Endowment Plans

Standard

Term plan
was a pure “RISK PRODUCT”. Endowment plans are an “INVESTMENT
PRODUCT”. There are two benefits that you enjoy with such a plan , one is
a maturity benefit that is paid to the policy holder if he survives the term,
if he does not then the beneficiary gets the death benefit and also the
maturity benefit at the time of maturity. There are two pay out’s happening in
case of death happens.

These
products became an instant success as they provided the life cover with death
and maturity benefits. Markets are loaded with variants of the same category as
they seem more investor friendly as opposed to a normal term plan.

Let us
try and understand how you could pick the right product. Here are a few things
you should know.

Premiums on a higher side

There are
two benefits associated with such plans and this is more of an investment
product, hence the premiums on such plans are higher as compared to a term
plan. If you are looking for a risk cover for your family, then I suggest you
look at a term plan as it costs less, if you need an investment component, then
it will cost you more.

Maturity benefit

The sum
assured plus bonuses declared by the insurance company during the term of the
policy, accumulate to become the maturity benefit which will be paid to the policy
holder if he survives the term

Bonuses available on endowment
plans

These are of two types:

  • Re visionary 
    bonus
    – Bonus 
    that is payable at the time of maturity but gets accumulated yearly based on the performance of the insurer. This is also called a regular bonus.
  • Terminal
        bonus

        This is a kind of loyalty bonus paid by the insurer at the time of
        maturity.

Compounding of bonus

No, the
bonus accumulated and paid at maturity does not get compounded.

Types of endowment plans

Currently
there are following variants available:

  • Unit linked endowment plan – In such plans, the benefits are paid out in
        units, the number of units you own depends on the premium being paid and
        the current market price of the underlying asset. You can opt the
        underlying asset by choosing a combination of debt and equity based on
        your risk appetite. This works more like an insurance packaged with a mutual fund.
  • Full endowment policy – This is a with profit endowment policy,
        where the sum assured and death benefit are equal at the beginning.
        Assuming growth through bonus being paid, the final pay-out is much higher
        than the sum assured.

Change in beneficiary

In an
endowment plan
, there is provision for the same. This needs to be done before
the maturity of the plan and the same has to be intimated through a form –
“Application for change in policy contract”. These forms are available with all
service providers.

Money back plan

This is a
unique endowment plan. The idea here is to help you get funds when you need it
the most, you need not wait for the maturity of the policy. The maturity
benefit is paid back to you in regular intervals after a few years from the
commencement of the policy. The death benefit clause remains the same and is
paid to the beneficiary if you fail to survive the term.

These
policies are considered to be the best and are available across all service
providers.

Submission of medical report

Depends,
your age at entry, sum assured, financial background, personal and family
history are all factors that could decide this.

Loan on insurance

Endowment
plans can be used as collateral for taking a home loan as there is an assured
benefit. You can do this only after the completion of three years of
commencement of the policy.

Tax benefits

All
premiums paid are exempted up to a maximum of Rs. 1, 50,000 under section 80©
of the income tax act. Claims received by beneficiaries and bonus received by
the policy holder are exempted under section 10 (10) D of the IT act.

For
More Details on Endowment Plan Give Us a

Miss
Call On 022-62116588
to know which option could be better for you!!

Endowment Plan

Standard

Term plan was a pure “RISK PRODUCT”. Endowment plans are an “INVESTMENT PRODUCT”. There are two benefits that you enjoy with such a plan , one is a maturity benefit that is paid to the policy holder if he survives the term, if he does not then the beneficiary gets the death benefit and also the maturity benefit at the time of maturity. There are two pay out’s happening in case of death happens.

These products became an instant success as they provided the life cover with death and maturity benefits. Markets are loaded with variants of the same category as they seem more investor friendly as opposed to a normal term plan.

Let us try and understand how you could pick the right product. Here are a few things you should know.

Premiums on a higher side

There are two benefits associated with such plans and this is more of an investment product, hence the premiums on such plans are higher as compared to a term plan. If you are looking for a risk cover for your family, then I suggest you look at a term plan as it costs less, if you need an investment component, then it will cost you more.

Maturity benefit

The sum assured plus bonuses declared by the insurance company during the term of the policy, accumulate to become the maturity benefit which will be paid to the policy holder if he survives the term

Bonuses available on endowment plans

These are of two types:

  • Re visionary bonus – Bonus that is payable at the time of maturity but gets accumulated yearly based on the performance of the insurer. This is also called a regular bonus.
  • Terminal bonus – This is a kind of loyalty bonus paid by the insurer at the time of maturity.

Compounding of bonus

No, the bonus accumulated and paid at maturity does not get compounded.

Types of endowment plans

Currently there are following variants available:

  • Unit linked endowment plan – In such plans, the benefits are paid out in units, the number of units you own depends on the premium being paid and the current market price of the underlying asset. You can opt the underlying asset by choosing a combination of debt and equity based on your risk appetite. This works more like an insurance packaged with a mutual fund.
  • Full endowment policy – This is a with profit endowment policy, where the sum assured and death benefit are equal at the beginning. Assuming growth through bonus being paid, the final pay-out is much higher than the sum assured.

Change in beneficiary

In an endowment plan, there is provision for the same. This needs to be done before the maturity of the plan and the same has to be intimated through a form – “Application for change in policy contract”. These forms are available with all service providers.

Money back plan

This is a unique endowment plan. The idea here is to help you get funds when you need it the most, you need not wait for the maturity of the policy. The maturity benefit is paid back to you in regular intervals after a few years from the commencement of the policy. The death benefit clause remains the same and is paid to the beneficiary if you fail to survive the term.

These policies are considered to be the best and are available across all service providers.

Submission of medical report

Depends, your age at entry, sum assured, financial background, personal and family history are all factors that could decide this.

Loan on insurance

Endowment plans can be used as collateral for taking a home loan as there is an assured benefit. You can do this only after the completion of three years of commencement of the policy.

Tax benefits

All premiums paid are exempted up to a maximum of Rs. 1, 50,000 under section 80(c) of the income tax act. Claims received by beneficiaries and bonus received by the policy holder are exempted under section 10 (10) D of the IT act.

For More Details on Endowment Plan Give Us a

Miss Call On 022-62116588 to know which option could be better for you!!

Best Financial Planner

Standard

What is in a financial plan?

In general usage, a financial plan
is a comprehensive evaluation of an individual’s current pay and future
financial state by using current known variables to predict future income,
asset values and withdrawal plans.This often includes a budget
which organizes an individual’s finances and sometimes includes a series of
steps or specific goals for spending and saving in the future. This plan
allocates future income to various types of expenses, such as rent or
utilities, and also reserves some income for short-term and long-term savings.
A financial planner is sometimes
referred to as an investment planner,
but in a personal finance a financial planner can focus on other specific areas
such as risk management, estates, college or retirement

In business, a financial plan can refer to
the three primary financial statements (balance sheet, income statement and cash
flow statement) created within a business plan. Financial forecast or
financial plan can also refer to an annual projection of income and expenses
for a company, division or department. A financial plan can also be an
estimation of cash needs and a decision on how to raise the cash, such as
through borrowing or issuing additional shares in a company.

What is a personal financial
plan?

DEFINITION
of ‘Personal Finance’ All financial decisions and activities of
an individual, this could include budgeting, insurance, savings, investing,
debt servicing, mortgages and more. Financial planning generally
involves analyzing your current financial position and predicting
short-term and long-term needs.

BREAKING DOWN ‘Personal Finance’

All
individual financial activities fall under the purview of personal finance;
personal financial planning
generally involves analyzing your current financial position, predicting
short-term and long-term needs and executing a plan to fulfill those need within
individual financial constraints.  Personal finance is a very individual
activity that depends largely on one’s earnings, living requirements and
individual goals and desires.

Among the
most important aspects of
personal finance are:

  • Assessing your current financial position – looking at expected cash flow, current savings, etc.
  • Buying insurance to protect yourself from risk and making sure your material standing is secure
  • Calculating and filing taxes
  • Savings and investment
  • Retirement planning

Matters of personal finance include, but are not
limited to, the purchasing of financial products for personal reasons, like
credit cards, life and home insurance, mortgages
and retirement products. Personal banking is also considered a part of personal
finance, including checking and savings accounts and new banking products.

What is the purpose of Financial Planning?

The major purpose and reason for financial planning is to
line up our financial and lifestyle ducks. Most people have a lot going on
financially and with life in general, life insurance, pension plans, education
funds, taxes, employee benefits, wills, power of attorney’s, cash flow to
mention a few . It’s very important that we have informed reasons to base our
financial and lifestyle decisions on. A personal plan becomes like a rudder for
your financial ship. Most importantly it gives you control financially which in
turn reduces stress and will give you an improved quality of life.  Plus
it just makes sense; we plan everything else in our life so why wouldn’t we plan
for the best use of the money we work hard for and create some financial
freedom.

Where do we start?

Before you start a plan you must first identify what
your personal objectives, goals and dreams are. This is the first step in
personalizing your plan. Then you need to inventory your assets, liability
and expenses so we can clearly identify a starting position. All of this
information will be recorded on a data form and may take some time to
accumulate. Many people find that this process is very valuable and rewarding
because it requires:  accounting for expenses, evaluating debt, reviewing
investments portfolio weightings and getting an up to date wills and power of
attorney, all things they have been planning to do but haven’t got around to it
because it’s a daunting job.

The second step is to transfer this information to
financial planning software program. The amounts of input items are vast.
So without a computer program it would be impossible to organize and evaluate
all of this information.

The third step is for a financial planner to
interpret all of this information. A professional Financial Planner will have a
clear understanding of risk management requirements, wealth accumulation
products and purpose, taxes, retirement rules and regulation, government benefits,
estate planning etc. Without this professional knowledge and understanding it
would be impossible to complete a comprehensive personal financial plan.

How do I start
implementing my plan?

You will now have all of the information to make informed
decisions. Once more you need to clarify your objectives and then
take action that will allow you to accomplish each of your identifiable
goals. Your financial planner with give you a step by step process
based on your priority of importance. Some goals you will change immediately
with perhaps a slight adjustment to what you are currently doing. Other goals
may need to be re designed to accomplish your intended result. But remember
that financial planning is like a rocket ship going to the moon, it is off course
90% of the time and corrections must be made. As long as you clearly know what
your objectives and goals are you will always have a clear target to aim for
and can make the required adjustments.

What can I expect from
this process?

You will have a clear and concise alignment of your assets,
liabilities and expenses to your personal objectives, goals and dreams. You
will then proceed with confidence knowing exactly what needs to be done to
accomplish your objectives. Words that I have heard other people say are:
relief knowing it can happen, feelings of confidence, excited about the future,
clear direction to mention a few. The whole process takes a non tangible
position and makes it tangible by attaching actual numbers  and time
frames to your plan which will taking the guess work out of future financial
decisions.

I have been asked before -when is the best time to
start a financial plan? My answer is always the same “the best time
was twenty years ago and the second best time is today”. It’s one of those
things where the sooner you start the better it is but it’s never too late to
start.

Financial planning has value at all stages and ages of life
because your priorities will change:

  • First stage (Starting out years) –When starting out most of our income goes to providing for the
        lifestyle expense. At this stage there are normally few assets but there
        could be liabilities with debt (mortgage etc.) and perhaps a new family
        members having a life insurance planning is important. If there is no
        house or family as yet then most of your surplus income will go to saving
        for a down payment for a house purchase, paying off school debt or
        planning a family. Little money for retirement savings. This is the best
        time to purchase life insurance because of the young age and most often
        there is no health issues so it’s easier to get and the cost are very low.
  • Second stage (Growing years) – Goals change
        as your needs change. Children’s
        education may be important, starting retirement plans and reducing debt
        may also be the major priorities.
  • Third stage (High income years) – This is
        the time that you must save most of your retirement assets. It is often
        your highest earning years and cash flow is commonly more plentiful.
        Income tax, deferral plans will be your focus.
  • Forth stage (retirement) – Your lifestyle
        expenses are paid for from your retirement assets, pension plans and
        government benefits and you are enjoying life and managing your health.
        Managing your taxable income will be key for maximizing income efficiency.
  • Fifth stage
        (estate planning) – You have accumulated several assets and you need to
        plan the distribution of these assets upon your passing. You may want to
        leave a legacy to your family and contribute to a charity or church of
        your choice. Taxes will be an issue and proper planning will be necessary
        for a tax effective distribution of assets. Wills, trusts and power of
        attorneys need to be up to date.

Why is it important to have a
financial plan?

The Importance of Having a Financial Plan. Creating a financial plan helps you see the big
picture and set long and short-term life goals, a crucial step in mapping out
your financial future. When you
have a financial plan, it’s
easier to make financial
decisions and stay on track to meet your goals.

For
More Details on Financial Planning 

Give Us a Miss
Call Now!!  022-62116588 to know which option could be better for you!!

Best Financial Planner

Standard

What is in a financial plan?

In general usage, a financial plan is a comprehensive evaluation of an individual’s current pay and future financial state by using current known variables to predict future income, asset values and withdrawal plans. This often includes a budget which organizes an individual’s finances and sometimes includes a series of steps or specific goals for spending and saving in the future. This plan allocates future income to various types of expenses, such as rent or utilities, and also reserves some income for short-term and long-term savings. A financial planner is sometimes referred to as an investment planner, but in a personal finance a financial planner can focus on other specific areas such as risk management, estates, college or retirement

In business, a financial plan can refer to the three primary financial statements (balance sheet, income statement and cash flow statement) created within a business plan. Financial forecast or financial plan can also refer to an annual projection of income and expenses for a company, division or department. A financial plan can also be an estimation of cash needs and a decision on how to raise the cash, such as through borrowing or issuing additional shares in a company.

What is a personal financial plan?

 DEFINITION of ‘Personal Finance’ All financial decisions and activities of an individual, this could include budgeting, insurance, savings, investing, debt servicing, mortgages and more. Financial planning generally involves analyzing your current financial position and predicting short-term and long-term needs.

BREAKING DOWN ‘Personal Finance’

All individual financial activities fall under the purview of personal finance; personal financial planning generally involves analyzing your current financial position, predicting short-term and long-term needs and executing a plan to fulfill those need within individual financial constraints.  Personal finance is a very individual activity that depends largely on one’s earnings, living requirements and individual goals and desires.

Among the most important aspects of personal finance are:

  • Assessing your current financial position – looking at expected cash flow, current savings, etc.
  • Buying insurance to protect yourself from risk and making sure your material standing is secure
  • Calculating and filing taxes
  • Savings and investment
  • Retirement planning

Matters of personal finance include, but are not limited to, the purchasing of financial products for personal reasons, like credit cards, life and home insurance, mortgages and retirement products. Personal banking is also considered a part of personal finance, including checking and savings accounts and new banking products.

What is the purpose of Financial Planning?

The major purpose and reason for financial planning is to line up our financial and lifestyle ducks. Most people have a lot going on financially and with life in general, life insurance, pension plans, education funds, taxes, employee benefits, wills, power of attorney’s, cash flow to mention a few . It’s very important that we have informed reasons to base our financial and lifestyle decisions on. A personal plan becomes like a rudder for your financial ship. Most importantly it gives you control financially which in turn reduces stress and will give you an improved quality of life.  Plus it just makes sense; we plan everything else in our life so why wouldn’t we plan for the best use of the money we work hard for and create some financial freedom.

Where do we start?

Before you start a plan you must first identify what your personal objectives, goals and dreams are. This is the first step in personalizing your plan. Then you need to inventory your assets, liability and expenses so we can clearly identify a starting position. All of this information will be recorded on a data form and may take some time to accumulate. Many people find that this process is very valuable and rewarding because it requires:  accounting for expenses, evaluating debt, reviewing investments portfolio weightings and getting an up to date wills and power of attorney, all things they have been planning to do but haven’t got around to it because it’s a daunting job.

The second step is to transfer this information to financial planning software program. The amounts of input items are vast. So without a computer program it would be impossible to organize and evaluate all of this information.

The third step is for a financial planner to interpret all of this information. A professional Financial Planner will have a clear understanding of risk management requirements, wealth accumulation products and purpose, taxes, retirement rules and regulation, government benefits, estate planning etc. Without this professional knowledge and understanding it would be impossible to complete a comprehensive personal financial plan.

How do I start implementing my plan?

You will now have all of the information to make informed decisions. Once more you need to clarify your objectives and then take action that will allow you to accomplish each of your identifiable goals. Your financial planner with give you a step by step process based on your priority of importance. Some goals you will change immediately with perhaps a slight adjustment to what you are currently doing. Other goals may need to be re designed to accomplish your intended result. But remember that financial planning is like a rocket ship going to the moon, it is off course 90% of the time and corrections must be made. As long as you clearly know what your objectives and goals are you will always have a clear target to aim for and can make the required adjustments.

What can I expect from this process?

You will have a clear and concise alignment of your assets, liabilities and expenses to your personal objectives, goals and dreams. You will then proceed with confidence knowing exactly what needs to be done to accomplish your objectives. Words that I have heard other people say are: relief knowing it can happen, feelings of confidence, excited about the future, clear direction to mention a few. The whole process takes a non tangible position and makes it tangible by attaching actual numbers  and time frames to your plan which will taking the guess work out of future financial decisions.

I have been asked before –when is the best time to start a financial plan? My answer is always the same “the best time was twenty years ago and the second best time is today”. It’s one of those things where the sooner you start the better it is but it’s never too late to start.

Financial planning has value at all stages and ages of life because your priorities will change:

  • First stage (Starting out years) –When starting out most of our income goes to providing for the lifestyle expense. At this stage there are normally few assets but there could be liabilities with debt (mortgage etc.) and perhaps a new family members having a life insurance planning is important. If there is no house or family as yet then most of your surplus income will go to saving for a down payment for a house purchase, paying off school debt or planning a family. Little money for retirement savings. This is the best time to purchase life insurance because of the young age and most often there is no health issues so it’s easier to get and the cost are very low.
  • Second stage (Growing years) – Goals change as your needs change. Children’s education may be important, starting retirement plans and reducing debt may also be the major priorities.
  • Third stage (High income years) – This is the time that you must save most of your retirement assets. It is often your highest earning years and cash flow is commonly more plentiful. Income tax, deferral plans will be your focus.
  • Forth stage (retirement) – Your lifestyle expenses are paid for from your retirement assets, pension plans and government benefits and you are enjoying life and managing your health. Managing your taxable income will be key for maximising income efficiency.
  • Fifth stage (estate planning) – You have accumulated several assets and you need to plan the distribution of these assets upon your passing. You may want to leave a legacy to your family and contribute to a charity or church of your choice. Taxes will be an issue and proper planning will be necessary for a tax effective distribution of assets. Wills, trusts and power of attorneys need to be up to date.

Why is it important to have a financial plan?

The Importance of Having a Financial Plan. Creating a financial plan helps you see the big picture and set long and short-term life goals, a crucial step in mapping out your financial future. When you have a financial plan, it’s easier to make financial decisions and stay on track to meet your goals.

For More Details on Financial Planning Give Us a

Miss Call On 022-62116588 to know which option could be better for you!!