Author: Team Jagoinvestor

Buying a new House? Here are 10 additional expenses you should be ready for!

Posted on by Team Jagoinvestor

Are you planning to buy a house? If yes then, you would have planned your investments and saving in line with the “Cost of the house”, you are looking for. But, when we buy a house, there are so many other events/costs which comes during or after buying the house which we do not plan well beforehand.

In this article, we will look at various things where we might have to spend money for. If you are planning to buy a brand new house, this article will give you a good direction on how to plan out your finances.

List of expenses associated with the purchase of a new home

 1) Stamp Duty

Stamp duty is a tax, levied by the state government on every transaction of property i.e. buy and sell, whether it be commercial or residential property. As it is levied by state govt. the rate varies from state to state. It ranges from 3% to 10%, depending on the slab decided by the particular state (in Maharashtra it is 5% of market value or agreed value of property whichever is higher).

Stamp duty is calculated on the higher value of any of the following:

  • The ready reckoner rate also known as circle rate/market value which is predefined every year by state government for every town, state or village, or
  • The agreement value of property. For example, if the agreement value of a property is Rs 50 lakhs and the value according to the ready reckoner rate is Rs 40 lakhs, then, the stamp duty would be calculated on the higher value, i.e., Rs 50 lakhs.

2) Registration cost

For registering a property on your name, the state government will charge you a registration fee. It varies from state to state. But most of the cases it is 1% of Market value of the property. Registration fee is lowered if the buyer is a senior citizen or a woman. In most cases, the builder will add this cost when they quote the house value to you.

3) Interior Cost

When you get the new house, its the bare minimum house with walls, electric points. It’s your job now to furnish it and decorate it as per your taste.  So, it is suggested to consider the cost that you may need to spend on interiors. And if you want to do marble flooring, designer wallpapers, texture paintings on wall, chandelier, modular kitchen, etc… the interior cost will tend to go up.

4) Advance maintenance fee 

When we move to a new house, and if it is in a newly constructed project, usually we are asked to pay a maintenance fee for a year or two by the builder. It can be a decent amount if you consider advance payment, so please consider that.

5) House warming party

When you move to a new house, you may feel like celebrating it with your friends or family. Some people may like to have a grant celebration or some may like to have a small party with close friends & relatives. So, the cost of house warming party varies from the taste of person to person, find out how do you want to celebrate it? And accordingly, plan for that cost separately.

6) Furniture

Many people want to set up furniture before moving to the new house and some people do it after 2 to 3 years of moving in, which is also okay. So, if you want to move in, to furnished new house then, you will require to buy or appoint a carpenter to make your home furniture best suitable as per your needs and requirements. You need to be prepared for the cost of furniture such as sofa, bed, almirah, dressing table, dining table with chairs, shoe rack, study table, electrical appliances, etc… depending on your needs.

7) Additional charges in flat

Now, these costs are subjective, it depends on the needs of a family. These additional costs include a video security system and iron grill at the main entrance for security purposes, pigeon net if your new house is having open balconies and mosquito net for windows, etc.

8) Sinking Fund

Sinking fund is a cost, which you may need to pay, to the society you will be living in, every year for a certain period of time such as  5 to 10 years. These charges are paid by all the house owners in the society, so that society’s huge maintenance cost, which can be for Lift maintenance charges, Building painting, clubhouse renovation, parking space, and building renovation charges, etc.

For example, if the lift of your building is not working and it requires 10 Lakhs to get repaired then it will be made from the sinking fund collected by society.

9) Small house alteration

Now, this cost again is subjective, it may change from person to person. Many people want to make some changes in the existing layout of the new house before moving. So, they will be needing extra money for this. Examples of small alterations are changes according to Vastu Shastra & creating storage space (storage room or shelf) etc.

10) Packers and Movers Charges

Moving your home stuff from one place to another can also cost a bit, especially if its an inter-city move. Do consider this cost as well when you are buying a new house.

Conclusion

For many of us buying a house is like achieving a huge milestone in our lives. When we plan our savings and investments according to, not only for the cost of the property but, also for other additional expenses to be incurred, then we will have more clarity & avoid the burden of so many expenses before buying our dream home.

And I would say around 10 – 20% of your house cost, should be kept aside to meet all these expenses. eg. if you are planning to buy a house of Rs. 50 Lac then additional 5 – 10 Lac has to be taken into consideration.

If anyone in your circle of friends and family is planning to buy a house, let them know about these additional costs. And also, if I have missed some points so please add in the comment section.

New Airlines Charter – 6 important rules every passenger should know

Posted on by Team Jagoinvestor

In the last few years, the complaints from airline passengers have gone up with respect to issues like flights cancellations, loss of baggage and delays. Most of the times, the passengers find themselves with no help and bad attitude from airlines staff and the company itself.

Last month, I was travelling from Ahmedabad to Pune and my flight was scheduled to leave at 10:30 pm in night. However, the flight was delayed. First, it showed 30 min delay, and soon it stretched to 2.5 hours.

I along with many other passengers had no information about the delay. I also heard a passenger murmuring – “Will they provide us snacks?” after a 2-hour delay.

This made me think if an average airline passenger is aware about his/her rights in case of flight delay, cancellations or baggage loss?

Rights of airline passengers in case of flight delay, cancellation and baggage loss

Few months back, on 28th Feb 2019, a new airline passenger charger was announced by The Ministry of Civil Aviation which clearly defines the rights of travelers and liabilities of airlines that are operating in the domestic sector. It defines various important points and a guideline for passengers seeking redressal of their grievances, with regards to fares, flights, refunds, catering, and baggage, etc.

Before we start looking at all points, first as a passenger you should know various reasons why a flight gets cancelled or there is a delay! or for what matter a baggage is lost.

  • Due to unoccupied seats to save their cost
  • Due to overbookings
  • Mechanical Issue
  • Technical Issue (server crash, system failure)
  • Natural Disasters like flood, cyclone, Earthquake etc.
  • Bad weather conditions
  • Political Disturbance/ Government regulations/ Civil War/ Strikes
  • Mistakes of Air Traffic Control (ATC)

Now, Let’s look at various rights of airline passengers one by one.

1. Flight Delay

Let’s first look at the delay of flights which is what happens most of the time. If your flight has been delayed beyond a limit, the airline will have to offer you refreshments and free meals (for passengers waiting at the airport). The table below defines this.

[su_table alternate=”no” responsive=”yes” ]

Delayed (Block time) Compensation
2 – 6 hours Refreshments and meals
More than 6 hours Refund of ticket fare or alternate flight
More than 6 hours if scheduled time of flight is between 8 pm-3 am Refund of ticket fare or alternate flight plus Free Hotel Accommodation

[/su_table]

Note: Block time means the total time from the moment an aircraft first moves for the purpose of taking off until the moment it finally comes to arrival gate at the end of the flight. In simple words, it is a total travel time of flight.

2. Cancellation of flight

Flights do get cancelled at times for various reasons like airlines mismanagement, weather conditions or other reasons.

There are two cases here.

Case 1: If the flight cancellation was informed to passenger before 24 hours

In cases where the flight cancellation was communicated to the passenger well in advance (before 24 hours), the airlines have to either arrange for an alternative flight or give full refund to the passenger, as acceptable by passenger.

Previously, airlines used to cancel the flights at the last minute or before few hours of departure and just refunded back the ticket money, which is history now.

Case 2: If the flight cancellation was not informed to passenger before 24 hours

If flight is cancelled within 24 hours of departure (or last-minute) or the passenger misses the connecting flight because the previous flight was delayed (on the same ticket), in that case, the airline has to provide you extra compensation of up to Rs 10,000 apart from full refund or alternate flight.

So imagine you are at the airport (or on the way to airport) and the flight is cancelled. In, this case, you will get 2 things. First is, either of a full refund or an alternate flight option (you can choose any of them) and the second thing is a compensation of up to Rs 10,000 depending on how long was your flight.

[su_table alternate=”no” responsive=”yes”]

Flight travel time (Block time) Additional Compensation (apart from refund or alternate flight)
Upto 1 hour Rs. 5000 or booked one-way basic fare plus airline fuel charge, whichever is less.
1 – 2 hour Rs. 7,500 or booked one-way basic fare plus airline fuel charge, whichever is less.
More than 2 hours Rs. 10,000 or booked one-way basic fare plus airline fuel charge, whichever is less.

[/su_table]

Few Important points

  • If you have checked in already in the airport, the airline has to also provide you with refreshments as per waiting time.
  • You should have provided the contact information at the time of booking, else the airline is not liable to compensate you.
  • You will not be eligible to claim any compensation on delay or cancellation of flight due to reasons which are out of control of airlines like bad weather, political unrest, a natural disaster or labour disputes.
  • Airlines are not supposed to give compensation parts if the delays or cancellations happen because of security risks, air traffic controller or metrological conditions.

3. Boarding denied due to overbooking

Many times, airlines overbook the tickets in assumption that some passengers will not turn up or cancel at last minute if that happens and you are denied boarding the airplane then you can claim as follows if you have confirmed ticket,

Scenario # 1: If the airline arranges for an alternative flight within 1 hour of the scheduled departure of the original ticket, in that case, you can’t claim any compensation.

else

Scenario # 2: If an airline is not able to arrange for an alternative flight within 1 hour of the scheduled departure of original ticket, in that case, you are liable to get any of following 3 things

  • 200% of booked one-way base-price + airline fuel charge, up to maximum of Rs 10,000 if the airline arranges for an alternate flight up to 24 hours from old scheduled departure
  • 400% of booked one-way base-price + airline fuel charge, up to maximum of Rs 20,000 if the airline arranges for an alternate flight after 24 hours from old scheduled departure
  • If you do not opt for the alternate flight, in that case, you will get full refund of the ticket price paid + 400% of booked one-way base-price + airline fuel charge, up to maximum of Rs 20,000

If you look at this new rule, it does a great justice to the passengers as the passengers had to spend a lot of money on book alternative flights at the last minute. Now the compensation is fair which helps passengers.

4. Loss of baggage or damage to baggage

In case of domestic flights, the airline is liable to pay you up to Rs. 350 per kg or up to Rs. 20,000 in case of loss/damage/delay of baggage

In case of international flights, the airline is liable to pay you up to 19 SDR per kg or up to 1131 SDR in case of loss/damage/delay of baggage. SDR here is a kind of currency value which is accepted internationally.

5. Change in the name of the passenger within 24 hours of booking the ticket

Now you can make changes in the ticket (corrections in names of passenger) within 24 hours of booking the ticket. Earlier after booking, any correction in name of passenger was generally denied by airlines and was treated as cancellation. This will give relief to customers as at times there are name mistakes in tickets or change of plans.

6. Cancellation of ticket

Case #1 – If tickets are cancelled within 24 hours of booking tickets

Earlier, canceling a ticket cost the passengers a huge penalty even if it was done immediately after booking the ticket. But with the new rules, if the ticket is cancelled within 24 hours of booking (provided there is a more than 7 days difference between booking date and departure date) then you will not be charged any additional charges.

Case #2 – If tickets are cancelled after 24 hours of booking tickets

In this case, following is the rule

  • Airlines cannot put any cancellation charges for cancelling the tickets.
  • Airlines should refund all statutory taxes, user development fees, airport development fees, passenger service fees to you
  • Airlines can’t hold the refund in terms of credits forcefully. It’s not a default option now, however, if passenger agrees to it, it can be done
  • Airlines have to clearly indicate the refund amount in case of cancellation in future.

DGCA has defined rules of refund and claim settlement for all airlines. If you have paid cash for your booking then you will receive the refund & compensation in cash at the counter. And if you have made payment via credit or debit card then the amount will be credited in your bank account within seven days.

Escalation of complaints

You can use Air Sewa, a grievance redressal system to take help on any issue related to civil aviation in India. We hope that these changes in the airlines’ rules will now help passengers a lot and will make things fair for them.

Do let us know if you have any queries, we will solve it in the comments section.

Detailed Guide to Pradhan Mantri Awas Yojana (PMAY) scheme

Posted on by Team Jagoinvestor

Have you dreamed of your own house? Are you planning to buy your first house?

But, buying own house is not possible without taking loans and paying heavy EMI’s. However, now it is quite possible for new home buyers with subsidized loan given under “Pradhan Mantri Awas Yojana” which is an initiative by government under “Affordable Housing for all by 2022” in the country. It is also referred as credit linked subsidy.

With this scheme you can buy a new home/flat, construct a house or you can enhance your home by adding room, toilet or kitchen. Till date 15 Lakhs house has been constructed and 75 Lakhs loans has been sectioned under this scheme. The overall structure of the scheme is not easy to understand. So, let’s understand all the elements in simple points.

1. Who can opt for PMAY?

  • A First time home buyer, who does not have any home on his name or in name of any family member.
  • He or his family should not have availed any central assistance under any housing scheme of government.
  • An individual who has a pucca house and wants to enhance it by adding toilet, room or kitchen etc.

Family includes Self, Spouse and Children. But, if daughter/son is earning adults(irrespective of marital status), than he/she will be treated as a separate entity. So, this means even if parents and earning children are staying in a house owned by parents, they can individually opt for PMAY provided he/she doesn’t have nay house own name.

2. What will be the eligibility and subsidy?

Government has categorized different groups taking their annual earning in to consideration, which will be helpful in evaluating eligibility and amount of subsidy. Following table shows different groups and other criteria.

[su_table responsive=”yes” alternate=”no”]

Groups Annual Income Maximum loan amount for subsidy Interest rate for subsidy Maximum Subsidy Amount Allowed Area
Economically Weaker   Section (EWS) Upto Rs. 3 Lakhs Upto Rs. 6 Lakhs 6.50% Rs. 2.60 Lakhs 30 sq. mt. (322.917 sq. ft.)
Low Income Group (LIG) Rs. 3-6 Lakhs Upto Rs. 6 Lakhs 6.50% Rs. 2.60 Lakhs 60 sq. mt. (645.834 sq. ft.)
Middle Income   Group-1 (MIG 1) Rs. 6-12 Lakhs Upto Rs. 9 Lakhs 4% Rs. 2.35 Lakhs 160 sq. mt. (1722 sq. ft.)
Middle Income   Group-2 (MIG 2) Rs. 12-18 Lakhs Upto Rs. 12 Lakhs 3% Rs. 2.30 Lakhs 200 sq. mt. (2152.78 sq. ft.)

[/su_table]

*1 sq mt = 10.7639 sq ft

*Maximum term allowed for subsidy is 20 years for all the 4 groups. That means subsidy will be calculated for the term of loan or 20 years whichever is less.

*Interest portion of EMI at subsidized rate will be discounted at 9% to get the net present value of subsidy.

Let’s understand the above table through case studies-

1. If your annual earning is Rs. 3,00,000 and you have taken home loan of Rs. 10 Lakhs for 15 years at 8.50% interest p.a. So, what will be the subsidy amount?

As your earning is Rs. 3 Lakhs, you fall in EWS group. So, You will get 6.5% of interest subsidy on Rs. 6 Lakhs of loan for term of 15 years provided the house area is not exceeding limit of carpet area of 30 sq. mt. The amount of subsidy will be Rs. 2.09 Lakhs (Back calculation – considering EMI at 6.5% on loan amount of Rs. 6 Lakhs for 15 years and interest portion out of it discounted at 9% to get NPV).

2. If your annual earning is Rs.8,00,000 and you have taken home loan of Rs. 20 Lakhs for 25 years at 8.50% interest p.a. So, what will be the subsidy amount?

As your earning is Rs. 8 Lakhs, you fall in EWS group. So, You will get 4% of interest subsidy on Rs.9 Lakhs of loan for term of 20 years and not 25 years (as maximum term is 20 years)  provided the house area is not exceeding limit of carpet area of 160 sq. mt. The amount of subsidy will be Rs. 2.35 Lakhs (Back calculation – considering EMI at 4% on loan amount of Rs. 9 Lakhs for 20 years and interest portion out of it discounted at 9% to get NPV).

You can refer the video given below to understand PMAY –

3. Will subsidy be given for existing home loan?

The subsidy under this scheme can be availed on existing home loans sanctioned on or after 17/06/2015 for EWC section and LIG section. And for MIG 1 & MIG 2 subsidy can be availed if loan is section on or after 01/01/2017.

So, if you have an on going home loan which you received in 2017. In that case also you can apply under PMAY to avail subsidy. And the amount of subsidy will be calculated as per your current income earning section i.e. if now you are earning 10 Lakhs then you will fall under MIG 1 and original term of loan will be taken in to consideration.

4. How to enroll to avail benefits under this scheme ?

You can enroll for this scheme online or offline. In offline mode you need to visit the bank from where you want to apply loan or where your home loan is existing, get the form of PMAY and fill & submit the same.

For the online mode you need to follow following steps –

Step 1#: Go to the website of PMAY. Below given page will appear –

proceedure for enrolling under PMAY scheme

Step 2#: Click the citizen assessment drop-down and select the benefits under three components as shown below.

pradhan mantri awas yojana citizen assessment

 

Step 3#: Once you click the benefit under other 3 components, the below window appears. Now enter your Aadhaar details and or virtual ID and click on check.

pradhan mantri awas yojana check aadhar existence

Step 4#: Once you check your Aadhaar card existence, the below page will appear. Fill the form with required details. To give you a glimpse, screenshot is attached.

information of beneficiary being covered under PMAY slum development

Step 5# Attach required documents

documents required for loan under PMAY scheme

Once your application is submitted, after due examination if you are a eligible beneficiary under PMAY, you will be added to the list of beneficiary. You can find it on the website of PMAY in beneficiary tab. If your name comes in beneficiary list then you need to inform about the same to the bank from where you have granted loan.

5. How will I receive the interest subsidy benefit under PMAY Scheme?

The Bank (where you have applied for a loan under this scheme) will claim subsidy benefit for eligible borrowers from National Housing Bank (NHB). The NHB will conduct due diligence to exclude claims where the customer has submitted multiple requests. Then all the eligible borrowers will receive the subsidy amount to the Bank.

Once the Bank receives the interest subsidy, it will be credited upfront to the loan account. Therefore it is called credit linked subsidy. For example, If the you avails a loan for Rs. 8 lakh and the subsidy received is Rs. 2, 20,000. The subsidy amount (Rs. 2, 20,000) would be reduced upfront from the loan amount (i.e., the loan would reduce to Rs. 5, 80,000) and then you would pay EMIs on the reduced amount of Rs. 5, 80,000.

And also in case your EMI is on going and you are eligible for subsidy. Then you may be offered by your bank for using subsidy as credit so your EMI will be reduced or for reducing the term of loan. I would suggest to go with reducing term of loan.

FAQ OF PMAY SCHEME:

Is woman co-ownership is mandatory for availing subsidy?

Yes, for EWS and LIG class of subsidy woman co-ownership is mandatory whether it be the case of new house or addition of kitchen/toilets etc. And for MIG 1 & MIG 2 it is not compulsory to have a woman co-owner to the house property.

Can I do renovation/up-gradation in an existing house with the help of this scheme? 

Yes, you can if you fall under MIG 1 or MIG 2 section. You can not avail subsidy for renovation if you fall under EWS or LIG.

Is it mandatory to fetch Adhaar card details for all the members of the beneficiary family?

Yes, for processing the subsidy under PMAY for MIG 1 and MIG 2, it is mandatory to furnish the Aadhaar card details of all the family members.

I hope this article has helped you in understanding that how one can avail benefits under PMAY Scheme. Please feel free to ask your doubts or queries the in comment section.

How to do KYC for Mutual Funds? Its quick and easy!

Posted on by Team Jagoinvestor

Are you a new investor in mutual funds ? If yes, then you might be having these questions in mind.

  • What is KYC ?
  • What do I need to do to register my KYC?
  • Whom should I approach?
  • Do I need to do my KYC every time before investing into mutual funds?

So, in this article you will get the answer of all such queries.

CAMS KRA KYC form

CAMS KRA KYC form

What is KYC ?

KYC i.e. Know Your Client is a process required by RBI norms which needs to be completed before starting any investments. It is used as an eligibility test of an investor to prevent illegal activities like money laundering. So, if you are planning to start investing in mutual funds, you need to register your KYC first.

Do I need to do my KYC every time before investing into mutual funds ?

No, as KYC is one time exercise (central process) needs to be done before investing. Once your KYC is registered you need not to undergo same process again while investing with different mutual fund houses.

How can I register my KYC ?

For KYC registration, KYC form has to be filled with all the details and needs to be submitted along with self attested copies of required documents (as discussed below).

Also note, that if you want to invest in mutual funds (Resident or NRI), Click here to know about Jagoinvestor mutual fund services. We also help you in getting your KYC done

From where can I get the KYC form ?

You get get the KYC form via 3 sources:

  1. For this you need to visit the website of CAMS KRA, Karvy or other registrars.
  2. Or you can also visit the website of the fund house where you want to start your investments.
  3. Or you can reach an Independent Financial Advisor.

What documents are required to be attached with KYC form ?

[su_table responsive=”yes” alternate=”no”]

For Resident Indian following documents are required :

  1. Copy of photo ID proof such as Aadhaar, Passport, Voter ID, or Driving license etc.
  2. Copy of address Proof eg. Electricity bill, Aadhaar etc.
  3. Copy of PAN card
  4. Two passport size photos
 For Non-Resident Individuals(NRIs) following documents are required :

  1. Copy of Passport is compulsory
  2. Copy of Overseas Address Proof
  3. Copy of Indian PAN card
  4. Two passport size photos
  5. Copy of other national or Citizenship Identification Number or Taxpayer Identification Number

[/su_table]

Important Points:

  1. POI card needed for POI
  2. In case your overseas address is not in English, you need to get it translated by a translator in your city and get their stamp
  3. In case you do not want to travel to India just for making investments, you can always give POA to someone trusted who can do the process for you.
  4. In person verification is mandatory for true identity verification. So, Fund houses or registrars does IPV via video calls.

Where can I check my KYC status?

Once your KYC form along with required documents is submitted to the registrars(CAMS, Karvy, Sundaram etc.) It will take 4 to 5 days in registration. Once it is registered you can start investing into mutual funds. You will get the  alert about the registration via mail or SMS. However, if you want you can check status of your KYC by entering your PAN in either of the links below:

https://kra.ndml.in/
https://camskra.com/
https://www.karvykra.com
https://www.cvlkra.com/
https://www.nsekra.com/

You can also refer these links for downloading KYC application form.

Conclusion :

For KYC you need not to go anywhere, it can be done from your home. So, if you are planning to start investing in Mutual Funds, KYC is the first step to it. And if you are having any trouble in KYC or while investing, do let us know in the comment section.

NPS (National Pension Scheme) – A beginners Guide for Rules & Benefits

Posted on by Team Jagoinvestor

NPS is one of the most famous and talked about financial products today in our country and it’s quite a detailed and complex product. Today we are doing to talk about NPS in detail and I will try to teach you various aspects related to it.

National Pension Scheme is initiated by the government of India to make sure that in the coming future, more and more people have pensions to support their old age. The core focus of this scheme is to help investors save money for their retirement and also provide a regular income once they retire.

Since NPS was launched a few years back, there have been a number of changes and revisions to this scheme. So, this article will be the guide to NPS and answer to all your queries and confusions.

Flow chart on NPS process

What is NPS?

NPS is referred to as National Pension Scheme or New Pension Scheme. In this scheme, a subscriber can contribute to a pension fund that will be a mix of equity and debt investment. You have to invest in NPS till your retirement and the final corpus will depend on how the pension fund has performed over the years.

At retirement, you can withdraw part of the corpus as a lump sum and the balance will be used to provide you a regular pension till your death (and many other options are there).

Who can invest in NPS?

Earlier only government employees were allowed to invest in NPS, but now anyone (including NRIs) can open the NPS account. The below chart will simplify it.

able-showing-who-is-eligible-to-invest-NPS

Important Point: Entry age for NPS is above 18 years and below 65 years.

Who regulates NPS and manages money invested?

NPS is regulated by PFRDA – Pension Fund Regulatory & Development Authority. The money invested in NPS is managed by Pension Fund Managers (PFM). These are companies that are authorized and appointment by PFRDA to manage the wealth of investors. There are eight PFM right now.

  1. ICICI Prudential Pension Fund
  2. LIC Pension Fund
  3. Kotak Mahindra Pension Fund
  4. Reliance Capital Pension Fund
  5. SBI Pension Fund
  6. UTI Retirement Solutions Pension Fund
  7. HDFC Pension Management Company
  8. Birla Pension Fund

How can you invest in NPS?

The first step is to open an NPS account which can either be Physical or Online. First, let’s see the physical mode of the opening NPS account.

1. Physical Mode – For this, you have to open an NPS account with POP – Point of Presence service providers. POPs are the banks or post office or other non-financial institutions. You can find your POP through this link https://www.npscra.nsdl.co.in

How to Find POP for NPS account opening

There you need to enter your country and location and you will get the list of POP-SPs near you. Select the Point of Presence (POP) where you have an existing relationship – either a savings / current account (in case of Bank) or any other account such as Demat/Mutual Fund/Insurance etc. (in case of non-Bank POPs).

Once you have searched your POP, you need to submit KYC forms along with the NPS registration form to POP and after registration, you with getting a PRAN i.e. Permanent Retirement Account Number. This is a 12 digit unique and portable number issued to all the subscribers.

Important Point: For Government employees, there are NODAL offices where they can get PRAN for the NPS account. Mostly they get it at the time of joining.

2. Online Mode – This mode is simpler than physical. You need to visit the e-NPS website and click on the National Pension Scheme. After clicking you will get 3 options i.e. registration, contribution, and tier-II activation. You need to select Registration.

how to open NPS account online

There you need to select appropriate options, enter your PAN and select your bank/POP. After clicking, continue you will get a registration form, fill the form online, attach the required scanned documents like PAN, address proof and scanned signature. Once it is done your PRAN will be generated and you can start investing in NPS.

Important Point: For online registration, it is mandatory to have a net banking account

What are the investment options in NPS?

Your money in NPS will be invested in 4 asset classes. Which are referred to as ECGA?

  1. E – Equity (High Risk – High Returns)
  2. C – Corporate Bonds (Moderate Risk – Moderate Returns)
  3. G – Government Bonds (Low Risk – Low Returns)
  4. A – Alternative assets like real estate investment trust (REITs) & infrastructural investment trusts (InvIT) (Very High Risk – Moderate Returns)

asset allocation in nps on basis of risk

The choice of asset allocation among these options above will be defined by the subscriber himself (Active mode) or it will be auto defined depending on the age of the subscriber (the older you get, more stable will be your investments). In both options, 75% is the maximum limit for investing in equities and for alternative assets class maximum contribution can be 5%.

What is Tier I and Tier II in NPS?

These are two account types of NPS accounts. Tier I is primary compulsory account for NPS also referred to as “Pension account” whereas Tier II is an optional account commonly referred to as “Investment account”.

Following chart will elaborate the difference between Tier 1 and Tier 2 NPS accounts-

NPS account type tier I tier II differences table

What are the tax benefits of NPS?

  • An employee’s own contribution in NPS will allow tax deduction under section 80CCD(1), up to 10% of salary plus dearness allowance and for self-employed individuals it is 20% of total income in a financial year, but this has to be within the overall ceiling of Rs. 1,50,000 of Section 80C to Section 80CCE of Income Tax Act.
  • An employer’s contribution up to 10% of salary plus dearness allowance is allowed as an exemption from tax under Sec. 80CCD(2)
  • Moreover, individuals can claim an additional deduction of up to Rs 50,000 under Section 80CCD (1B), which is in addition to Rs 1.5 lakh permitted under Section 80C.

The below-given table will simplify this to you –

Table showing Tax deductions on NPS contribution

What are NPS withdrawal rules (Tier I)?

Once an investor retires at 60 yrs., they will get 3 options

Option #1 – Exit from NPS at 60: If you want to exit from NPS at 60 years of age, you will get lump-sum 60% of your corpus and for remaining 40% an annuity will be generated with a PFRDA-registered insurance company(called as Annuity Service Providers) to provide monthly pension after your retirement. There are different annuity plans provided by a few insurance companies, you can choose any of them. And you also have the choice of increasing your annuity contribution (40% is mandatory). However, if the total corpus is 2 lakhs or less than it then the whole amount is given a lump sum.

Option #2 – Continue NPS with contribution till 70 yrs. : You can choose to continue contributing to NPS for more 10 years i.e. up till 70 years. This option is mostly chosen if you are earning after the age of 60. At the age of 70 withdrawal rules will be the same as the exit from NPS at 60.

Option #3 – Continue NPS with till 70 yrs., but without any further contribution: You can choose to not contribute to NPS and wait for your corpus to grow more by 10 years. This option is chosen mostly when you have monthly income flow from somewhere. Thereafter at the age of 70 withdrawal rules will be the same as an exit from NPS at 60. This option has to be exercised 15 days before the default date of withdrawal.

Important Point: Subscriber has to exercise continuation or deferment options 15 days before the date of retirement. Lump-sum withdrawal from NPS is tax-free. Whereas monthly pension will be taxable as per the tax slab of the subscriber.

Withdrawals in Tier II?

There is no limit on tier II withdrawals and all the withdrawals are taxable as per the slab rate of subscriber. It means Tier II works in the same way as Mutual Funds – Investing into Equity/Debt funds and has high Liquidity.

What is the NPS withdrawal procedure?

The withdrawal process starts 6 months before retirement so that pension will be started immediately after retirement. A subscriber can withdraw online or offline.

1. Online Process of pension withdrawal –

A claim ID is generated by a central record-keeping agency, six months before retirement, for which you will be notified via mail or letter. With the help of this ID, the subscriber can check and change his account details like address proof or bank account. Once the withdrawal claim is initiated, no details can be changed. Following is the process of initiating withdrawal –

Step#1 – Login to NPS using PRAN and Password

Step#2 – Go to Exit Withdrawal request and select initiate withdrawal

Step#3 – Select withdrawal type i.e. Exit at 60

Step#4 – Select ratio of Lump sum & Pension

Step#5 – Select One Annuity Service Provider

Step#6 – Verify all details and submit request form

Step#7 – Download request form

Step#8 – Sign and submit the request form to POP or Nodal Office

After 4 working days, lump sum amount will be credited to registered account. For pension all the details will be sent to ASP, once ASP processes all the details, you will start getting pension as per your selected annuity plan.

2. Offline Process of pension withdrawal –

In offline process withdrawal application is to be submitted at POP or NODAL office along with required documents. They will forward them to Central Record Keeping Agency (CRA) and NSDL. CRA will then register your request and issue an application form for withdrawal. Fill in all the details and describe the percentage of lump sum & annuity and select an annuity plan as per your needs. Once your request is processed you will receive the lump sum and pension as per plan selected.

What if I want to early withdraw i.e. before 60 years of age?

As NPS is a purely retirement solution product you should not exit before your age of 60. However, in some special circumstances, you can withdraw 25% in total of your own contribution in NPS. This you can do only after 3 years of investment and just 3 times in the entire tenure of NPS. The special circumstances are –

  • Children’s wedding or higher studies
  • Building/buying a house
  • Critical illness of self/family

Important Point: Partial withdrawal from NPS is tax-free.

What if I want to exit from NPS before 60 years of age?

After 3 years of NPS investment, you can opt for a premature exit from NPS and don’t want to contribute anymore, then you will receive 20% of your corpus as a lump sum and balance 80% will be mandatorily used for annuity fund. You can choose pension payment mode like monthly, half-yearly or yearly.

Important Point: In this case, the lump sum and pension you receive both will be taxable as per income tax slap.

What amount of Pension or annuity I will get?

An annuity is a fixed payment like pension that we get every month, half-yearly or yearly depending upon the chosen model. In NPS 40% of the corpus is invested as an annuity with annuity service providers i.e. PFRDA registered insurance companies.

While creating an annuity plan, the following details are required like,

  • The sector of employment (Government or Private)
  • Date of Birth
  • Gender
  • Marital status
  • Spouse’s Gender
  • Spouse’s Date of Birth
  • NPS corpus amount that you utilize for buying an annuity plan
  • Annuity Frequency

So, on filling all the details as mentioned above you will get the list of annuity plans along with the amount of pension that you will receive.

Required details for pension plans in nps

Other than this, the amount of pension also depends upon followings –

  1. A prevailing interest rate of the annuity: The Interest rate on annuity will be the same as government securities, ranging from 6% to 8%.
  2. Annuity Plan that you choose: There are different annuity plans provided by ASP. Here are some generic annuity options offered by ASPs. Remember, some ASPs may offer a slightly different or combination of these options:

Table on Annuity plans showing different plans of LIC with amount of pension

You can go to the NPS trust website to get the calculations on how much pension you will get.

Who is the Annuity Service Providers?

Following are the PFRDA – registered ASPs –

  1. Life Insurance Corporation of India (LIC)
  2. SBI Life Insurance
  3. ICICI Prudential Life Insurance
  4. Bajaj Allianz Life Insurance
  5. Star Union Dai-ichi Life Insurance
  6. Reliance Life Insurance
  7. HDFC Standard Life Insurance

What is the result of NPS fund performance till now?

Following tables will show a return of pension funds in the last 5 years –

Table showing returns on NPS fund Asset class ETable showing returns on NPS fund Asset class C

Table showing returns on NPS fund Asset class GTable showing returns on NPS fund Asset class A

NPS vs Mutual Funds (ELSS) and Fixed Deposits / PPF/ EPF

Here is a small comparison between NPS with other investment options like ELSS mutual funds, FD, EPF, and PPF. The below-given table will show the difference between NPS and other Tax Saving investment options –

There is also an app for NPS to provide more convenience to its subscribers. Do let us know if you have any queries regarding NPS. It was quite an exhaustive article, hence there might be something we might have missed.

Should you buy car insurance from dealer?

Posted on by Team Jagoinvestor

Myth: As car insurance is mandatory, I have to buy it via car dealer !!

Reality: It is mandatory to have valid car insurance but, not mandatory to buy the same from your car dealer.

image on buying car insurance via dealer

Buying car insurance is mandatory under the motor vehicle act, 1988. As it is mandatory car dealers bundle up insurance with other services and quote it all to you in one invoice. But, insurance can be separated and you can choose an insurance company on your own. Most of the people buy it via a dealer, either because they are unaware of separating insurance from car purchase cost or they just seek convenience as getting it via dealer is much easier and convenient.

But, now the time has changed. With the help of the internet, it has become very easy to compare different insurance plans online and buy the best suitable as per your requirements. So, no question of hassling in the lengthy paper process. It is not like you should never buy car insurance via a dealer, there are disadvantages as well as advantages.

Advantages of buying car insurance from a dealer :

No doubt the process of buying insurance from a car dealer certainly saves you a lot of time. And there are a few more advantages of buying it via dealer:

  • The entire process of insurance purchase is streamlined and more convenient when it is through a dealer.
  • You may receive bundling discounts on the purchase of the car and the insurance from the car dealer.
  • You can get in touch with the car dealer to get clarification on the coverage or at the time of claims. The dealer will efficiently assist you in such matters.

Disadvantages of buying car insurance from a dealer :

A very limited number of options: A dealer is there to sell the car and not insurance. So, he won’t be able to offer you too many options when it comes to insurance. If he has a tie-up with two or three insurance companies, so he will be able to offer policies only by those companies. And this will limit you from selecting the best option that you can avail by doing your own research.

Premiums can cost more: As buying car insurance via dealer will be offline so it’s very obvious that it will be costlier than what you can get from online mode. In spite of this, car dealers enter into tie-ups and arrangements with insurance companies for which they get the commission, which can go as high as 40%. This will have an impact on the policy price, and for you, this can translate into high premiums.

Add-ons offered may not fit your requirement: Car insurance add-ons must be chosen keeping in mind the specific requirements of the car and its owner. As car insurance premium is recurring cost, to attract more buyers, a dealer may provide you basic insurance plan which will be cheap but, even then if you compare the premium of the same plan online you will find it cheaper, eg. if insurance via dealer costs Rs. 25000, it will cost Rs. 15000 if bought online. (40% costlier).

The main intention of the car dealer is to earn extra by bundling up all for you in one basket. As insurance is the basic requirement for every car buyer, he may influence you to take insurance from him, which may be very basic insurance not having important add-ons required.

It must be noted that add-ons are extra covers that can be opted to enhance the protection offered by a basic car insurance plan. Knowledge about what add-ons are suitable is important. Few essential add-ons that can be included to the base plan are:

  1. #Zero or Nil Depreciation: This add-on offers complete coverage without factoring in the depreciation of parts like plastic, fiber, rubber, and glass.
  2. #Engine Protection Cover: This add-on cover provides protection against damage to the car’s engine due to water ingression leading to hydro-static lock.
  3. #Roadside Assistance Cover: This add-on provides emergency roadside assistance services such as help in changing the flat tyre, roadside repairs, emergency fuel refilling and towing facility.
  4. #Return to Invoice: This add-on ensures that in the event of complete loss or theft of a car, the policyholder gets the car’s original invoice value and not just the Insured declared value.

So, it’s suggested that you should go for an insurance policy which should provide extra coverage to your car, by allowing you to customize it as per your needs.

Final Word :

Who doesn’t want ease and convenience? When we buy a car, we feel like ending up all the proceeding in one place. However, if you are internet savvy, hassle in buying insurance is not a question for you.

75% of EPF can be withdrawn just after a month of unemployment

Posted on by Team Jagoinvestor

EPF is a long term retirement saving scheme. Therefore, it can be withdrawn fully(100%) only after retirement. And early retirement is not considered until the person reaches 55 years of age. However, if you get unemployed for a period of not less than 2 months, then as per the old rule of section 69(2) of the EPF act, you can withdraw 100% of EPF balance outstanding in your account.

Now, EPFO has made the Employee Provident Fund withdrawal rules more flexible for cases of job loss and inserted a new rule under section 68HH.

EPF withdrawal rules old v/s new comparison

A new clause, 68HH has been inserted after para 68H in the 1952 EPF act

As per this, If a person has been unemployed for a period of not less 1 month can withdraw upto 75% of EPF balance outstanding in his account as on date. The section says that, even after such withdrawal is made, the person shall remain part of the EPF and eligible for pension benefits. However, the advance cannot be remitted back into the EPF i.e. it will be non-refundable.

In addition to this, the circular clearly states that para 69(2) (old rule) is still continuing. That means, after two months of continuous unemployment, 100% of EPF withdrawal is allowed. However, the waiting period of 2 months does not apply in cases of woman retiring from services for the purpose of getting married. The snapshot of circular is given below,

snapshot of circular of section 68HH of EPF

Do you think this small change in the rule of EFP withdrawal, would be beneficial on a larger scale?? Let us know your views in the comment section.

How to earn 25,000 as an extra-income (while keeping your day-job) in 3 simple steps

Posted on by Team Jagoinvestor

Here is a guest post from Zubin Ajmera from Progress & Win (detailed bio at the end) .. He would like to share his insights on creating extra income while you are at job.. Over to him.

–

If I have to tell you the latest trends and fantasies of Indians these days, it would be 4 things :-

  1. Going on dating apps (“Forget Tinder, did you check out this new app?”)
  2. Trying a new restaurant (“We should really go to this new cafe opened last month, they serve the most delicious desserts”)
  3. Watching the latest movie (Robot 2.0?), or the new series on Netflix (“Did you watch Sacred Games, or Narcos?”). I mean, look at this craziness
  4. Starting a business (“Sometimes, I feel my manager doesn’t understand it! I just want to quit my job and start something of my own!”)

Today, I want to talk about the 4th — starting a side business. And it’s funny because the moment I tell this, the instant choleric reaction is:-

  • “Uhh, I’m already occupied with so many things. I don’t have enough time”
  • “Business?? I don’t even know where to start from”
  • “Why will anyone pay me? I’m not an expert”
  • “I’ve an idea in mind, but not sure if it will work!”

I call these Mental Scripts, these are some of the barriers you have in your head when starting anything new.

I don’t necessarily blame anyone for this. The fact is, we live in this “startup ecosystem” where you’ll come across hundreds of sites talking about technology, ecommerce, and mostly hear words like — “funding, investors, seed round A, renting office space, hiring”, etc.

I want to tell you that all of that is possible, but you CAN take a different route. A different route might mean –

  • Starting a tiny business while still working at your day job (so eventually you’ve an option to quit your job)
  • Working on something you’re interested in or deeply care about. For eg: I love to research and spend on perfumes. My weird dream is to start a business on it someday. Not kidding, just look at my enrapturing expression when I buy a new one online –

The expression after you order your favorite thing on Amazon

  • Creating a second income stream
  • Finding your first paying customer (Apple sold its first iPhone on 29th June, 2007 Flipkart got its first customer in October 2007. Moral for you — It all starts with ONE)

In fact, imagine how life looks like if you have 2 paychecks deposited in your bank account every month. A second income rolling in.

For most of us, the bulk of our fixed income comes from our salary. What if you added one more stream to your income? That one stream might not be equivalent to your salary, but even an extra, say 25,000 — what do you think you can do with that?

  • Pay for petrol or other bills
  • Cover up for rent
  • Buy that extra pair of clothes or shoes
  • Take someone out for a lavish dinner
  • Maybe take a short weekend trip to some new place?

 
Here, I’ll show you what that second stream of income looks for me –

This was from November itself. Each customer worth $50

And let me show you what a business where you’re your own boss looks like for other ordinary people, who are just like you and me –

  • Deepak Kanakaraju teaches digital marketing through his online courses and workshops
  • Sandeep Singh sips a chocolate milkshake at a coffee shop, while he finds/reports online security loopholes for tech and ecommerce companies
  • Karan Batra is a finance expert who provides various tax and finance saving services
  • Ritika Tiwari is a writer, who provides content writing services for many websites and companies

Google all of them, and there are plenty of others who were working professionals and started as beginners. See more examples here.

Is this a dream “not possible”?

No! With a few simple steps, this is achievable. It’s not even a distant dream, you can start earning more in as little as 6 weeks and build a sustainable income — for life.

Let me show you how.

The simple framework to start a side business (in 6 weeks or less)

It boils down to 3 simple steps:-

Step 1: Find an idea

Step 2: Niche it down

Step 3: Get your first 1-3 paying clients

That’s it. I’m not going to throw 100 different things at you (“start a website, buy a domain, get the xyz discount”) to confuse you further.

I’m not even going to use complicated jargons you’ve never heard of, you really don’t need to when you start off.

It’s kind of like when you start working out at the gym. Your goal initially is not to lose 20 kgs, but maybe a tiny goal to lose 5 kgs first.

That’s the goal here as well. To find an idea, test it, and get your initial clients. Do these 3 steps, and boom — you’ve a functioning business.

And the interesting part is all of this is possible while sitting in your office desk….doing your work…on the laptop…..or on a weekend….or coming home after work….or after dinner….just by spending 5-7 hours per week

Let’s go through the details of each.

Step 1: Find an Idea

Tool required: A pen and a paper (do not ask “what fancy tool should I use?” There isn’t)

Time required:  15-20 minutes

You’d be surprised when I tell you this —  80% of my readers face this challenge, which is coming up with an idea.

  • “I don’t have any ideas”
  • “Where should I start from?”
  • “Zubin, I have an idea, but I am not sure if it will work”

It’s kind of like an “excuse” you make to cover up on not taking action. But you also make it sound “correct” in your head, so you think what you’re doing is right.

For eg: “I don’t have enough time” is the most common one you’ll find. Here’s an interesting comment on one of my articles for YourStory – (You can check my full response here btw.)

A big part of starting a side business is internalizing your inner psychology and mindset. (And it’s never about “which domain to pick”, or “what the name of your company should be”)

Let me show you 2 simple techniques to come up with atleast 10 different ideas in under 15 minutes. I’ve used them and I still do, many of my readers have, and it continues to work.

One quick caveat is to stop censoring yourself as you go through this process. No telling yourself “I can’t do this”, “I’ll do this some other day maybe”

Much of this is about creativity, testing, taking action, and eventually having fun with it.

Technique #1: The YUS Technique

I call it Your Unbeatable Superpowers (YUS). Each one of us is different. Our story is different — where we come from, experiences we’ve had, people we meet, places we travel, stories we know, food we eat, clothes we wear, etc. This is what makes you unique.

So, how can you monetize these experiences? How do you turn your unique experiences into profit viable ideas?

Answer the key elements below:-

  • Experiences you’ve gained — like learning algebra or studying architecture, finance or consulting, traveling by spending less, doing interior designing
  • Skills you’ve developed — like playing a guitar, working on excel, taking better photos, coding in java
  • Challenges you’ve faced and overcome — like treating foot pain, getting the perfect muscular body, losing weight, learnt to write better
  • Achievements you’ve been awarded for — maybe you got a promotion, or a high MBA score, or bought a car from your own pocket, or stood first in a swimming competition

Write down as many you can think of.

Technique #2: The Detective Hat Technique

I want you to answer these questions –

What would you do on a Sunday morning after your morning breakfast?

You wake up at 10 am (hey, it’s SUNDAY!), spend another 10 minutes on your bed. Brush your teeth. Take a bath. Have your breakfast.

Now after all this, what do you usually do?

Will you go to the gym? Read business websites? Watch cooking videos? Go to a networking event? Arrange your next travel trip?

Write it all down!

What do your friends/family struggle with and ask your help for?

Do they come to you for design advice? Or ask you about finances? Or they need help with planning an event? Learning how to create excel spreadsheets? Advise on what phone/laptop to buy?

Remember, no idea is a bad idea at this stage. I want you to list down EVERYTHING you can think of when using the techniques. You’re not allowed to

  • Chalk out any idea
  • Think “this idea isn’t possible” (How do you know?)
  • Critic yourself (“I am not an expert”)

We’ll remove some of these ideas, don’t worry. I’ll show you how to identify and eliminate the bad ones. But, we’ll address all of these concerns later.

Right now, just put everything on the page.

Great! With using just these 2 techniques, you now have a list of 10-15 potential ideas. (If you also want to see the Book Shelf and The Flight technique to come up with more ideas, check below here.)

Here’s how your list might look like –

This is from one of my readers. A simple exercise, and you already have so many ideas

Awesome! Pat yourself.

Now, I want you to pick one idea. Do not obsess over this. Pick one idea. Do inky-pinky, or something that interests you, or what idea catches your eye when you look at the list, or just ask your mom (she gives the best advice sometimes trust me) — that’s not the point.

The point is to pick 1 idea to test and validate, and move to the next step. A lot of people get stuck at this step alone. Treat this as a system. You simply follow the steps, trust the process — and you will see results.

Step 2: Niche it Down

Tool required: Just your creativity

So, you’ve an idea. Now, let’s determine who can be your potential customer/client.

In marketing, there is a golden rule penned by author Tim Ferris in his book, which goes — “if everyone is your market, then nobody is your market”

Once you have a rough idea, the next step is to identify the person who will pay you. Don’t go after each and every individual you can think of.

Ask yourself – Who is my ideal client?

Bad answer: My ideal client is 18-35 year-old men

Really? An 18-year old college “dude” has almost nothing in common with a 35-year old professional. They are at different stages in their lives, have different goals, their lifestyle is different, and they have completely different mindsets.

GET REALLY SPECIFIC! I cannot emphasize the power of getting super-specific.

Good answer: 30-35 year-old men who are working professionals

Amazing answer: 27-35 year-old men who are working professionals, in the IT industry, living in Mumbai. They typically work in IT, Banking, Finance companies. They are either middle or senior level professionals in their career. They work largely on these xyz softwares, excel spreadsheets, and emails. Most of them are married. They commute either by train or a bus. They spend most of their time on social media (Facebook and LinkedIn.)

I mean, look at that amazing answer above. I love you already!

The more specific you get, better your chances of early success. When thinking of your ideal client, you want to deeply understand :-

  • Age
  • Location
  • Demographics
  • Where do they hang out often?
  • What do they read, watch, listen?
  • Where do they go to solve their problems?
  • Type of industry they are in
  • etc.

Let me walk you through an actual example. Say our idea is — “content writing”

Who is my ideal client? Maybe we come up with –

  • Marketing agencies who require content writers on a part-time basis
  • Authors or bloggers who require for their website or a new book
  • Small scale companies who need for regularly putting out new content for their blog and social media channels

Say we pick the first one — marketing agencies, since the demand for content writers might be more there. Agencies need content writers everyday!

Again, the point I want to emphasize is do not obsess over and over again. Pick one and move to the next step. With a little testing and refinement, you will learn a lot more, than to simply sit and daydream on it.

So, where are we? You’ve an idea — you’ve narrowed it down for a specific market, you know EXACTLY who would be a good target audience for your idea.

Alright, great then, this is a good start!

Step 3: Getting Your First 1-3 Paying Clients

Back in the day, getting a client meant doing some grilling work — months and months of waiting, no response, following up repeatedly, all a dreadful process. Oh, and by the way, how can we forget there was less internet access and penetration!

Today, finding your first paying customers is pretty quick, cheap and easy. Let me show you the cheapest and a free way of getting a client.

Go Direct!

Yes, just go direct — send an email, or meet in-person, or do a direct cold call.

My recommendation: Start with 5-10 emails a week. Can you do that? Don’t answer that, since the answer to that question is “Yes, you can!” So, you better not give me the “I don’t have time excuse!”

With about 30 minutes per day, you should be able to send 10-12 emails (even while watching Netflix on your laptop, OK?).

Let me go one step further and show you an exact word-for-word script to send.

The 5-Point Formula Email Script to Get your First Paying Client

Few things which make this deceptively simple email work like magic –

  • It’s simple and casual (you feel you’re talking to this person friendly. No “sir”, nothing formal)
  • It’s not too short, and not too long, yet it covers all important points —
    • a quick intro
    • services you can offer
    • problems he has
    • benefits to him
    • a call to action
  • Not all of your recipients will respond, but a few will, and that is your road to turning those into paying customers

Once you set the foundation of getting your first client correct (i.e. you know your idea is validated, there is demand for it, you’re getting responses to your emails, etc.) — you can then scale. You can get your next 10 or even 100 clients pretty easily.

Conclusion, and Your Next Step

Unlike other “digital marketing” gurus, who preach overwhelming stuff –

  • “You NEED a website. Here is the 50% discount on the hosting provider”
  • “Just do affiliate marketing” (Blunt truth: you will not see any results for the first 6 months alteast!)
  • “You must have a Facebook page!”

These are the same advises I got, and which you will get too.

Instead, without setting up a website or a facebook page or any fancy bells and whistles, which is all for later, start with this simple 3-step system. I’ve used it, many have, and the best thing about it? IT WORKS!

Forget Black Friday, here’s my “give-me-a-slap-if-it-doesn’t-work” guarantee offer: Apply this proven system, and you WILL see results. If you don’t, I’m open to get slapped (just don’t hit me hard, please!)

About the Author: Zubin Ajmera

After his 5-year stint in USA, Zubin returned back to India. He’s a Content Marketer, Founder of 2 online businesses, and started Progress and Win, a site where he helps working professionals and beginner bloggers start an online side business from scratch, using tested techniques and strategies.

He believes in a strict “no-B.S” approach, has been covered on Entrepreneur India, YourStory, directly worked with 2 authors, 4 CEOs, and featured on multiple other brands.

Procedure to claim life insurance if someone dies

Posted on by Team Jagoinvestor

It is very easy to buy life insurance. You just pay the premium, attach some documents, get your health check-up done and you will become a policyholder. Even nowadays it has become more convenient to buy, as most of them can be bought online.

So, at the time of buying it’s really the fast process but, have you thought that how will your family get the claim settled after your demise? What all will be the steps that they need to take to receive the claim amount?  It is important to have life insurance for your family’s financial security against the risk of your death but what’s more important is, that eventually its benefits must reach the beneficiary.

In this article, we will guide you on what all steps your family members will need to take to get your life insurance sum assured amount so that you can inform them about all the procedures and documents required to get assured life insurance sum.

contact the company and fill the form

What is Life Insurance?

Lets first see what does life insurance means by definition. So, “Life insurance is a contract between an insurance policyholder and an insurer (insurance company), where the insurer promises to pay a designated beneficiary a sum of money in exchange for a premium, upon the death of an insured person.” It means the main purpose is to provide a sum of money to the designated beneficiary (a nominee or legal heirs). So, now let’s see what does your beneficiary need to do to get the claim settled.

Claim settlement Form:

Firstly your family member has to get a claim settlement form from the insurance company and fill all the details. Along with the form he/she needs to attach all the documents along with the form. The list of all the documents required is given below:

  • Original Policy document
  • In the form, it is asked whether a claimant is a nominee or not? If not then the claimant needs to prove that he is a legal heir of the deceased by submitting the “Will” or if there is no will then it has to be proven by Succession laws.
  • If the claimant is a Nominee then Nominee ID proof establishing the relationship between nominee and person who died has to be provided.
  • Notarized death certificate of the policyholder (deceased)
  • In case the death happened in the hospital, document of hospital
  • Copy of claimant’s current address proof

In case of Accidental Death along with the above documents following are to be attached:

  • Hospital certificate
  • Post-mortem Report
  • FIR copy
  • Final report of police
  • Newspaper cutting if any
  • Driving license of the person if the death happened while driving due to the accident
  • In case of death outside India, was the deceased buried or cremated abroad? If yes, enclose a copy of the burial/ cremation permit.

It is very important to keep the acknowledgment slip mentioning all the documents which were submitted because it may be required for compliance of claim settlement.

Settlement of claim

As you now know how to claim, the next question will be how much time will it take to get the money? So, for this read the provisions on claim settlement provided by IRDAI.

As per the regulation 8 of the IRDAI (Policy holder’s Interest) Regulations, 2002, the insurer(company) is obligated to settle a claim within 30 days of receipt of all necessary documents including extra documents sought by the insurer. If the claim requires further investigation, the insurer needs to complete its procedures within 6 months from receiving the written intimation of the claim.

How much time it take your claim to settle

 

List of top 5 insurance company with death claim settlement ratio for the last 5 years – Below given table shows the claim settlement ratio of insurance companies. It is based on the individual death claim number published every year by IRDAI in its Annual Report. LIC  tops the list of death claim settlement ratio for the last 5 years.

top 5 insurance companies death claim of last 5 years

To give you a clearer picture, I have attached the screenshot of top 5 insurance companies during individual death claim settlement within 30 days of intimation.

individual death claim within 30 days of intimation

Where to go if there is a dispute between the claimant and the insurer?

In many cases, life insurance claims have been delayed or denied due to a lack of proper documentation. So, make sure that your claim should not be denied due to this. And even after this claim settlement is delayed then there is a special court called Ombudsman of IRDAI (is a special court) where all claim-related disputes are solved. So if the claimant feels that they are being cheated or the claim is rejected despite submitting all the required documents then the claimant can approach the Ombudsman of IRDAI.

I hope now you are clear with the procedure to claim your settlement. Please feel free to comment about how fruitful this article was.

Apollo Munich Optima Restore Policy – Detailed Review + 13 Benefits

Posted on by Team Jagoinvestor

In this article, we will see various features of Apollo Munich Optima Restore Health Cover policy. We will be covering its benefits, exclusions, eligibility and premiums details.

Apollo Munich is one of the most respected and well known health insurance company in India, which offers different health insurance plans for family, individual and senior citizens. Optima restore is its flagship health insurance plan, which has recently got some more features and we will discuss that in detail.

Let’s start.

Benefits of Apollo Munich Optima Restore policy

Below are the benefits you will get as a policy holder.

Benefit #1 – Restore Benefit

In Apollo Munich Optima Restore policy there is restoration benefit, which means that when you file for a claim in any year and the sum insured (plus the bonus, if any) is totally exhausted, then it will automatically be refilled to the extent of your basic sum insured. So in a way you get the full sum assured benefit again in the same year.

Let’s take an example – Suppose you are having health insurance of Rs. 5 Lakhs per year so, restoration benefit will work as follows –

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Cover Amount Claims made Restoration Benefit
5,00,000 Claimed Rs. 3 Lakhs after 5 months of policy in force Zero – as balance health cover is still there
Balance Left 2,00,000 Claimed Rs. 1.5 Lakhs in next 2 months after first claim (7 months over) Zero – as balance health cover is still there
Balance Left 50,000 Claimed balance Rs. 50,000 in next 1 month after second claim (8 months over) As the whole sum assured is exhausted, the restoration benefit will trigger now and the sum assured now will again be Rs. 5,00,000 – for next 4 months

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So, as per the example, you can again claim up to Rs. 5,00,000 in remaining 4 months of your policy without paying any premium or any charges. If restored sum insured is not utilized in a policy year, it will expire. Note, that the restore benefit is available once in a year and it will be available to all Insured Persons for all claims under In-patient Benefit during the current Policy year.restore benefit of Apollo optima policy

**Restoration benefit is different from recharge benefit offered by different health insurance policies. Recharge benefit says that, your sum insured will be refilled to the amount of basic sum insured, every time when your sum insured amount is utilized for any claim, it does not matter what amount has been reduced from the total amount of sum insured cover.

Benefit #2 – ‘Stay Active’ – Get discount for staying healthy

In order to encourage policyholders to stay healthy, this policy provides stay active benefit which says that, if you walk certain number of steps on daily basis, you will get discount at the time of renewal. Your activity will be tracked on a mobile application provided by them (Health Jinn app). The discount can vary from 2%, 5% or 8% depending on average steps you made during the year.

They have defined the time intervals of 90 days starting from the date of policy to average out total walking steps taken during this period. The year is broken down into 4 parts as follows – 90 days, 91 – 180 days, 181 – 270 days and 271 – 300 days. You can refer following table to understand how this benefit will work –

Apollo Munich Optima Restore stay active benefit table

In year 2 of policy, calculation will be bit complicated but, the point is, if in a year you can manage to have average walking steps of 10,000 and above, you will be able to avail 8% discount on renewal premium, provided that, the mobile app must be downloaded within 30 days of the policy risk start date to avail this benefit.

In an individual policy, the average step count would be calculated per adult member and in a floater policy it would be an average of all adult members covered whereas, dependent children covered either in individual or floater plan will not be considered for calculation of average steps. So, dependent child is not eligible for this benefit.

For this you simply need to download an app called Health Jinn app on your phone, sync it with Google Fit or Apple Health and aim to walk 10,000+ steps every day to earn the complete 8% discount. Walking is one of the most beneficial things one can do for health and fitness. So, you will enjoy discount on premium amount as well as be motivated to exercise regularly.

However, we are not sure how many policy holders will have this level of discipline to track their walking steps and buy all the equipment’s, so in a way it’s a benefit only tech savvy policyholders will be able to enjoy who can also be disciplined for the whole year at the same time.

Benefit #3 – E-opinion (Second Opinion for critical illnesses)

In Apollo Munich optima restore health insurance, if insured is diagnosed with any critical illness (listed in policy) then he will be able to take second opinion from a medical practitioner appointed under penal of medical practitioners. Following illnesses are covered under critical illness –

  • Cancer of Specified Severity
  • Open Chest CABG
  • Myocardial Infarction (First Heart Attack of specific severity)
  • Kidney Failure requiring regular dialysis
  • Major Organ/Bone Marrow Transplant
  • Multiple Sclerosis with Persisting Symptoms
  • Permanent Paralysis of Limbs and Stroke resulting in permanent symptoms

However, this benefit is available only once in a policy year.

Benefit #4 – Preventive Health checkup

We all know that health is wealth but, even after knowing this, we tend to neglect regular health check-ups. In this policy, the health checks costs are included, which in a way gives the policyholder a great push to do their health checkups.

So, in this plan, the policyholder will get the cash reimbursement for taking preventive health checkups.

In Optima restore, for a sum assured of Rs. 5 Lac they provide cash reimbursement at the end of a block of every continuous 2 Policy Years and once a year on the sum assured of Rs.10 Lac or more.

You can refer following to know what amount of cash will be reimbursed –

**Preventive Health Check-up means a package of medical test(s) undertaken for general assessment of health status, it does not include any diagnostic or investigative medical tests for evaluation of illness or a disease.

Note that these checkups are great for people because if you keep doing these checkups, then you will be able to detect any illness or major issue before it becomes critical.

Benefit #5 – Daily cash Benefit

Daily cash is the cash benefit, which you get by the insurance company on a day to day (in case of hospitalization above 24 hrs.) basis, if you have been hospitalized in a shared accommodation in network hospitals of insurance company for more than 48 hours.

This cash benefit is already decided amount irrespective of your actual daily expenses. In this policy, you will get Rs.800 per day as daily cash which has a limit of up to Rs.4, 800.

For example: If “A” and “B” both get admitted to a hospital (both of them are covered under this policy). Suppose A’s daily expenses are Rs.600 per day and B’s expenses are Rs.1000 per day, in this case, though the expenses are different, both of them will get Rs.800 as a daily cash because it is decided previously in their policy.

So here A will save Rs.200 and B has to pay Rs.200 extra from his own pocket per day.

In another case, a person “C” is hospitalized and his daily expenses are Rs.800, but he has to stay there for 7 days. Here the total daily expenses of the person will be Rs.5600 (for 7 days)but as it is mentioned in his policy clearly, he will get only Rs.4800 as daily cash and the rest he has to pay by his own.

However, daily cash benefit is not given for an insured admitted in Intensive care unit. And the limit is higher for higher sum insured i.e. it is Rs. 1000 per day up to Rs. 6000 for sum insured of Rs. 20 Lakhs, 25 Lakhs and 30 Lakhs.

You can watch this video given below to know the plan details of Apollo Munich Optima Restore policy:

Benefit #6 – Multiplier Benefit

There is something called as Multiplier benefit under this policy which gives additional sum assured to policy holder when there is no claim in any given policy year. It is like a bonus included in sum insured amount in case of no claim made during a year.

One can get a bonus of 50% of the basic sum insured for every claim free year, accumulating up to 100%. In the event of a claim, the bonus shall be reduced by 50% of the basic sum insured at the time of renewal. It simply means insurance company will take back benefit of bonus on making any amount of claim.

Example : Suppose you had a policy cover of Rs. 10 Lakhs for a year, but you didn’t claim anything in that year. So, policy sum insured will be increased to Rs. 15 Lakhs (10 Lakh + 50% of 10 lacs). And next year again, if there is no claim then it will be increased to Rs. 20 Lakhs.

But, once you claim any amount against your insurance, then renewal amount of sum insured will be reduced by 5 Lakhs (50% of 10 Lakhs) and it will Rs. 15 Lakhs.

It’s a great thing, because this way you are actually getting upto 20 lacs of health insurance even if you have taken just 10 lacs at the time of buying the policy.

Benefit #8 – Cashless Service

Like most of the policies, there is cashless service in this policy too, which means that the insurance company will make payment directly to the hospital provided it’s within its network and there was prior approval taken for the hospitalization at least 48 hours before.

In case of unplanned or emergency hospitalizations, one can still do all the expense from their end and claim for reimbursement later.

Benefit #9 – Pre and Post hospitalization

Apollo Munich Optima Restore policy covers pre hospitalization expenses up to 60 days immediately before hospitalization and post hospitalization expense of 180 days immediately after hospitalization.

Whenever a person is hospitalized, before that he might have gone through various tests/consultations and even after getting discharge from hospital, he will have to pay bills of medicine and other tests.

Benefit #10 – Organ donor Expenses

When insured is having an organ transplant surgery then all the expense related to that will be paid by insurance company. But it will exclude pre and post hospitalization expense of donor. Provided the undergoing of a transplant must be confirmed by specialist. However, any other expenses incurred by an insured person while donating an organ is NOT covered.

Benefit #11 – Domiciliary Expenses

Apollo Munich Optima Health Restore policy also provides for domiciliary expenses which means medical treatment for an illness/disease/injury which in the normal course would require care and treatment at a hospital but is actually taken while confined at home under any of the following circumstances:

  • The condition of the patient is such that he/she is not in a condition to be removed to a hospital, or
  • The patient takes treatment at home on account of non-availability of room in a hospital.

Benefit #12 – Portability

If you are insured with some other company’s health insurance and want to shift to this policy on renewal, then without starting a new cycle of waiting period, you can shift to this policy. Apollo’s portability policy is customer friendly and aims to achieve the transfer of most of the accrued benefits and makes due allowances for waiting periods etc.

Benefit #13 – Day Care Procedures

This health insurance also provides for Day Care Procedures i.e. Medical treatment or surgical procedure (eg. cataract), which require admission in a Hospital/Day Care Center for stay less than 24 hours. Treatment normally taken on out-patient basis is not included in the scope of this definition.

Indicative list of Day Care Procedures that are covered in this benefit is as follows-

• Cancer Chemotherapy
• Liver biopsy
• Coronary angiography
• Haemodialysis
• Operation of cataract
• Nasal sinus aspiration

Other Rules of the Policy

  1. Maximum Age – The maximum entry age is 65 years, however, there is no maximum cover ceasing age in this policy.
  2. Minimum Age – The minimum entry age is 91 days i.e. children between 91 days and 5 years can be insured provided either parent is getting insured in this policy.
  3. The validity of the policy and Discount – The policy will be valid for a period of 1 to 2 year(s) as opted. If a 2-year policy is chosen then an additional 7.5% discount is offered on the premium
  4. Eligibility for buying the policy – An individual or his family members such as spouse, children, parents/parents-in-law are eligible for buying this cover on an individual or floater basis.

Exclusions – What is not covered in this policy?

  • Any treatment within the first 30 days of cover except any accidental injury.
  • Any Pre-existing diseases/conditions will be covered after a waiting period of 3 years.
  • 2 years exclusion for specific diseases like cataract, hernia, hysterectomy, joint replacement etc.
  • Expenses arising from HIV or AIDS and related diseases.
  • Abuse of intoxicant or a hallucinogenic substance like drugs and alcohol.
  • Pregnancy, dental treatment, external aids, and appliances.
  • Hospitalization due to war or an act of war or due to the nuclear, chemical or biological weapon and radiation of any kind.
  • Non-allopathic treatment, congenital external diseases, mental disorder, cosmetic surgery or
    weight control treatments.

Details of individual policy –

If you are buying health insurance for yourself then following table will be helpful to understand what all benefits you will be having for different amount of sum insured.

details of Apollo Munich optima health insurance policy

Details of a family floater –

If you are buying health insurance for you and your family then following table will be helpful to understand what all benefits you will be having for different amount of sum insured.

Apollo Munich family health insurance policy details

Premium details of individual and family policy:

You can refer below given table to get an idea of the premium amount of this policy. The table shows followings –

  • Premium details of a man aged 30 years for an individual policy.
  • Premium details of a family policy, comprising of an individual (aged 30 yrs.), his wife (aged 30 yrs.), son (aged 8 yrs.) and daughter (aged 10 yrs.). The family policy starts from 5 lakhs of sum assured.

Apollo Munich health insurance premium details

**This is the premium details of 1-year policy including GST and excluding the critical illness cover cost.

Infographic of Apollo optima restore health insurance policy

Conclusion

We feel that overall this policy has all the standard features, however there are many other policies which can also be looked at before making the decision.

If you have any doubts regarding this policy cover, you can leave your query in the comment section.