you invest the premium difference in a mutual fund SIP, you can earn more.

→ A pure term life cover is an insurance policy that promises to pay your nominee an amount (sum assured of the policy), if you die. But it doesn’t come bundled with investment, unlike traditional life insurance policies.
→ But insurance companies have another way of selling it to you. What looks like a term cover, but comes with an investment wrapper around it. Though you get some return from this policy even if you do not die, the premium is higher.

Rather Investing via mutual fund SIP earns better returns :
→ The right way to look at a life insurance policy is that you pay a cost for protecting your family’s financial future. That is not an investment. That’s why a pure term life cover comes cheap. Whatever extra you save, on account of a low premium, you are free to invest elsewhere & earn returns.

→ Let’s look at policies from HDFC Life Insurance & ICICI Prudential Life Insurance :
→ HDFC Life has a term policy for a 30-year-old woman, with an annual salary of around ₹ 15 lakh, which she can buy for the next 30 years at an annual premium of ₹ 10,690. In this case, the premiums paid will not be returned, it is a pure term policy. In the same policy, you have the option to get your premium back. Here is where the extra cost starts to stack up. Now, the premium itself increases to ₹ 23,230 a year. Hence, for the next 30 years, you pay an annual excess charge of ₹ 12,540. Over a period of 30 years, that is a difference of ₹ 3,76,230.
→ Let’s not stop here. You can take the difference in the amounts of the two types of policies and break it up into equal monthly investment amounts of ₹ 1045 to invest in equity-oriented mutual funds. At an assumed rate of 10% annually, continued for 30 years, this will grow to roughly ₹ 24 lakh. By opting for the regular term policy instead of the return of premium cover, not only are you saving money but also earning a lot more by investing it correctly.
→ ICICI Prudential iProtect Smart has a return of premium product version & a regular one. The difference in annual premium of the two versions, assuming a maturity age of 60 years & a policy term of 30 years, is ₹ 13,000 annually. That is a difference of ₹ 3,91,000 over a period of 30 years.
→ Monthly investments worth ₹ 1,086 for the next 30 years at an assumed return of 10% a year will get you approximately ₹ 25 lakh. This is a lot more than any return of premium or survival benefit amount that the policy will pay out.

What should one do then?
→ When something sounds too good to be true, it probably is. A term life insurance policy that gives you your premium back is just that. You are losing the opportunity to earn better returns elsewhere by paying a high premium.
→ If we can figure out the most effective & efficient way to invest money for long periods or decades, it’s hard to imagine that insurance companies don’t already know this.
→ Mixing insurance & investment is always costly. It’s always a better idea to separate investment from insurance. Don’t fall for the bogus charm of ‘return of premium’ on your term policy. Maximise your life cover & buy pure term life policies & invest your savings elsewhere, say a quality mutual fund, for better returns. Keep it simple.

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