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Information provided on this newsletter has been independently obtained from sources believed to be reliable. However, such information may include inaccuracies, errors or omissions. and its affiliates, information providers or content providers, shall have no liability to you or third parties for the accuracy, completeness, timeliness or correct sequencing of information available on this newsletter, or for any decision made or action taken by you in reliance upon such information, or for the delay or interruption of such information. , its affiliates, information providers and content providers shall have no liability for investment decisions or other actions taken or made by you based on the information provided on this newsletter.
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Life is so unpredictable that no one knows what will happen in the next second.

Life insurance is the best possible solution to make financially secure future for your family. You will not need to worry more about your family’s future and you can enjoy a stress-free life.

But before buying any life insurance policy, you must know some important facts related to life insurance. These facts will help you at different stages of your insurance policy.

12 things that you must know before buying life insurance.

1. How Much Coverage You Need
How much coverage will be sufficient to pay your family’s future bills? Many people find this as a the most difficult thing to decide. Different person suggest different methods to calculate the coverage. You should consider your future goals like own house, children education & marriage expenses, household expenses, medical insurance expenses , emergency fund along with current loans and EMIs. After calculating a figure subtract your current asset value. You come with a figure, but this is based on the current prices. May be due to the inflation, this amount would fall short. So, increment the figure with a inflation rate. That final amount should be your coverage.

2. Tell Everything On Application
Insurance companies do their work on the basis of seven insurance principles. The first principle is “Principle of Utmost Good Faith” that implies, the insurance contract must be signed by both parties (insurer and insured) in an absolute good faith. The person getting insured must willingly disclose to the insurer his complete true information regarding the subject matter of insurance. The insurer’s liability gets legally canceled if any facts, about the subject of insurance are either omitted, hidden or presented in a wrong manner by the insured. So it is advisable to disclose all the facts about your health and habits to the insurance company on application.

3. In Case, You Already Have Life Insurance From Employer
Most companies give their employees a certain amount of coverage for free in group life insurance. For most of the families, coverage amount is not sufficient. Even if your employer’s insurance did cover your family’s needs, you would be left with no coverage if you quit or get laid off. What will your family do, if any uncertainty happens with you during this period? To avoid such condition in life, It makes more sense to buy your own policy because it will be with you as long as you pay the premium amount.

4. Premium Must Be Affordable
You have to pay a certain amount of premium at regular intervals. The premium amount is directly depend upon the coverage. Higher the coverage amount, higher the premium you have to pay. Before buying life insurance policy, make sure that the premium amount must be affordable as per your present financial conditions. Even If the premium increases later, still you will be able to afford it.

5. Tenure of Life Insurance
Tenure of insurance policy play a very significant role during application time. Premium is also depend on the tenure of the policy. Longer the policy tenure, more the premium you have to pay. There is no one figure answer of this question, but you can choose any policy tenure on the following basis
  • Maximum tenure that a policy allows. Like maximum tenure can be 25 years till the age of 60 years.
  • The retirement age minus your current age can also considered as tenure of the policy.
  • Insurance policy till the age you would complete your all financial responsibilities towards your family.
6. Premium Frequency
The next deciding this is often you can afford to pay policy premium. You can either pay the entire premium amount in lump sum or you can pay it at regular intervals like, monthly, quarterly or annually. But the frequency of your premium should be based on practical assessment of your financial situation, which should be done keeping in mind what will be more convenient for you.

7. Claim Settlement
The major responsibility of your insurance company is to pay claim amounts and deliver maturity benefits without any delay. Just like insurer check your credit score before making a commitment, make sure that you also check the claim settlement ratio of the insurance companies & give preference to insurer having a higher ratio.

8. Policy Renewal Process
You can renew most term insurance policies for one or more terms even if your health has changed. Each time you renew the policy for a new term, premiums may be higher because of risk increase with age increase. Ask what the premiums will be if you continue to renew the policy. Also, ask if you will lose the right to renew the policy at a certain age. These are very important questions to know because at an older age may be other insurer would not provide insurance to you.

9. Review Your Policy Every Few Years
Review your life insurance policy after every 2-3 years. Ask some questions like How will inflation affect your future needs? Do you need more insurance when your family size increases or for your future plans? You can also consider the factors when some financial responsibilities are fulfilled like, your children complete your study and get married, you repaid your loans. At that time, you would not need the present life coverage. You can also discuss with your agent to make changes in your policy with the change in your income and needs.

10. Need of Life Insurance
The main purpose of life insurance is to provide financial security to dependent spouse, children or parents in case any uncertainty along with savings and making retirement secured depending on which policy you have taken. You must understand the basics of why a policy is to be taken.

11. Never Forget to Pay Premium
If you don’t make timely payments as per the insurance policy, the insurer may cancel your policy after a certain period. Your all past years premium goes down into the drain. Generally, insurer allowed to make late payment within a specified period, even in this case you have to pay the late payment charges which will increase your insurance cost.

12. Tax Benefit
The Indian government also encourages the life insurance through their inclusion in the deductions that can be availed under Sections 10(10D) and 80C of the Income Tax Act. An individual can claim the deduction for premium paid for life insurance up to a maximum of 10% of sum assured under sec 80 C. Even the claim amount in case of death of the policyholder is totally tax-free for the beneficiary under sec 10(10D). So, Sit with your agent and let him/her help you choosing what best fits your need while taking a life Insurance.

Retirement is one of the most important stages of your life for which you work and should save for. With the break-up of the joint family system in India, increase in longevity (life expectancy) due to advanced medical innovations, shorter work-span and lower job security; ‘Retirement Planning’ assumes greater importance.
If you are creating an Investment Plan, your top most priority should be to save and invest for your retirement.  Do not think that it’s too early to start planning for retirement. It is very important that you start early for your retirement.
Let’s understand the stages of Retirement planning.

Stages of Retirement planning
  • Accumulation phase – During this phase, you save and invest for your retirement. This is the stage where you invest to generate a decent corpus which is assumed to take care of you / your family during retirement.
  • Transition to Retirement – This is an individual’s transition from work into retirement.
  • Withdrawal phase / Wealth Consumption– In this phase, the retiree withdraws the income from the accumulated fund and enjoys the retired life.
Retirement Planning in 3 Simple Steps

Let’s now calculate the retirement corpus and the required amount of savings to achieve your retirement goal. You can do this in 3 simple steps as below.

Example : Mr Raj (35 years) wants to plan for his retirement. His current annual living expenses are around Rs 3.6 Lakh. He wants to retire at 60 years and expects his life expectancy to be 80 years. He would like to know the projected / required retirement corpus and what is the required savings to meet his retirement goal amount?? So, Raj has 25 working years and would like to enjoy 20 years of retirement life.

Step 1 – Project your Expenses
We are all aware that the living expenses may not remain the same. They keep increasing. So, we need to first project the expenses by assuming a certain rate of Inflation (let’s assume it as 7%).

The current expenses of Rs 3.6 Lakh p.a. will be projected to be at Rs 19.53 Lakhs, in the first year of Raj’s retirement. He needs Rs 19.63 Lakh to continue with the same spending pattern in the first year of his retirement.

However, he assumes that some of the current expenses may not be relevant when he retires. So, he assumes the projected expenses to be Rs 14.65 Lakh only (75% of 19.63 Lakh).

Step 2 – Calculate the required Retirement Corpus
Raj expects to earn 8% from his investments after the retirement. So, we now need to calculate the required retirement corpus. At 8% ROI and 7% inflation rate, the real rate of return is 0.9346% (Real rate of return is generally used in ‘withdrawal phase’ of the investments).
To withdraw inflation adjusted expenses of Rs 14.65 Lakh for 20 years (retirement life) at 0.9346% real rate of return, the required Retirement Fund is Rs 2.66 crore.

Step 3 – Calculate required savings per year / month to accumulate your retirement corpus
In this step, let us calculate the required savings amount to achieve the retirement goal amount (Rs 2.66 cr).
Raj wants to invest in safe fixed income securities only, and expects 9% rate of interest from his investments. To accumulate Rs 2.66 cr in 25 years, at 9% ROI, Raj has to save and invest Rs 3.14 Lakh per year or Rs 23,743 per month.
You may try the calculations using the Retirement corpus calculator.
Health insurance becomes the necessity of life because health issues are the reality of present life.

A health issue doesn’t come by knocking so, it is better to safeguard yourself before the arrival of such situations. A health insurance policy is only one solution to do this.

A health insurance policy doesn’t provide any shield against health issue but provides protection from the unbearable financial burden. In the medical emergency, a health insurance covers all your medical expenses hospital, treatment, surgery and provides a financial cushion.

9 Points To Consider Before Taking Health Insurance Policy

1. Individual Vs Floater Health Insurance
Floater health insurance plan covers the entire family members under a single policy. On the other side, a single person health insurance policy comes under an individual health plan. You can go with anyone. Ask your agent about what would suite you and your family the best.

2. Make A Requirement List & Compare With Policy
There are many health insurance companies having the same feature or having a little bit different. It becomes very difficult to decide, where you should go. Make requirements list that you are looking in an insurance policy. Compare the requirement list with the features of your shortlisted policies. The policy who fulfill more requirements will win the race. Or, just take the help of an advisor.

3. Coverage is More Important Than Premium
Some health insurance charge lesser premium but they have some hidden clause like providing health insurance up to the age of 40-45 years. Don’t go with any such plans because the chances of suffering from any major health issues start after the age of 45-50 years. It is too good to have health insurance policy who cover for a longer period. No doubt, the premium of these policies is higher but will prove beneficial in long run.

4. Pre- Existing Disease
Pre-existing disease means already suffering from any disease at the time of buying a health insurance. For such a situation, there are two types of insurance policies. First one, who don’t cover pre-existing disease at all. In this case, you can never claim for medical expenses arising due to pre-existing disease. The Seconds one, who don’t cover pre-existing disease from the first day of the policy but accept after a waiting period, say 3-4 years. In this case, you can claim for pre-existing disease only after the completion of a waiting period.

5. Hospital Room Rent Capping (most important) Hospital room rent capping is the most important thing that you should know. Insurance companies restrict the room rent up to a certain limit, in most of the cases, it is 1% of the sum assured of the policy. On the other hand, the hospitals charge for the room according to the type of room selected i.e. general, private, deluxe etc. In case of costlier than the capping limit, the insurer deducts not only the additional room rent charges but also deduct a portion of other medical charges in proportion to the room rent.

6. Flexibility of Policy
Flexibility arises a question, can a company changes their terms at the time of emergency? If a person has a health insurance policy which offers only cashless claim settlement.  One day he gets a heart attack and in an emergency, he has to admit in a hospital that doesn’t come under cashless network with the insurer. In such situation, whether the insurer pays reimbursement or rejected the claim. Sometimes, in a similar case, the insurance company doesn’t pay any claim because of their terms & conditions. So, make clear all such facts at the time of buying the policy.

7. Claim Settlement
In most of the health insurance policies, the claim is settled down by TPA (third party administrative). In TPA, Health Insurance Company only sold the policy. All claim related work like claim settlement and collecting claim documents is done by TPA. In such a case, search for the TPA and try to find out the how efficiently it works. You can find this from the old clients of the insurance company or from the hospitals that are within the network of TPA.

. Buy a health insurance policy as earlier as possible
It is often seen that people finding their dream policy that has less premium, high cover, less claim settlement time, no further processing & so on. But sometimes they become too late. They might cross-age limit or get suffered from some disease which will never be covered. So buy health insurance policy at the early stage.

9. Top-Up Health Plan
Anytime you feel that your current sum assured limit is falling short, you will have an option to a top-up health plan. A top-up health policy provides an additional coverage. It is for reimbursement of expenditure which arises out of single illness beyond the limit of the existing cover. The top-up plans are advisable in need of increasing the health insurance coverage because the top-up plans are cheaper than the basic health insurance.


Health insurance is about to save you from financial burden of the hospitalization and not for providing financial security to your family. Keep all these points in your mind while buying a health insurance policy and listen to what your advisor advises you!
Please mark all your queries / responses to
Information provided on this newsletter has been independently obtained from sources believed to be reliable. However, such information may include inaccuracies, errors or omissions. and its affiliates, information providers or content providers, shall have no liability to you or third parties for the accuracy, completeness, timeliness or correct sequencing of information available on this newsletter, or for any decision made or action taken by you in reliance upon such information, or for the delay or interruption of such information. , its affiliates, information providers and content providers shall have no liability for investment decisions or other actions taken or made by you based on the information provided on this newsletter.