Category: General

iCare : new online term plan from ICICI Pru

Posted on by Jagoinvestor

ICICI Prudential has launched their new online term plan called “I-Care”, which will replace its old term plan called the “i-Protect” (read iprotect review). This new i-Care term plan has some interesting features like no medical examination till the age of 50 and up to 1.5 crores of sum assured can be taken.

Features of I-Care Term plan

The biggest surprising feature of i-care term plan is that there is no medical examination for customers who are up to 50 yrs old. For all the health related information the company will depend on the declaration made by the customer as there won’t be medical tests applicable. This will make sure that the policy is accepted as soon as possible as there is no medical examination in between. Also there is something called “Policy acceptance” in i-care, which means that once you submit the application online and make the payment, it will be reviewed and finally it will be accepted, after which your insurance coverage will start. Some other features of i-care policy are as follows.

ICare term plan

Additional features

  • There will be high cover available to those people who have active home loan in their name.
  • The premiums once declared will not be increased later, as there is no medical exam later.

Riders in i-care term plan

There is only one rider in i-care term plan just like iProtect had and its accidental death rider. So here are two options one can go for while buying i-care term plan.

iCare Option 1 – Sum Assured

If you take option 1, then you just have a basic sum assured cover which will be paid in case of death. Even if you die in accident you will still get the basic sum assured.

iCare Option 2 – Sum Assured + Accidental Death Benefit

In this option, if one dies due to accident, then the nominee receives extra money equal to sum assured (subject to maximum Rs 50 lacs). This means that; if a person has taken second option with sum assured of 80 lacs, then he will get 80 lacs on death if the death is due to anything other than by way of accident. But if the death is due to accident, then nominee will get Rs 1.3 crores (80 + 50)

Below are the indicative premiums for both the options.
ICare term plan

Note : Please make sure you read the terms and conditions properly (mentioned in the 5th and 6th page of the embedded doc above).

LIC online term plan is coming soon

Posted on by Jagoinvestor

LIC online Term Plan is soon coming to markets ! . There is some good news for all those who would either like to take up a term plan or who are looking to upgrade (increase) their life insurance cover! It is recently disclosed by LIC that Term Plans will be sold online and offline and the premiums will be cheaper than the current rates offered.

LIC online term plan

I personally never thought that LIC would come up with online term plan because of its dependence on agents’ network for selling its products. But this is a good move from LIC as their share of term plan market is eaten away by private insurers from last few years. At the moment, a person has to pay a very high premium for term plan through LIC. For example, the premium for 25 lacs cover with LIC term plan at the moment is around 7,000 – 8,000, whereas it’s around 3,000-3,500 in companies like ICICI iProtect & Kotak e-preferred.

“We are in the process of designing a pure term product which would be sold through both online and through agents,” LIC’s ED- marketing S Roy Chowdhury. “The rates will be lower than what is charged at the moment,” he added.

LIC uses mortality table 1994-96 at the moment

Do you know why LIC premiums are higher? One of the reasons is that they follow old mortality tables which has older death experience ratio. A lot has changed in last 10-15 yrs and we have much better access to health care and lifestyle, which has changed the number of death. Most of the new companies in Life insurance use the latest mortality data but LIC is still using old data and that’s pushing their premiums. Now LIC is planning to revise the mortality rates based on the last 10-15 yrs of experience and hence the premiums would drop down from its current level.

Note that mortality experience are different for different age groups and classes, so it’s not necessary that mortality rates will go down it might happen that mortality rates for age group 25-35 goes up because of the bad lifestyle and new age ailments (stress, junk food, etc). So keep that point in mind. (9 most asked questions about Term Insurance)

How cheap will be LIC online term plan ?

LIC online term plan will be cheaper than the current term plan they offer but expect it to be 15%-25% lower than current premiums. Do not expect a very steep decrease like 50%-60%, because LIC is a very different ball game than other life insurance companies. LIC has accessed in each corner of India and the new online term plan they will launch will be targeted at a very big group and scattered across various cities. It will be offered online and also offline (through agents).

How will this impact Insurance Industry ?

With whatever little I know I can see that urban class will welcome this move with open heart and a lot of people who trusts LIC like anything and even a lot of people who are not big fan of LIC will wait and watch for this online term plan from LIC and would like to go for it only. This move will lead to more sales of LIC term plans in bigger cities and reduce the term plan selling of different other companies (to some extent).

What do you think about LIC online term plan . Are you going for it ? Are you waiting for it ?

Noida Extention Flats in Problem

Posted on by Jagoinvestor

Is your under-construction flatin Noida Extention in danger? No! But there are thousands of buyers who have invested their hard earned money in flats that are being constructed at Noida Extension. In this article I will talk on the issue of Noida Extension and what learnings can we take from this whole issue. For people who are not aware on the recent Supreme Court decision to stop construction in a part of Noida Extension and give it back to farmers from whom it was taken by the Noida Authority in the name of “Land Acquisition”. Now thousands of buyers who booked their flats are in danger of not getting their homes which they had booked.

Background

So the whole issue goes back to 2005-06 when Noida Authority snatched land from farmers saying that the land will be used for “Development” purposes, Industries will be put in, there will be factories which will further help villagers and their future generations get employment and their life will be “great”. They were given pennies for that land. Then later this land was given to Builders for construction purpose and thousands and lacs of investors bought their dream homes in these projects.

The land was under dispute and after a lot of construction has already happened and people have put their hard earned money in lumpsum or through EMI’s. Now Supreme Court says that the land acquisition was illegal and was not done in the right way, so the land now should be given back to farmers. This is only for one part of Noida Extension issue which still affects thousands of buyers and later again there was a judgement passed in favour of farmers for another village.

Now this has given farmers the confidence that even they have a big say in this issue and someone is there to listen to them. All villagers now want a revised compensation at high rates (which I feel is totally right and it should always have been that way) or they want their land back. The builders have already spent crores of rupees in construction buyers have already paid the money for flats or have taken a home loan and paying the EMI. Now if all the land is given back to farmers what will happen to builders and thousands of buyers who bought the homes? Who will bear the loss of the mental agony and financial setback which will come as part of this package?

Recently, the judgement has been postponed till mid Aug 2011, when Allahabad High court will decide on the final judgement for the dozens of villagers land. If it says that the land has to be given back, the situation will get uglier. This whole issue is now engulfing whole of Noida and Greater Noida.

Who is to be blamed ?

Now assuming you have understood the situation, who do you think is the real culprit here? Is it the builders lobby who are known (or I would say secretly known) to manipulate the land acquisition part and then do construction there? Or is it only Noida Authority (read Mayawati Sarkar) and their policies for land acquisition? Or if you allow me to say, is it buyers who didn’t spend too much time to foresee the future of their houses if legal dispute gets uglier later? Who among all took things for granted?

I personally feel that there are two main parties who are really suffering here and those are Farmers and the home buyers. Farmers plight is from long time who are fighting for their rights from years and not even living a life of dignity even after feeding me and you and the whole country. Buyers are those who had spend their life earnings in their dream homes and now are seeing chances of delay, in their dream to own a house. More than financial loss, I see it as a big emotional breakdown. No one is there to hear and address their issues. They are skipping their work and business to give Dharna’s and by showing their outrage in masses.

What do you think is the solution in this case? Do you think incident like these are going to change the way people look at real estate buying? Can this Noida Extension issue teach people to pay more attention in what they are buying?

What do you think about this? Open your heart on comments section and let’s discuss it?

Personal Finance Workshop for IAS batch 2009

Posted on by Jagoinvestor

JagoInvestor did the first workshop on Personal Finance. Guess where? It was at Mussoorie and the audience were 120 IAS officers who graduated last year and are posted at various parts of the country. This workshop was done by Me and Nandish at LBSNAA , Mussoorie .

I would like to thanks Nagarajan, who is our reader and an IAS Officer himself, who invited us for the talk. His stand for his community is commendable and worth appreciation. He took a lot of effort in gathering all the officers, organising the talk and co-ordinating it with us. It won’t have been possible without his involvement and dedication towards Personal Finance.

Jagoinvestor workshop personal Finance for IAS Officers

Offline Workshops in Different cities

We have been collecting data of all those readers who are interested in paying a fee and attending our 1-2 days workshops in their cities, we will now start our offline seminars/workshops starting next month in different cities. We would really like to provide the value in these workshops. If you are interested in attending these workshops and want us to intimate you about fees and content before we do it, please register your details here . You can also fill up the form if you can gather a group of 20+ people .

I would like to hear from you what you think about these offline seminars/workshops, please put your suggestions and expectations in comments section. Note that these seminars would be a 1 or 2 day premium seminar which will take care of lot of your financial life related doubts and also give you a proper direction.

Difference between Gold Saving Funds and Gold ETF ?

Posted on by Jagoinvestor

Today we will see what is the difference between Gold Saving Funds and Gold ETF’s .

The biggest marketing pitch for selling the Gold saving fund is that one can invest in gold funds without a demat account and can set a SIP for the same, which is true.

However, the alternate option of Gold ETF’s doesn’t not allow investments and/or SIPs without a demat account. But most of the agents hide these details of costs and do not educate their clients on how things work!

how to invest in gold

Source : Kotak Website

As of today, Reliance, Kotak and Quantum have launched their Gold Saving Funds of Funds. All of these Gold saving funds are almost same. Lets take an example of Reliance Gold Saving Fund, which is nothing but a fund of funds which invest in their respective Gold ETF’s 🙂 Did you know that?

Difference between Gold Saving Funds and Gold ETF’s ?

Gold ETF’s :

Let’s understand this for a moment. In simple terms, these are financial products which invests in physical gold and tracks its pricing on day to day basis. These ETFs have their own expense ratio which is considered very high if compared to US market, but that’s the price we pay to invest in gold electronically.

You need a demat account to invest in Gold ETF and you can trade these ETFs through stock exchange.

Gold Saving funds

Gold savings funds are nothing but mutual funds which invests majority of its corpus (90%-100%) in Gold ETFs (of the same sister company), a small portion might also be in money market instruments or some short term debt products.

For example –  Quantum Gold Saving Funds of Funds as per its mandate can invest anywhere from 95%-100% in the units of Quantum Gold ETF’s, and rest in money market instruments and other short term debt products.

But the important point you should note here is that the underlying investment is still gold, but not directly! It’s indirectly through gold ETF’s, and now as there are two layers in between, you pay charges two times!

So you pay charges for Gold saving funds and also for gold ETF’s, this part is generally not revealed by the agent who sells you these Gold saving funds. Also for the gold saving funds there are high exit load’s 🙂

Gold Saving Funds

So which one is better and which one you should choose?

We can’t make a general statement that one is good and the other is bad, because it’s not like that. If someone does not have a demat account and wants to automatically invest in gold each month through SIP, gold saving funds are the best option.

But for someone who is conscious about the expenses and can invest through his demat amount each month, Gold ETF’s are a good option.

But high charges will surely hurt in long run! One important point is that do not confuse gold saving funds with “gold mutual funds” which are mutual funds investing in gold mining companies, they are totally different.

Gold Saving Funds

Conclusion

A lot of investors are lured into these gold saving funds without giving any information on the charges, which is not right. Gold saving funds over a long-term can really eat away your returns because the high charges will cut a big pie out of the returns earned.

Which Banks have highest Fixed Deposits interest rates ?

Posted on by Jagoinvestor

Do you know which bank in india has the highest fixed deposits interest rates ? But before that, let me ask you – Do you know what is the interest rate of your Fixed Deposit ? If it was opened a few years back, all you would have got is around 6-8% depending on the bank and tenure. But today its a different scene! . Fixed deposits interest rates are high these days and you can observe one of the other bank announcing fixed deposits interest rates revised each month and in range of 9-10% . I will show you a snapshot of various banks Fixed deposit interest rates with varying tenures.

For simplicity purpose, I have not included tenures of less than 6 months . See the graph below . Green color represents interest rates higher than or equal to 9.25% . Pink represents exact 9% . The banks mentioned in the table below are Tamilnad Mercantile Bank, State Bank of Bikaner and Jaipur, Yes Bank, Karur Vysya Bank, Kotak Mahindra Bank, Catholic Syrian Bank, IDBI Bank, United Bank of India, Lakshmi Vilas Bank, Karnataka Bank, State Bank of Travancore, Corporation Bank, Indian Overseas Bank, City Union Bank, ING Vysya Bank, Indian Bank, Central Bank of India, Federal Bank, State Bank of Mysore, Punjab National Bank, Punjab & Sind Bank, ICICI Bank, Dena Bank, Indusind Bank, Canara Bank, State Bank of Patiala, Syndicate Bank, Barclays, Axis Bank, J & K Bank, State Bank of India (SBI), Union Bank of India, Bank of Baroda, Vijaya Bank, Dhanalakshmi Bank, South Indian Bank, DBS Bank, HDFC Bank, Andhra Bank, UCO Bank, Allahabad Bank, Bank of Maharashtra, Development Credit Bank, Bank of India, HSBC, Citibank , tandard Chartered Bank , RBS Bank and Deutsche Bank . Look at the table below for the indicative interest rates for different tenures.

Fixed Deposit Interest rates in India

Note that a lot of banks offer high interest rates for special tenures like 500 days, or 555 days or 1000 days, but they have some restrictions which people dont know – some of them are

  • Some banks have provision, if rates increased in future, you can not apply for extention at higher rate of interest, instead you have to close that account and apply for new one.
  • Automatic renew not possible.
  • Upon maturity, you will not be able to get overdue interest.
  • Sometimes, you cannot premature close the deposit. however, these conditions vary from bank-to-bank.

Thanks to Lokesh for this information

High level Observations

There are some patterns we can see in area of fixed deposits . here they are

  • Fixed deposits with high interest rates for almost all the tenures are not the heavyweight banks, but the new generation banks, they are Tamil Nad Mercantile Bank, Karur Vyasa Bank, Kotak Mahindra Bank, Lakshmi Vilas Bank and others
  • Most of the banks provide 0.5% higher interest rates for senior citizens if the tenure is more than 1 yr . But if tenure if lower than 1 yr, the interest rates are same for senior citizens also . This is widely true , but some banks like Axis bank , SBI bank , ICICI Bank and HDFC Banks gives 1% higher interest to senior citizens.
  • Most of the foreign banks like Citibank, RBS , Standard Chartered has low-interest rates in range 6-7.5% . This is unattractive during these times when other banks are giving higher rates .

Low and Medium risk appetite investors can cheer

For investors how find themselves not too comfortable with equity and for those who want to park their money for few years without taking any risk and earning some good return in range of 9-10% , Fixed deposits are very good options.

The only point is if you are in high tax bracket, most of the returns will go in tax, but for investors who are in lower tax bracket of 10% or below the permissible limits , they can look for these options without much thought . These fixed deposits were for the year 2011 , but for most part of 2012 also these bank fixed deposits interest rates will be applicable .

Review of moneysights.com – Invest online in Mutual funds

Posted on by Jagoinvestor

What is the equity and debt exposure of your portfolio? How many different companies have you invested in through mutual funds? And do you know of any tool with great UI and simple features that can help you analyse your mutual funds and stocks in detail? If you wondered that there is no such website which can do such analysis and that too for FREE, I am happy to introduce you to moneysights.com. It does it all that for you and much more…

moneysights review

From a few months, I am in touch with moneysight’s team. At that time they were still building their product and were trying to solve some key issues which investors face today and I knew from beginning that users will like their product when it goes live. Just a month or so back when their product was in beta mode, all the Jagoinvestor readers on email (see sidebar for subscription link) received the beta invitation from moneysights and they got a chance to use their tool exclusively and in advance than others.

The reason why I want to know about moneysights is because they aim to solve 3 key problems that is faced by common investors in India. These problems have played a crucial role in ensuring that Mutual Funds & Direct Equity investments remain under-penetrated as fas as mass market retail investors are concerned. I have described these problems below from Mutual Funds point of view –

Problem 1 : Choice & Suitability

There are 4,000+ of Mutual Fund schemes in the India today. If one includes the variations & scheme options like Growth, Dividend, etc. These schemes are broadly classified in 10+ types like Equity, Debt, Balanced, MIPs, ELSS etc. Most of the average retail investors don’t understand or demand so much of choice and option. A large number of schemes not only adds confusion to the decision-making process but also often results in postponing our investment decisions (i.e. taking actions).

If the quantity of schemes in the market is the first problem, then knowing the suitability of the scheme to an individual is another problem to be cleared? Not every scheme is suitable to every type of investor. An ICICI Prudential Discovery or IDFC Premier Equity may have given great returns & hence they command a 5-STAR return rating but how many of us know that both of them primarily invest in stocks which most often may not be Large-cap stable businesses. And hence they may not be suitable for someone who is risk-averse or someone who is just beginning to invest. Wouldn’t investing purely on return ratings may bring-in a surprise to the investor when the markets go into a downward trend?

Problem 2 : Construction of Mutual funds portfolio

Reading my previous posts on how to create a Mutual Fund Portfolio or How many funds are ideal to have in a Portfolio, you would have realized that diversification in the Portfolio is very important. But then, why how does one construct a diversified portfolio of 4-5 different Mutual Fund schemes. There is so much information needed to construct a diversified portfolio that it’s definitely a cumbersome task to construct one manually.

For example having a HDFC Top 200 & a Birla Sun Life Frontline Equity isn’t diversification but duplication. They are 2 similar funds & having both of them doesn’t make sense in a diversified portfolio. Look at this jagoinvestor forum question of mutual funds portfolio review and moneysights helping him.

Problem 3 : Tracking of Mutual funds portfolio

After someone invests in a set of Mutual Funds, is there a way to track, monitor & manage the Portfolio in a seamless manner? Most websites do offer tracking services. But then, again people like Venshu had asked about  how to get annualized returns so as to compare portfolio performance, sector allocation, etc. so that one can get actionable insights to manage the Portfolio on an ongoing basis that minimizes portfolio risks & optimizes returns. I have used their tracking tool myself and it looks simple and good to me.

Some more good features

Some of you who would have registered on moneysights.com may be able to relate to what i’m talking here. However, if you have not tried it yet, let me summarize quickly on what stood out for me –

1. Fund’s Performance Report Card

moneysights review

Moneysights allows you to get more information about a specific mutual fund scheme in a quick & simple way. Just go to the Find Mutual Funds section where you can search or browse for specific Mutual Fund schemes. Opening the detail page of a Mutual Fund scheme like HDFC Equity Fund would allow you to see –

  1. A unique way of portraying Fund’s Performance through Fund’s Performance Report Card – also notice the no-use of financial jargon
  2. Performance Comparison with fund’s benchmark, SENSEX or NIFTY – notice the lack of importance to NAV & prominence to performance chart w.r.t. various benchmarks
  3. Return Comparison with SENSEX, NIFTY, Category Average, etc. in tabular format during different time periods
  4. How much your money would have grown had you chosen to invest in this scheme – notice the actual amount of dividend you would have earned
  5. Mutual Fund Category Performance comparison within different time-frames
  6. Portfolio composition of the scheme in terms of asset class, market capitalization, sector exposure & underlying stocks

So, all the information you require for knowing how good or bad a Mutual Fund scheme is available within a single-page interface.

2. Portfolio Health

Now this is another valuable feature. Many a times, readers have posted questions on forum about specific funds that they have invested in. Questions like shall I stay invested in (say) a Reliance Vision Fund or Sundaram SMILE Fund which probably used to be good performers at some point in time but are not the best ones today. Does it make sense to redeem & divert the investment in some other fund in similar category? Portfolio Health answers this.

Moneysights review

The way I understand moneysights is doing is they find a scheme which belongs to same category as you have & check if there is a scheme which has performed better – i.e. taken lesser risk but has offered more returns. If they are able to find a better option, they show these options. Let me know what you feel about this in comments section.

3. Get a Portfolio

This is going to be useful for readers who want to start their investments from a scratch all over again or re-align their portfolio to their risk appetite. All you have to do is select a risk profile you can identify with & moneysights displays a portfolio of Mutual Funds which is appropriate to the risk profile selected along with how much exposure you should take in a specific scheme. I personally spoke to moneysight’s team & they mentioned that they give more importance to downside protection capability while choosing the funds & portfolio is constructed following best practices of portfolio management that control portfolio concentration risks. They also recommend funds which have proven history of performance & have a minimum AUM under their belt.

Moneysights review
If you play around with this engine you would notice that higher your risk score more is the allocation to Equity. You would also notice that the resulting portfolio is always diversified across schemes, fund houses, sectors & stocks. They also show portfolio’s break-up & its past performance against SENSEX & NIFTY that help you understand why the portfolio is being recommended to you & how it’s good.

Other Small but Significant Features that you may like –

While the above 3 stood out for me, you may also like the many things they do differently like –

  • Letting you enter the amount of Investment & SIP day for accurately tracking your SIP investments.
  • Annualized returns of the schemes you invest in as well as the Portfolio when your investments are more than 1 year old – a very handy feature for readers who have been looking for XIRR returns.
  • Dividends that you may have received for your investments.
  • Updating missed SIP details – You can also update if you missed investing in a specific month for one of your SIPs. Doesn’t it happen sometimes intentionally or unintentionally with us?
  • By allowing you to redeem Mutual Funds partially or fully, they also let you build history of your booked past profits/losses.

Wishlists for moneysights

There are some of the things which I would personally like to see in future releases . They are

  1. An advanced comparision tool which can show the past performance of the current portfolio
  2. Comparision of two or more mutual funds/indexes in much more detail.
  3. I wish if a user can create his own strategies and run it over the portfolio and see how the strategy would preform over long term.
  4. I also wish if there was a download your Portfolio report in xls and PDF format which I can download and keep it for my record from time to time or just offline viewing . That report can give the overall Report in nice format which is just awesome to look at and worth showoff .

Area’s of Improvement

  1. For most of the return analysis and comparision , it can be done only for the last 5 yrs , I hope if it can be maximum possible .
  2. Their UI is great and neat , but I still feel there are much more things on UI than required and some of them can be displayed on demand (on a click) . What do others think ?

Conclusion

To conclude, if you have feel that you can relate to even 1 of the above problems that I mentioned at the beginning of the post, you would agree after using moneysights that it’s an answer to those problems. I would love to know your opinion on this. Please share it in comments section.

How stock scams works in India

Posted on by Jagoinvestor

I will teach you how stock scams work today and for that Let me declare something – “After years of study and hard work, I have come up with a strategy which can predict stock markets movement with almost 100% accuracy. Each month I can tell you which way market will move in next 30 days, it can be UP or DOWN and I can guarantee that. If someone needs to see the performance, I can give a free 6 tips trial.” Now what will be someone’s reaction on hearing this? Most probably, some of you will get excited and interested in getting these free tips, at least to check if I am saying truth or not! . Right now I have a big subscriber base with more than 10,000 people (11.5k to be precise) whom I can reach by email. Let’s see how I can create a stock tip scam –

Stock Scam

Here is how we will build a scenario wherein you are Ajay who is extremely interested in knowing about the tops which are almost 100% accurate. Ajay is bearing some disbelief in his mind, but due to the trust factor in the given tips he thinks ‘Let’s see what tips Manish gives, they are free anyway and by reading his tips I am not losing anything’.

I start sending you exactly one tip each month and it starts this way:

Tip #1 (May) : Markets are headed UP

Reaction  : Markets really went UP in the month of May. Ajay feels good, but still he is confused if its just luck or did It really went up based on my tip . Ajay anyways wanted to just check the tip and how it turns out . He is a bit impressed and he has made up his mind to act upon the tips if 3 consecutive tips work.

Tip #2 (June) : Markets are headed UP

Reaction  : Markets after a bit of volatility finally went up and the tip was a success again! Markets are up by great extent, but Ajay feels like a fool to be so fearful and not act on it. But his confidence has started building up. If the next tip also works, Ajay will invest some money for sure based on the tip!

Tip #3 (July) : Markets are headed DOWN

Reaction : Crash! A huge sell off came in the month of July and the 3rd tip in a row was correct. Ajay starts feeling “Oh my god! Looks like Manish really have come up with something amazing which can predict markets” Ajay makes up his mind to “try” next 3 tips and see how it performs!

Tip #4 (Aug) : Markets are headed UP

Reaction : With all the excitement, Ajay has invested Rs 10,000 in the markets to see if he can make some quick bucks! However, Markets are headed down in the starting of the month and all the TV channels are confirming that next Crash is on the way. Ajay is a bit nervous and secretly praying for the tip to work somehow. He wants market to go UP as per the tip. Everybody around him has already sold off and decided to sell of all the stocks, but you are on the other side. You are praying, literally! And here it comes, markets make a turn up side and it makes one of the sharpest come back in 1 week. Ajay is now in profit and he feels like a winner. Ajay’s confidence in my tips is becoming stronger, but still he is not ready to take BIG risks, he needs to solid confirmation that the tips will fall true no matter what, which is about to come .He will invest 40k in the next tip of mine.

Tip #5 (Sept) : Markets are headed DOWN

Reaction :  Ajay thinks that he should liquidate all the investments in direct stocks and even his mutual funds. His friends do not think alike and suggest him that he should not go with the tip, but Ajay wants to confirm the tips and wants to see the affect on his investments in real time 🙂 Markets move downside and he is now confirmed that there is really some kind of mega-research done by Manish to come up with the tips using his secret-strategy. Ajay can now visualize how he can become a millionaire soon by subscribing to the tips for next 1-2 yrs. He is just can’t wait for the last tip to show its magic!

Tip #6 (Oct) : Markets are headed DOWN

Reaction : Ajay is totally with the tips now and has decided to use this last one to make some quick bucks, he does some short selling and buys some puts options by finding out how to make money in falling markets. With his confidence in the free tips, he does not lose focus and waits for the tips to turn correct. Markets fall as per the tip and due to his decisions, Ajay has made some amazing money this time. He is clear that he wants these tips at any cost now!

Free tips are over now.

Free tips are over now .

Taking money from the targets – How Stock Scams unfold

Tips are over now, Ajay and many others like Ajay has experienced the amazing tips which really worked. They all get a mail after few days from me.

Hi, you might have already got 6 free tips from me each month, we give only one tip each month, but it’s bound to work. It’s based on our strategy which is based on years of research. If you want to continue getting the tips further. It would cost Rs 50,000 for 1 year subscription. You can expect the same accuracy like you saw in last 6 months.

Disclaimer: The tips are highly accurate and we make sure they are accurate, but we can’t promise it and can’t guarantee it legally. Risk is yours

Ajay is so much impressed with my tips performance and so much drowned in greed, that he subscribes to my offer and pays 2 lacs for the secret tips subscription. The tips start coming from next month. But there is some issue this time! . Somehow, not all the tips are working this time. Some tips work, some does not. It’s not at all accurate like it was before. In reality all the tips are just random tips and Ajay is totally frustrated. He has lost a lot of money because he invested big money each time, thinking it would work!

The truth is Ajay fall prey to a stock scam. Now let me share how all this works.

How this scam works

At this moment I have around 10k or more email subscribers and I can send emails to this 10,000 group. I divide this group of 10,000 readers into 2 parts A and B, I send a tip “BUY” to A group and tip “SELL” to B group. One of them will be true for sure. After month is over, I see which tip was correct. If A group was correct, I discard group B and only have people in group A as my final group. This group will be the group which got “correct” tip.

Now I do the same thing again, I divide them in group A and B with 2,500 members each and send “BUY” and “SELL” tip to them. Now again, markets will move UP or DOWN and one of those groups will be right at the end of the month. I again discard the group which got wrong tip. This way I continue doing it for 6 times and at the end I have small group of 156 people who was right all the 6 times and Ajay accidently belonged to his group.

How Tip Scam works

Targets paying for the subscription

Now you can imagine how many people will fall prey to these scams? Even if 20% of the people fall in the trap and are ready to pay Rs 50,00o, it would be Rs 10 lacs in total! Here you can clearly see that out of 10,000 there will always be a group of 156 people who will always get “accurate” tips and the beauty of this strategy is that people who were discarded only get one wrong tip, and after that wrong tip, they don’t get any more tips.

There are many tip providers in real life who claim to give you 90-95% accurate tips with free 1 week trial, If you are getting a lot of right tips, you might be that lucky small group which is their “TARGET” as seen above in the chart. Don’t fall prey to these stock scams. Beware!

Online Term Insurance Plans in India

Posted on by Jagoinvestor

Do you have any idea how many Insurance companies are providing online term plans in India at the moment ? There are total 7 Insurance providers have launched their online term plans and the premiums are highly competitive .

Online Term Insurance Plans in India

Online Term insurance Plan in India

Aegon Religare was the first company to come up with their iTerm plan which was the cheapest term plan of that time , after that ICICI came up with iProtect . There was a huge response for these policies for cheaper premiums , but both the companies didn’t meet the customer service expectations of customers. A lot of readers even on this blog bought policies from Aegon Religare and ICICI , but faced horrible service when it came to getting policies on time , communication with customer care and its officials , mess of documents etc . A lot of readers suggested that they will never recommend other to go for it.

On the other hand there were customers who didnt face any issue and they got their policies on time . They are recommending others to go for it . However their numbers are smaller than those who faced bad experience. Bad customer service is not desirable by any customer , but I think we can see it improving over time with increased competition and with more better processes . Right now seven companies have come up with online term insurance plans and I am sure more companies are in process of launching it soon . I am not sure if LIC would join them in launching the online term plan , because their offline network is so big and dependent on non-term plans

Online Term Insurance Plans in India

How Online term insurance plan works

Step 1 : Offline

You go online and calculate your premium , then you start the process of buying the policy and submit your name, age ,  tenure , sum assured and medical information which affect your premium . After all this you get a premium quote and you pay it online . Most of the people take the premium amount very seriously and believe that its final premium , where as it’s not the case .

Step 2 : Online

After you have paid the premium, there are few things which are yet to be completed . You will get a mail from company or get a call from company that some representative of company will come to your residence and collect the important documents , the documents are also required for KYC . As per your age and given information , the insurer can decide if you will have to appear for medical test or not . If there is anything wrong in medical examination which can affect the premium (increase companies risk of insuring you) , then they can increase the premium (loading) . You can then decide to continue with them by paying the additional premium or cancel the policy .

Update – Apart from Kotak epreffered,  Aviva ilife , Metlife metprotect, ICICI iProtect, IndiaFirst anytime Plan, Aegon Religare iTerm and Future Generali Smart Life there are 3 more online term insurance plans introdued in the market which are HDFC Click2Protect, DLF Pramerica – UProtect and Edelweiss Tokia – Life Protection

Comments ? Do you believe in online term plans ? What can motivate you to buy life term insurance online ?

What is the worst advice that you have ever received?

Posted on by Jagoinvestor

Are free advises costly ? A lot of people in their early life get lots of advice from friends , family and relatives regarding money and other area’s of life . Some of those advises are great, but some are disastrous and you might have the “why did I take that advice ?” kind of feeling . Subra has done a post on worst investment advice and I really liked the sharing which happened there . I think a lot of readers here will relate to those worst advises, because the same thing might have happened to many of them . Lets look at some of the worst advises people have got (i am copying it from the comments section on his blog) . Please share your worst advice in comments section here , It would be worth reading and learning for others !

Worst advice in Personal finance

Ashok say –

Making me buy LICs Jeevan Shree in 2001 (36000 premium per year for 12 years). If I had invested the same 3000/- in a monthly SIP in HDFC Equity fund, I could have afforded a BMW now

Bigtimeloser says –

my worst investment advice was people asking me to do engineering. I had to take it up because i knew nothing about anything else..  Coming from a rural background with a good +2 score I had to do what everybody else was doing..

Iarab says

In 2004, I have been sold a ULIP (Rs. 10,000 annual premium), with an asset allocation of 50% each in ‘Liquid’ and ‘defensive’ schemes. I have been told that ‘liquid’ means ‘money is readily available’ & ‘defensive’ means ‘you will not incur any loss’. The result, after 7 years now, is that I am yet to recover my principal invested (Rs. 70,000), where as my ‘financial advisor(!)’ has graduated from a second hand Bajaj Chetak to Santro i10!

Krish says

One guy from the brokerage firm roped me into F&Os. Rosy picture was portrayed that I can earn thousand(s) a day. The lure was somuch that I borrowed money to trade in F&Os. After first three days I realised that it is gambling and addictive. My risk appetite graph was always up on each passing day to reduce loss and ever hopeful of making the kill. The reality dawn after a month into the trading and losing all the borrowed capital. More than losing money, the mental tension was too much to bear.

Jayant says

“Buy LIC, buy PPF. They are safe investments”. This is when I just started earning at age of 21. If I had started SIP that time, by this time I could have god good corpus. I did not know what seems safe is how badly it is being eaten by Inflation. How I rue !

Vimod says

I have been saddled with a lot of useless endowment policies and whole life plans from LIC of india. I pay a premium of Rs 1.4 lakhs per year as premium for the above insurance policies for a total coverage of Rs 18 lakhs. I will be surrendering
most of it in six months. I try to educate people about buying term insurance policies and not to trust these LIC agents blindly.

Rakesh says

My broker made me buy lokesh machines in Nov,2007. He said that the Big Bull RJ is going to buy/increase his stakes in this company. The price then was 140 and now its 40. I wonder will it even reach that levels ever again ?????????

SS Says

I got an advice to buy a ULIP from a so called friend-expert. What did I do…got rid of advice, got rid of friend (so-called) and got rid of ULIPs forver. i hate ULIps for personal reasons: I lost my friend (i dumped him), I realised he was an idiot and I was in no mood to take free financial advises from an idiot friend (most dangerous thing in finance).

Can you share your worst advice ever you got ?