Category: Knowledge and Concepts

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.

How to quickly check your bank balance without internet on phone?

Posted on by Jagoinvestor

Everyone wants to check bank balance and keep a track on their bank accounts. Smartphone’s, internet and banking system together has made this process easier by providing the facility to check your bank account details online.

But what in case of those people who don’t have a smartphone or internet connection?

Now you can check your bank balance and a few other details of your bank account without internet also.

Check bank balance on mobile without internet

Let’s see 2 methods of checking your bank balance when you do not have internet and also you want the information quick fast.

Method #1: Missed call feature to know your bank balance

This is a very simple process by which you can check bank balance easily without having an internet connection.

How does this process work?

As I said earlier, it is a very simple process which will be completed in just 2 simple steps.

  • Dial the 10 digit mobile number which is allotted to your bank (Select from the list given below.)
  • After 2-3 rings your call will be disconnected and you will receive a message which will show you your bank balance and mini-statement of last 5 transactions.

OR

  • If your number is not registered to the bank, you will get an SMS which will show that your number is not registered with the bank and it will also include details of how to register your mobile number.

Given below is the list of banks and the 10 digit contact numbers which you can use to know your bank balance and mini-statements. You can simply save the related number of your bank in your contacts list and you can easily check your balance anytime.

Public sector banks and their contacts for missed call service:

 

Bank name The contact number for missed call facility
Allahabad Bank 09224150150
Andhra Bank 09223011300
Bank of Baroda 09223011311
Bhartiya Mahila Bank 09212438888
Bank of India 02233598548
Indian Bank 09289592895
IDBI Bank 18008431122
Canara Bank 09289292892
The Central Bank of India 09222250000
State bank of India For balance: 09223766666

For mini-statement: 09223866666
Syndicate Bank 09664552255
Punjab National Bank 18001802222
Union Bank of India 09223009292
UCO Bank 09278792787
Vijaya Bank 18002665555

 

Private sector banks and their contacts for missed call service:

 

Bank Name The contact number for missed call facility
Axis Bank 09225892258
Dhanalaxmi Bank 08067747700
Kotak Mahindra Bank 18002740110
HDFC Bank 18002703333
ICICI Bank 02230256767
Karnataka Bank 18004251445
Yes bank 09840909000

 

Some salient features of this facility are given below:

  1. This facility is completely free for everyone.
  2. To get the benefit of this facility your mobile number should be registered with your bank account.
  3. If you have more than one account, then your latest opened account will be considered as a default account and you will get the details of that account in this facility. However, the default account can be changed.
  4. These features are the same for all banks. However, the process might be different in some of the banks.

Method #2: Know your bank account balance using *99#:

The code *99# is also called as USSD code which is not related to any particular mobile network service providers or any bank. This facility is introduced by NPCI to provide the facility to common people to have an easy access to their bank account.

Below given are the steps to check bank balance using USSD *99#:

  • Dial *99# from your mobile.
  • Select the option of bank balance from the list which will be opened on your screen (which is most probably 3 for all users).

Check bank balance without internet.

 

  • Then enter the 3 letter name of your bank or first 4 letters of your IFSC code.

OR

  • It might ask your UPI pin if you are already registered for that.

Check bank balance without internet.

  • Enter 3 letters of your bank name (for e.g. SBN is the 3 latter name for State bank of India) or first 4 letters of your IFSC code (OR UPI pin).
  • Your account balance will be shown on your screen.

Basic features of *99# service

This facility is a relief for those people who can’t have access to the internet all the time. This unique code has some basic features which you should know if you are going to use it.

The feature of this USSD code is as follows:

  1. This code works without internet.
  2. No hidden charges or roaming charges are applicable on use of this code.
  3. It works across all the GSM service providers on all kinds of mobile handsets.
  4. You can use this code 24/7 including holidays.
  5. No need to download an app or activate any service on your mobile phone.

What kind of services you will get under *99#?

*99# is a USSD based mobile banking facility introduced by NPCI which brings together the two diverse ecosystem partners i.e. Banks and Telecom service providers.

Apart from the balance inquiry this banking system also provides some other facilities which are listed below. Let’s have a look at those facilities.

  • Send Money Using IFSC code and bank account number of the beneficiary.
  • Balance Enquiry
  • Mini Statement
  • Generate or change MPIN or Mobile PIN.
  • Send Money Using Aadhaar number of the beneficiary which must be linked to his bank account.
  • Know your MMID
  • Send Money Using MMID and mobile number of the beneficiary.

The only difference between these two methods of mobile banking is that by using missed call service you can know your bank balance and mini-statement only.

On the other hand, if you go for USSD code service, you can also transfer money from your account to any other account by using his mobile number and MMID OR account number and IFSC code or even Aadhaar number.

Isn’t a very easy way to know your bank balance without any internet connection?

I hope you enjoyed the article. What do you think, is this facility helpful or not? Leave your opinions in the comment section.

How is Rupay card different from Visa or Mastercard?

Posted on by Jagoinvestor

Have you heard about RUPAY cards? Today we will talk to them in detail and how they are different from Visa or MasterCard and if you should choose them or not. But before that, let’s understand the background first.

What is Visa or MasterCard?

You must be already having a debit card or credit card which must be having either VISA or MASTERCARD written on it. Visa and MasterCard are credit card networks with their own systems, rules, and processes for payments, benefits, etc.

However, Visa and MasterCard are both American companies globally accepted and widely used card networks across the world. There are some other card networks also like American Express, Amex, Citi etc, but you got the point. These are global card companies.

Now, these companies do not directly issue a debit or credit card, but various banks across the world offer their cards with payment network operators which can be VISA, MASTERCARD or others.

Rupay debit card

What is Rupay?

Rupay is just another payment network solution like VISA or MASTERCARD, but it’s our own desi version. It’s an Indian company and purely an indigenous product creates by us. Here is what Rupay website says

RuPay is India’s indigenous card scheme created by the National Payments Corporation of India. It was conceived to fulfill RBI’s vision to offer a domestic, open-loop, multilateral system which will allow all Indian banks and financial institutions in India to participate in electronic payments. It is made in India, for every Indian to take them towards a “less cash” society.

RuPay is the first-of-its-kind domestic Debit and Credit Card payment network of India, with wide acceptance at ATMs, POS devices and e-commerce websites across India. It is a highly secure network that protects against anti-phishing. The name, derived from the words ‘Rupee and ‘Payment’, emphasizes that it is India’s very own initiative for Debit and Credit Card payments. It is our answer to international payment networks, expressing pride over our nationality.

RuPay fulfils RBI’s vision of initiating a ‘less cash’ economy. This could be achieved only by encouraging every Indian bank and financial institution to become tech-savvy and engage in offering electronic payments.

Issuing Banks

Presently, RuPay has collaborated with almost 600 international, regional and local banks across the country. Its ten core promoter banks are State Bank of India, Punjab National Bank, Canara Bank, Bank of Baroda, Union Bank of India, Bank of India, ICICI Bank, HDFC Bank, Citibank N. A. and HSBC. It expanded its shareholding in 2016 to 56 banks to bring more banks across sectors under its umbrella.

Rupay cards usage is increasing

Online transactions are increasing day by day in India as we are moving towards a cashless economy and the usage of Rupay cards is also increasing. Here is some data on Rupay online transactions.

Rupay online transactions

Why Rupay was launched?

As we are moving towards becoming one of the major economies of the world, it was very important that we own our own payment solutions like Visa and MasterCard and hence govt started working on Rupay!.

Two more benefits of the Rupay card network are that.

  • The transaction history will not go out of the country if the transaction is within India.
  • The charges that banks have to pay quarterly or monthly to the related companies to enter into the network is very low or NIL.

The image below shows you how a Rs 2,000 transaction charges will be lower in Rupay cards compared to a visa or MasterCard.

transaction charge rupay and visa card

How does any card processing happens?

When you swipe your debit card or make an online payment, your request first goes to the debit card networking and then from there it goes to your bank. After that bank confirms your account balance and then completes the further procedure or transferring payment money to the merchant’s account.

See the image given below to know the procedure of your card.

Debit card processing

Difference between Rupay card and Visa/Master card

Now let’s talk about some differences between Rupay and visa/MasterCard companies. This will give you a fair idea of how they are different from each other on various points.
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Rupay

Visa/MasterCard
Rupay is 100% Indian system Visa/MasterCard are international systems
Lower transaction charges compared to Visa/MasterCard It has higher transaction charges than Rupay Debit Card.
Banks don’t have to pay any fees to enter into the network Banks have to pay fees to join the network
Transaction history remains within the country. Transaction data is shared outside the country as it is an international card
All processing is done within the country so it has a high speed of transactions Here the processing happens at an international level so sometimes it has low transaction speed or errors in server
Some banks shows Rupay credit card on their website but it is not launched officially yet by NPCI. Visa/Master credit cards are available and have a strong network
The usage is very low and not widely accepted as of now Widely Accepted and Used
Can’t be used outside India as of now No restrictions like this

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Transactions limits of Rupay debit card

Rupay cards like any other cards also have transaction limits and ATM withdrawal limits. Here is a quick list if you want to refer them.

[su_table]

Bank Name

Limits (ATM transactions)
Central bank of India Rs 40,000 and Rs 1,00,000
Bank of India Rs 25,000 each
Bank of Baroda Rs 25,000 and Rs 50,000
Vijaya bank Rs.30,000 and Rs.25,000
Punjab national bank Ra.25,000 and Rs.60,000
Oriental bank of commerce Rs.25,000 each
Dena bank Rs.20,000 and RS.25,000
UCO bank Rs.25,000 each

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How to Apply for Rupay card?

If you want to apply for a Rupay debit card, then you must first check with your bank if they have them or not? All the bank accounts under Jan Dhan Yojana already provide you the Rupay card, you don’t need to mention separately in your debit card application if you open an account under this scheme.

Let us know if you need any more information about the Rupay card and we will be happy to answer them in the comments section.

Basic Services Demat Account – a no frills account for small investors

Posted on by Jagoinvestor

Do you hold a Demat account or planning to get one? Then you should know what is a Basic Service Demat Account because it can be helpful for you if you are planning to trade very less and want to save on yearly maintenance charges.

Basic Services Demat account as its name suggests is a basic version of a full-fledged Demat account that provides basic level services. It’s ideal for those whose portfolio size is quite small. We will look at the details in this article. But before that, do you know what is Demat account at the first place?

Features of BSDA Account

What is the Basic Services Demat Account?

Demat or Dematerialized Account means an electronic account that holds various financial securities (especially shares) in an electronic format securely. Demat account is a compulsory account for those who want to buy company stocks from the stock market.

Demat accounts are under the control of SEBI i.e. Security and Exchange Board of India. Now, from 27 August 2012, SEBI has brought a guideline that every Demat provider will have to provide “Basic Demat accounts” available to every beginner in the share market so that it can encourage the people to invest in trading. This will be helpful for achieving wide financial inclusion.

So all those investors, who want to trade less and have a portfolio size of small amounts can open a basic Services Demat Account (BSDA) and save on the annual maintenance charges.

Where to open a Demat account or BSDA account?

You can open your Demat account or BSDA at any bank like SBI, ICICI, HDFC, Kotak Mahindra and many other banks, or with a stock broking companies Angel broking, 5Paisa, Sherkhan, etc. directly. Opening both Demat Account and Basic Service Demat Account is free at both banks and broking companies, but again the AMC varies.

These banks and broking companies provide free services for the first year and from 2nd year onwards they may start to apply charges on the basis of transactions. So before applying for a BSDA or Demat account check for all the details on the website of that particular bank.

How are Basic Services Demat account different?

Basic services Demat Account is a Demat account which can be opened with any Demat Service provider of your choice when your holdings are expected to be below Rs.2,00,000/-.

If we are maintaining holdings of value less then Rs 50,000/- then no annual maintenance will be charged from our account. In case our holdings are between 50,000 to 2,00,000/- then the annual maintenance of Rs. 100 /- will be charged.

In case our holdings exceed 200000/- then our BSDA account will be converted into Regular Demat account. This initiative is to promote retail investment and to promote retail investors to hold securities in Demat form.

Difference between a normal demat account and basic services demat account

How is the value of holding determined?

The DP i.e. Depository Participants will keep calculating the daily closing prices of securities (stocks, mutual fundsetc.) to determine the portfolio size.

This will be calculated after every trading day and then it will be compared with the limits set for your BSDA account. The moment your portfolio value exceeds the limits, you will be charged the fees for the normal Demat account or the slab you fall into on a pro data basis.

Check the video below for more.

Services provided for Basic Service Demat account

Now you must be clear about normal Demat Account and BSDA. Generally, the Basic Service Demat Account provides all the major facilities covered in normal Demat Account. But other that those services, there are few services in BSDA which are a little bit different than normal Demat Account. These services are as given below:

1) Transaction statement:

When your BSDA account is active and balance is maintained then you will get the transaction statement of your account quarterly. But if you don’t have any transactions in a quarter and your no security balance then you will not get the transaction reports or statement.

The statements are available in two forms i.e. electronic and physical document or hard copy. Electronic statements are free of cost; you don’t need to pay any charges for that. But if you want the statement in hard copy then your first two statements will be provided for free of cost and for additional statements you will have to pay the charge which will not exceed Rs.25.

2) Annual holding statement:

One annual holding statement ho holding of the account is sent to the registered address of the account holder. These documents will be sent in physical or electronic form i.e. via e-mail as per the account holder’s choice.

3) SMS Alert:

The account holder should register his mobile number to get the facility of SMS alert. Here you will get SMS for every transaction in your account.

4) Delivery Instruction Slip (DIS):

Two delivery Instruction Slips will be provided to you for free at the time of opening the Basic Services Demat Account.

These are the services which are slightly different in the case of Basic Service Demat Account then normal Demat Account. If you want to read more details about the services and charges of BSDA then you can download the circular by SEBI.

Can I convert my current Demat account into BSDA?

Yes, if you feel you are not making much use of your Demat account or if your portfolio is of less size, you can contact your DP to get your Demat converted to basic services Demat account.

This Basic Services Demat Account is a kind of free account because you don’t need to pay any maintenance charge if your transactions are below Rs.50,000. And Rs.100 only if your transactions are between Rs.50,000 to rs.2,00,000.

I hope you get all the basic details about BSDA. Do let us know if you need more details about the Basic Service Demat Account…..

7 alarming signals that you will not retire RICH in future

Posted on by Jagoinvestor

Will you become RICH in the future?

I know it’s your aim and you want to become rich, but there might be many things you are doing which are increasing your chances of remaining poor or middle class going forward. These are clear indications or signals that you might not become RICH and it’s time to do something about it.

Will you retire Rich or Poor?

I want you to read each point I am going to talk below and check if it’s applicable for you or not. Rather than an intimidating article, I want you to see this article as a wakeup call for yourself and redesign your financial life.

Signal #1 – Your Focus is not on increasing your income

Is your focus on increasing your current income? Do you think about it, fantasize about it and try to take any action? No, it’s fine if you are not succeeding right now, but the main question is – “Is it on the conscious checklist that you need to increase your income?”

Not increasing their income was one of the top most regret of most of the people in our survey

A lot of investors are just going with the flow of life and treat their income increase as fate. They feel they do not have much control over it and hence don’t do anything about it.

Given the way expenses are increasing these days, it’s almost a given that you will not be able to create wealth if you do not work towards an increase in your income.

Signal #2 – You depend too much on credit cards and loans

Are credit cards and personal loans your lifeline?

Are you consuming most of the things like Car, Bike, Vacations, Mobile on EMI? If that’s the case, you are in the EMI trap already and coming out of it is not easy.

Time will keep passing and it will be difficult for you to get out of it. This is a big signal that there is something seriously wrong in your way of life. Other than a home loan and the Education loan, or any emergency personal loan, if you have made taking loans and swiping your credit card every now and then for trivial things, it’s a big signal that you will not end RICH

Signal #3 – You are unable to save anything from last many years

Past performance is not an indicator of future, BUT past indicator is at least signal of what can happen in the future. If you are unable to save much from your salary from the last many years, it’s something to worry about.

There is a great chance that what has happened in past will continue unless you give it a direction yourself.

[clickToTweet tweet=”Once you reach #retirement, your income will stop, but your expenses will not. ” quote=”Once you Retire, your income will stop, but your expenses will not, That’s the reason you should start your retirement planning”]

It’s time to meet a good advisor and work on your financial life. Either you seriously need to work on your income potential or take some drastic steps to reduce your expenses.

There is huge number of investors who think that – “From next year, I will start saving” and this is not happening from the last many years. It’s a signal that you might not get RICH in the coming decades.

Signal #4 – You are already very late in saving

Just because you are late, does not mean that things can’t change now, but the effort you will have to put in will be a lot now. It’s like a game of cricket. If you have to chase a big score and you have lost some wickets before 25 yrs and have not made many runs, now you need to show the extraordinary game to win the match. The run rate required will be quite high.

Let’s take an example of 3 people who started saving at 30 yrs of age, 40 yrs of age and 45 yrs of age and they all want to retire at 60 with Rs 10 crore corpus.

The one who starts saving at 30 yrs, will have to save Rs 35,000 per month throughout his life. However, the one who was late by 10 yrs will have to now save Rs 1.15 lacs, around 3 times more.

And the one who is late by further 5 yrs (at 45 yrs) will have to save Rs 2.25 lacs (almost 7-8 times more).

late investing example

In the same way, in your financial life, if you have lost a good chunk of time already, you will have to save much more and take more risks to reach the goal of wealth creation.

I anyone wants to start their wealth creation, then you can open a FREE mutual fund account with Jagoinvestor.

Signal #5 – Every month-end is a struggle

If every month end a struggle for you financially?

If it’s happening from the last many years, you need to understand that this is not a good sign for the future. You first need to get into a situation, where your month-end is not a struggle, then at the next stage you need to move to a stage where you save some month each month and finally, you need to work towards a situation that you save substantial money each month.

Signal #6 – If your job opportunities are very limited

Are you into a business or a job where it’s very tough to survive to find another job easily? In short, are employed in a sector that does not have enough opportunities? If that’s the case, and if you rank yourself “average”, then you might find it tough to search for other jobs that pay better salaries.

Also if your skillset is limited, your main challenge is of “survival” and that’s not a great aim to have.

Signal #7 – You seek too much “safety” in your investments

Finally, if you are an investor who does not want to take enough risk with their investments, means they just want to get predictable near inflation returns, then it means you are a Fixed deposit or PPF lover. Nothing wrong in that, because it’s your design internally and you have got developed as that kind of investor, but you need to be clear that you are earning only near inflation returns.

Check out the video below where I talk about why investors should avoid fixed deposits for long term investments.

If you invest in FD’s or equivalent products, your corpus will become bigger and bigger in number over the years, but it will not increase your purchasing power. Unless you invest very huge amounts, the corpus you will create will not be enough to be called RICH in the future.

How many signals are present in your financial life?

Out of these signals which we discussed above, how many are true for you? What are your thoughts on the points above? Can you share them in the comments section?

ELSS vs PPF – where to invest for your tax saving? (20 yrs data analysis)

Posted on by Jagoinvestor

Most of the people who want to do tax saving in 80C are confused if they should invest in PPF or ELSS (tax saving mutual funds). Both PPF and ELSS offer taxation benefits of up to Rs 1.5 lacs under sec 80C.

PPF vs ELSS - which one is better to invest?

ELSS vs PPF – Meaning

Let’s start with their meaning and what exactly they are.

PPF means public provident fund. Its a govt scheme which is run by the post office and its a very safe financial product. There is no risk to it because it’s guaranteed by the govt of India. Its quite famous among investors for its safety and assured returns.

On the other hand ELSS (Equity linked saving scheme) is fairly new financial product in India (from last 15 yrs). It’s mainly an equity mutual fund that gives you an income tax benefit. Equity mutual funds mainly invest in stocks of companies, which makes sure that they deliver high returns, but at the same time they are risky (actually volatile) and their returns keep going up and down.

Now, let’s compare PPF and ELSS on various parameters.

#1 – Returns

The returns in PPF change every year and it’s around 7.5-8 %. Right now its 7.8% and it keeps on changing from time to time which is notified by govt. Earlier many years back, PPF returns were in a range of 12% and then it came down to 9%. But from the last few years, it’s hovering around 8%.

In the case of ELSS, it’s linked to the market and the returns are not fixed in the short term. Some years it can be 20 %, some times it can be 50% and in some years it can be -25% also. So you can see that the returns are totally dependent on stock markets and how well they perform. However, in the long term, you can be assured that you will get a return in the range of 12-18%.  The returns are not at all guaranteed by anyone.

#2 – Lock-in Period

Your PPF investments are locked in for 15 yrs, but some partial money can be withdrawn after 7 yrs. So basically its a very long term product, and if you are investing in PPF, you should be ready to lock you money for a very long time. After 15 yrs, you can again extend your PPF for another 5 yrs (any number of times) and your money will again be locked for that 5 yrs.

On the other hand, ELSS has a lock-in for just 3 yrs. You can take out your money after 3 yrs. The important point to note here is that each investment is locked in for 3 yrs, so if you have a SIP running in an ELSS fund, then each installment is locked for 36 months.

So if you want money in 4-5 yrs, ELSS is a better choice compared to PPF from a liquidity point of view.

#3 – RISK

PPF is not at all risky because its value does not go down. PPF is also guaranteed by govt, so there are no changes in fraud. If you plot the graph of your PPF value, you will see a straight line going up. However, note that PPF has a totally different kind of risk, which is that it does not give inflation-adjusted positive returns. This means that its returns match the inflation and in the end, you do not have any net returns.

On the other hand, ELSS is volatile, which is often referred to as “RISK” . The value of ELSSS keeps going up and down depending on the stock market movements. In the short term, you might experience a downturn and loss in value, but over the longer-term, you will see good results.

As most of the investors are risk-averse and do not like to see a dip in the value of their investments, most of the investors stay away from ELSS or stocks in general and lose the chance to experience great returns at the same time.

#4 – Taxation

PPF is tax-free. There is no tax on PPF returns. Whatever returns you get in PPF is 100% tax-exempt.

Earlier ELSS was also tax-exempt after 1 yr, but with budget 2017-2018, now any gains in equity mutual funds or stocks are taxable @10% when you sell them, but you get an exemption of Rs 1 lac per yr. This means that if your profit after selling ELSS is 4 lacs, then you have to pay a 10% tax on 3 lacs. However, even after this taxation, the post-tax returns of ELSS are much better than any other investment option.

Here is an infographic that shows you a quick comparison between PPF and ELSS.

ppf vs elss - where to invest for tax saving under 80C

How to invest in PPF or ELSS?

If you want to invest in the PPF account, you can open a PPF account in a post office or any bank (generally SBI is very famous for PPF). Note that it does not matter where you are opening your PPF account, if you open with the post office, SBI, or ICICI .. at all the places you are going to get the same interest because ultimately it’s controlled by POST OFFICE only.

The banks are just a medium to invest and nothing else.

If you want to invest in ELSS, then you can choose any fund house (there are many AMC like ICICI, HDFC, SBI, Motilal Oswal etc). You can either go to their website directly or contact an advisor (You can also invest in ELSS through Jagoinvestor help)

Returns of ELSS and PPF from the last 20 years

It’s important to check how PPF and ELSS have performed in the last 20 yrs (1996 – 2016) so that you get a fair idea on their performance and which one is better from a long term point of view. So we took one of the famous ELSS (HDFC Tax Saver) as an example along with PPF and calculated how the value in both will increase over time if someone invests Rs 1 lac in both the financial product.

PPF vs ELSS - difference in returns in last 20 years

In the above table, you can see that Rs 1 lac of yearly investment for 20 yrs have accumulated to Rs 54 lacs in PPF, whereas it becomes 2.2 crores in the ELSS, which means that ELSS gave 5 times more returns than PPF.

However, this difference is more visible only after 10 yrs passed and compounding starts kicking in.

In the initial years, there was no big difference in their values. See the graph given below. You will get a clear idea of how ELSS has performed incredibly towards the end of tenure.

elss vs ppf returns in last 20 years

Important Note :

The example of HDFC Tax Saver is taken only for the illustration purpose. This is not a recommendation, and right now HDFC Tax saver is not the best option for tax saving. There are many other ELSS funds which can be chosen other than HDFC Tax saver. Kindly contact your Financial Advisor for any recommendations.

So after studying the table data and graph, I hope it becomes easier for you to know the difference between the returns from PPF and ELSS investments. If you still have any confusion or any doubt in your mind, feel free to ask us by leaving your query in our comment section.

8 Benefits of filing ITR, even when income is below exemption limit

Posted on by Jagoinvestor

Have you filed your income tax return?

Yes /No?

There are many investors who have very low or zero tax liability and therefore they skip filing their income tax return. Then, there are investors who do not file their returns for years and only when something urgent comes up which requires their last few years of ITR, they go to a CA and file their old tax returns.

what are the 8 benefits of filling ITR?

Today, I will share with you why you should file your income tax return, even if you have income below the taxable limit.

Before that, let me share with you what exactly is ITR, for those who are not aware of it.

What is Income Tax Return (ITR) and who should file it?

An Income Tax Return is a form, where a taxpayer discloses details of his/her income, claims applicable deductions and exemptions and taxes that are payable on the taxable income.

As a responsible citizen of India, everyone who has an income should file an ITR, because in this way we are actually declaring all sources of income whether taxable or non-taxable.

The Income Tax Department mandates everyone to file an income tax return if one’s gross total income (before allowing deductions under section 80C to 80U) exceeds Rs. 250,000 in a financial year.

One can also file it even their income is below the taxable limit or its zero (in which case it’s called NIL return). Filing Nil return will act as proof of accumulated funds in your bank accounts or other investments.

Here are the 8 benefits of ITR.

There are various benefits if one files ITR irrespective of their income. Below I have listed a few benefits of filing ITR.

Benefit #1 – Proof of accumulated earnings over the years

It might happen that a person is earning some small income over the years which is below the taxable limit and over the years they accumulate good corpus. Now it may happen that they might get tax scrutiny for some reason after a few years.

If someone has not filed the ITR over the years, it will be a lengthy and tiresome process to explain the sources of earnings over the years. However, with ITR, it will be legal proof of income earned in each year.

Benefit #2 – VISA processing

If you are traveling overseas or planning to travel in the near future, proof of earning is required. If you are salaried than the employer certificate will work but if you are self-employed than income details are needed to be submitted. So, ITR return will work as income-earning proof.

ITR is required as one of the documents for visa application

Benefit #3 – ITR serves as proof of income for Self-employed

Being self-employed does not provide earning proofs such as salary certificate from the employer and form 16. So, having ITR ready with you as proof of income is the most convenient proof.

Benefit #4 – One can Carry forward capital losses

If you have incurred capital losses, the Income Tax Act allows you to carry forward losses for eight consecutive years, and balance it against future gains and income.

To keep a track of your losses, the Income Tax Department has laid out that, Losses for a year cannot be carried forward unless that year’s return has been filed before the due date. So, even if it’s a loss return, you do not have any income to show – do file your return before the due date to declare the capital loss incurred.

Benefit #5 – Helpful for those with very small earnings

There are many people who get some small incomes such as

These people total income might be below the taxable limit and they might feel that they are not supposed to file any tax returns, as they don’t have to pay any tax (because TDS is already deducted). But by filing ITR they will get legal proof of income (in case they need it).

Benefit #6 – Claiming Tax Refund

If you have paid excess tax on your income, then you can file for a refund from the income tax department. In order to get this refund, it is mandatory that you file ITR.

Getting a refund of your taxes feels like getting a paycheck credited. Many salaried people don’t file their ITR as they feel that the tax on their income has already been deducted and they have form 16. But, it might happen that, the employer has paid more tax on your behalf, not taking into consideration your actual house rent, tax-saving investments or insurances. So, in that case, filing of ITR will lead you to ask for a refund from the IT department.

Benefit #7 – Ease of getting loans

If you apply for any loans such as a home loan, car loan, etc., then ITR for the last 2-3 yrs is asked as the mandatory documents. ITR will help your lender to assess your repayment capacity and is an important document. A lot of people who have not filed ITR on time rush at the last minute for these documents, so why not better file it on time?

Benefit #8 – Buying a high life cover

When you buy higher life insurance cover the Insurance company asks for proof of income to assess the cover amount to be provided to you. For this salary slip, bank statements or ITR of the last 3 consecutive assessment years are required.

It might happen that you don’t get a salary receipt or your monthly income is being paid from different groups so bank statements will also not work as strong proof. So, better to have an ITR return filed.

Do you know someone who should file ITR in your circle/family?

I hope the above points will make you understand why it is always preferable to file ITR, even if it might be NIL return. In a lot of families, there are people whose name there are small incomes like dividend income, income from tuition fees, small business income and this article applies.

So make sure you start filing an ITR for them and save yourselves from the future hassles involved.

Do share your views, experiences and ask queries through comments.

Understanding RERA – 14 rules real estate investors should know

Posted on by Team Jagoinvestor

For Long, the real estate sector was unregulated and in favor of builders and developers. From getting delayed possession to bearing a huge loss of project cancellation, all has to be borne by home buyers.

Even in worse case after living in a society for a long period of 10-15 years, homeowners need to vacant the society due to builder’s mistake of not getting approval from government for the said project.

And after all these, for any of these malpractices, if a home buyer files a complaint, it use to take years to get a verdict. However, now to bring transparency and accountability to this sector, Real Estate Regulatory Act, 2016 has come to force.

This aims to create a more equitable and fair transaction between sellers and buyers of properties. The Real Estate (Regulation and Development) Act is expected to ensure consumers will not be cheated or taken for a ride by the developers.

So, we will see in 14 points that how RERA will benefit us. But, before that let’s see all loopholes and malpractices builders and agents use to do in the real estate sector.

  • Delay in project completion
  • Use to cheat buyers with false information
  • Divert funds to another project or for other purpose
  • Get-away with sub-quality construction
  • Offer special pre-booking rates
  • Keeping Date of possession clause in agreement empty
  • Altering the project developments without consent

14 RERA rules investors should know

1. Registering project with RERA :

RERA makes it mandatory for all commercial and residential real estate projects where the land is over 500 square meters, or eight apartments, to register with the Real Estate Regulatory Authority (RERA) for launching a project, in order to provide greater transparency in project-marketing and execution.

The builders or developers have to publish all the details such as sanctioned plan, layouts, the location of the project with clear demarcation of land, carpet area, number and area of garage, etc. So, with RERA builder have to get all the clearance before they could advertise or sell any property, it will help in malpractices to be curbed.

Hence, before entering into the contract, you can check online on the website of RERA about every detail of the project by visit the RERA site of the concerned state and go into the registration tab. I have attached a screenshot of RERA Maharashtra. To get an idea about how RERA MAHARASHTRA REGISTRATION site looks like.

Snapshot of RERA website for registration

If you are offered to buy a property of any unregistered project then you can notify the same to RERA to save others from any kind of fraud.

2. Quarterly updates on Construction progress : 

Now builders/developers have to upload project details including number and types of units sold out, government approval taken or approval pending list & completion scheduled every three months. Along with that if there is any litigation going on related to that property then all the documents of proceedings have to be uploaded by builder/developer. Hence now you can check online the progress of the project they are putting their money in.

3. Escrow Account:

The developer will have to transfer 70 percent of the money received from customers to an escrow account. This will ensure the builder does not spend the money on other projects since they can withdraw money from this account after approvals from engineers and chartered accountants they appoint and your money will be used only for the project you invested.

4. Sale agreement standardization –

Earlier sale agreement use to be in such format that the home buyers were penalized on any default but similar defaults by promoters would not attract any penalty. But, now as per RERA norms, a standard model sale agreement has to be entered between promoters and homebuyers to ensure equality and protect buyers from various penalties and charges.

The agreement of sale shall specify particular details of the project including the construction of buildings and apartments, along with specifications, internal development works and external development works, the date on which the possession of the apartment, plot or building is to be handed over, etc.

5. Maximum 10% of cost of project as advance payment :

The promoter can not accept a sum of more than 10% of the cost of project, plot, etc.. as an advance payment or an application fee from you without first entering into a written agreement for sale with such person and register it.

6. Five years of defect liability period :

Under RERA, in case of any structural defect or poor quality, it will be the responsibility of the developer to rectify such defects for a period of five years. So, if any defect is found in the quality used in the construction of property then you can make the developer/builder liable for all sub-quality issues and ask for repairing or compensating the same.

You can also watch the video on RERA –

7. Carpet Area :

The area of a property is often calculated in three different ways – carpet area, built-up area, and super built-up area. Hence, when it comes to buying a property, this can leads to a lot of disconnect between what home buyer pays and what he actually gets.

But, now it is mandatory for the developers to disclose the size of their apartments, on the basis of carpet area (i.e., the area within four walls). This includes usable spaces, like the kitchen and toilets.

8. Title Representation :

Promoters are required to disclose clear title over the property and project. If any defect is found in title of property then you can ask for the compensation and there is no limit for the amount of this compensation.

9. False information to home buyers :

If you made an advance payment for a project on the basis of any false information given to you via prospectus or in advertisement then you have the right to ask for a refund of your money. And if you want to continue with the project then the builder has to pay penalty and that can go up to 5% of the cost of property.

10. Failure to complete possession on time :

If the promoter fails to complete or is unable to give possession on time then, the promoter is liable to pay the entire amount given by you if you wish to leave the agreement. But, if you wish to stay in the agreement then the promoter will have to pay interest for every month of the delay till you receive the possession.

11. Approval for alteration in sanctioned plans :

If a builder wants to make alteration in plans and specifications of your individual flat then he can do that only with the approval of you. And if a builder wants to make alteration in the entire project’s layout & common areas of society  then he needs approval of the 2/3rd number of total buyers.

12. Obligations of the promoter in case of transfer of real estate project to a 3rd party :

The promoter will not be allowed to transfer the majority rights and liabilities in respect of a real estate project to a 3rd party without the prior written consent from two-third allottees (buyers), except the promoter, and without the prior written approval of the RERA authority.

13. Agent registration is mandatory :

Now, every real estate agent has to register himself under RERA before selling or advertising any property and he has to abide by all rules of regulation like, maintaining books & records, not be involved in unfair trade practices or make any false statement oral or written.

14. Grievance Redressal: :

If any buyer, promoter or agent has any complaints with respect to the project, they can file a complaint with RERA. State real state regulatory department will try to resolve the dispute within 60 days. If you aren’t satisfied with RERA’s decision, a complaint can also be filed with the Appellate Tribunal within the next 60 days. Even after that if he is not pleased the complaint can be filled to high court and supreme court.

Benefits of RERA act 2016 :

This act is not benefiting only buyers but also agents and builders. RERA infuses credibility by making the sector mature & transparent and helping to Channelize investment into the sector. It will increase the confidence of financial institutions & foreign investors in the real estate sector.

Offense-wise penalties for developers :

The following are the penalties and compensation that can be levied on promoters.

[su_table responsive=”yes”]

For non-registration of a project Penalty of up to 10% of the estimated cost of the project.
For violation of other provisions of the Act Penalty of up to 5% of the estimated cost of the project.
For non-compliance of the orders of the Authority Penalty for every day of default, which may cumulatively extend up to 5% of the estimated cost of the project.
For non-compliance of the orders of the Appellate Tribunal Penalty for every day of default, which may cumulatively extend up to 10% of the estimated cost of the project or with imprisonment for a term which may extend up to three years or both.

[/su_table]

Offense-wise penalties for Real Estate Agent :

The following are the penalties and compensation that can be levied on the real estate agent.
[su_table responsive=”yes”]

For non-registration under project, he is selling Rs. 10,000 per day of defaults which may extend up to 5% of the cost of the property.
For contravention of the orders or direction of the RERA Penalty on a daily basis which may cumulatively extend up to 5% of the estimated cost of the property whose sale or purchase was facilitated.
For contravention of the orders or direction of appellate tribunal Imprisonment up to 1 year with or without fine which may extend up to 10% of the estimated cost of project or both.

[/su_table]

Offense-wise penalties for Allottees(Homebuyers) of RERA registered project:

The following are the penalties and compensation that can be levied on allottees.

[su_table responsive=”yes”]

Contravention of any order of the RERA Penalty for the period during which defaults continues which may cumulatively extend up to 5% of the apartment or building cost.
Contravention of the orders or direction of appellate tribunal Imprisonment up to 1 year with or without fine for every day during which such defaults continues, which may cumulatively extend up to 5% of the apartments or building cost or both.

[/su_table]

*Apartment means block, chamber, dwelling unit, flat, office, showroom, shop, warehouse, premises, etc.

How to file a complaint :

After the implementation of RERA, we are optimistic that the new law will protect our interest. However, the most important question is, how to file a complaint or a case, under the new RERA rules.

So, for this, every state has described specific forms and procedures which are to be followed. The application can also be filed online, as per the format available. For filing a complaint, the complainant has to provide following details-

  • Particulars of the applicant and the respondent
  • Registration number and address of the project
  • A concise statement of facts and grounds of claim

The form has to be filled and submitted with Real Estate Regulatory Authority or the adjudicating officer.

Conclusion:

RERA is a huge step forward against thief developers. Till now, there wasn’t any regulator and neither were the rules in place. Delay in delivery of projects, bad material used for construction, changing of sanctioned plans every now and then was the major reason why RERA ACT,2016 came into existence.

However, even after RERA, there are many loopholes in this sector. For eg. It might happen that you wrongly signed some document which gives consent to any changes in agreement or project. Because RERA is just a mechanism which is in place to serve justice to all the parties. So, it is always your responsibility to be alert and get into any contract after due diligence.

I hope this article has helped you in understating RERA act 2016. Feel free to ask any doubts in the comment section.

Hey Married Men – Do you know about buying Life Insurance under MWP Act?

Posted on by Jagoinvestor

Do you have any life insurance? And are you really very sure that it will protect your family?

Majority of people who buy life insurance in India, buy it for the sole reason of protecting their family’s future. But is taking the life insurance a sure shot way to protect your family (I mean your immediate family here, which is spouse + kids)?.

protecting family under mwp act

If the primary breadwinner dies because of any reason, the family will have to suffer in absence of a regular income. The spouse will suddenly not get any income and might have to start earning. Your family and kid’s future is also at risk.

Let’s see some risk your family has 

  1. What if you are businessmen and you owe money to someone? After you are dead, the creditors will approach the court and they will get the money out of your life insurance proceeds
  2. Consider you have a big home loan which you have not accounted for while taking a term plan. If you die, the first right will be of the home loan lender because the loan is on your name. The right of the family comes only when your loans are paid off.
  3. What if you have not created your will and there are family members who claim their right in your life insurance proceeds?
  4. What if you yourself change your mind later and don’t want to give the insurance proceeds to your own family?

Are you prepared for this situation? If not then think about it. There is a way which will help you at some points if this such situations appears in-front of your family in your absence and the solution is MWP Act.

Click Here to Buy Term Plan

Have you heared about MWP Act?

MWP means Married Women’s Property Act. This act is prepared by taking into consideration the rights of a married woman on her property. According to MWP Act . the earning of a married woman in India is considered as her own property and this Act Protects the property owned by a woman from Creditors, relatives and even from their husbands.

Buying Life Insurance Policy under MWP Act

MWP Act 1874 under which Section 6 deals with life insurance. If you buy a life insurance under MWP Act, then it will protect the women’s right on the life insurance proceeds money in all the cases. Even the husband can’t do anything about it once the buying is bought under MWP act. This applies to all kind of insurance policies be it a term plan or an endowment/money back plan.

mwp act meaning

Who can be the Beneficiary and Trustee?

When a policy is bought under MWP Act, the policy is treated as a TRUST and its guarantees that the proceeds from life insurance policy are free from any creditors or court attachments.

The first right is of the family only (women and kids). Imagine if you buy an endowment plan which matures in 20 years and you bought it under MWP Act. Once the policy matures, then even the person who started it will not be able to claim anything. The first right will be of the beneficiaries mentioned in the policy.

Beneficiaries can be:

  • The wife alone
  • The child/ children alone (both natural and adopted)
  • Wife and children together or any of them

Trustee can be:

Unlike beneficiaries, having trustee is not mandatory for this MWP Act. The policy holder can mention one or more trusties. Having a Trustee is not compulsory but if the beneficiary is minor then in that case it is compulsory to have a Trustee. The Trustee should not be minor. The Trustee can be change whenever the policy holder wanted. The Trusties can be –

  • A person
  • A bank
  • An institute
  • Beneficiary herself/himself

How will the beneficiaries get benefit ?

When something wrong happens with the policy holder and the insurance is claimed by the family, the creditors can claim for the insurance benefits. In this case the family members will get less benefit of the policy. Or sometimes the other family members can also claim for the part in that policy if the policy holder does not have will.

But if the policy is covered under MWP Act then the whole benefit will go to the wife or kids (whoever the beneficiary is) of the policy holder.

Procedure to buy life insurance under MWP Act

The process is very simple. All you have to do is fill up a MWP addendum form separately at the time of buying the policy. Your agent can help you with that form or talk to the company in case you are directly buying it from the insurer.

However note that it can’t be added separately once you have completed the process of buying the life insurance (means you can’t add the MWP act later)

mwp act addendum while buying life insurance policy

Who can take a Life insurance policy under MWP act ?

Any married man can take a life insurance policy under MWP Act. This includes divorced persons and widowers. The policy can be taken only on one’s own name, i.e., the life assured has to be the proposer himself. Any type of plan can be endorsed to be covered under MWP Act.

Difference – Insurance With MWP and Without MWP

There is not a lot of difference in taking a life insurance under  MWP Act or without MWP Act but we can see some points which shows the difference. See the following picture.

Life Insurance Policy with or without MWP

Are there any disadvantages of buying policy under MWP Act?

Yes, There are disadvantages to signing the MWP addendum as well

  • The Beneficiaries cannot be changed. In case at some point you decide to change the beneficiaries . It won’t be possible if you sign a MWP addendum.
  • Loan cannot be taken on the basis of the policy. The policy could not be used as a security against loan.

That makes it also necessary for loan providers on Life Insurance policies to check before taking it as a mortgage for lending whether the policy does not contain any MWP addendum, as they will not get the benefits from its proceeds.

Let me know if you want to know more about this?

13 things every investor should experience at least once in their financial journey

Posted on by Nandish Desai

It has been around 8 years we as a team are working in the personal finance space. We have worked with a few hundred investors one on one and there is a lot we have learned from their sharing and life experiences.

investors experience

We see personal finance as a journey and any journey will always have experiences. In today’s article we have tried to highlight some experiences which every investor should experience at least once, there is no compulsion but there is something to learn from each one of them.

1. Experience a bull run

For the first time in the history of Indian stock market the sensex has crossed 30k mark. The market is currently riding on a high PE (Price per earnings ratio).

Current PE is around 22-23. In such situation existing or those who started investing 3-4+ years back experience a spike in their portfolio. It’s a moment for them to celebrate as they see their wealth growing.

At the same time on the other side new entrants get attracted to the equity market. It is important to experience a bull run because in a bull run you are able to experience the real power of equity as an asset class.

Once you taste the blood (returns) you fall in love with equities. Bull market expands your risk taking ability, you get a sense of winning.

2. Experience bear market

A friend of mine jokingly came and said “ I made a killing in the market bust of 2008. I shot my broker.”

Remember 2008 market crash; the markets came down substantially in a very short span of time.

You can watch below video

Bear market is one of the greatest teachers in the world of investment. It teaches you patience, discipline and many other elements.

There are some very important lessons a bear market teaches an investor. Those who did not apply asset allocation strategy to their portfolio’s there money got wiped out in front of them. People chase returns but it is also important to check the risk on your portfolio. As your portfolio grows your risk also expands.

3. Experience Zero Bank Balance

Imagine having no money in your pocket and having a zero bank balance. It is a time when you hit the bottom and feel resigned and cynical about the world.

I have experienced the same. Some 9-10 years ago there was a time in my life when I had no job or business and was also not in a position to ask money from my parents. I approached a friend and took Rs.5000/- from him.

bankrupt no money in bank

At that time I was in Mumbai I went to Juhu beach, I took a stick and drew one line in the sand. I jumped the line and made a commitment to myself that I will never ever ask money from anyone and will create financial stability.

That day was a turning point in my life, my relationship with money and my career shifted and things started to move in the positive direction. The zero money day taught me a lot.

4. Work with a financial mentor

I always feel if you want to enhance your performance in any area than work with a mentor. It is said that when the student is ready teacher appears. Find someone and become a student of wealth.

Currently in my life I have a fitness mentor, business mentor and a hobby mentor. I surrender to all three of them and they help me in taking my life and business to the next level.

As an investor get a money mentor, someone who will help you to improve your money management skills, someone who will give an honest feedback to you. Do not have a mindset of saving all the time, some investors try to do everything on their own and are not willing to pay for quality advice. Your mindset is your true wealth and see that you invest in right  mentors.

5. Experience and engage with Charity

I recently came to know about someone who visits India every year and does charity of 1 crore. Last year he came and donated money to build an Olympic size skating ring for kids. Hundreds of kids practice on the skating ring every day and creating champions. What a wonderful GIFT he has given to young kids. This is awesome, this is inspiring and creates real fulfillment.

Below is a picture of the actual place.

Charity example

I don’t know the exact thing but there is some magic in doing charity. Charity adds a special dimension to your financial journey, it helps you to break your over attachment to money and teaches you the real meaning of the word “sharing”.

Charity gets you closer to abundance and you are able to free yourself from the trap called “scarcity”

6. Teaching about money to kids

Sunday morning you should do something special for kids to learn about money. Not just for your kids but it can be your society kids. Teaching is powerful; share your experiences about and around money with young kids or teenagers.

Most people do not take out time to teach KIDS about money.

You don’t have to be an expert, it is about sharing your heart with kids or teenagers in the area of money. You can do a small book read session, if you want we will help you in doing such short sessions.

7. Experience inflation

For this you need to leave your wallet, credit cards and mobile at home and carry limited cash with you. Take a Rs. 500 or 1000/- with you and see how much and what you can buy with that amount. Start making list of how many things you can buy.

The game is not about spending the amount it is about utilizing the amount in the best possible way. Trust me it won’t be an easy exercise.

inflation in India

When it comes to investing and inflation, what matters most is not what you make, but what you keep. As an investor you will always be having war with inflation and the only way you can defeat inflation is by learning discipline and simplicity.

Many investors are not in touch with inflation, they talk about it but they are not present to inflation when they get into the shoes of a spender.

8. Building personal finance library

People spend on having a home theatre but very few have a library at home. As an investor it is important to build your personal finance library. You will have some amazing thoughts while reading about money management.

Money management is a skill and you can acquire the same from reading good books. We have written three powerful books on personal finance, you can start with them and slowly add more books to your library.

Always remember your bank balance is directly proportional to your thought balance.

9. Experience the inner wealth and abundance

Go to some meditation retreat and experience meditation. I highly recommend vipassana meditation course to each one of you. Money exits in the outer world but the thoughts about money resides in your inner world. Your outer world around money is mere a reflection of what is going on inside you.

Doing a SIP or buying a real estate or buying GOLD is fine but what about your inner wealth, see that you don’t go bankrupt in your inner world. Creating balance between your inner and outer world is extremely important.

10. Experience debt

I am not saying if you are debt free then create debt. I have worked one on one with many investors who were in a debt trap and I could see their life changing after overcoming debt. Debt puts you on a slow poison and very few investors are able to break free from debt trap.

Debt Trap

When you fall in a debt trap it is not about money, it means you have mastered the art of mismanaging your financial resources. You fall in a debt trap only when you stop respecting money.

I have seen people putting a lot of effort in becoming debt free, I also know some of our clients who not just finished their debt but have created positive net worth for themselves. One of our clients once shared, “Easy ( credit card ) money has made my life tough”

11. Spend time with someone who is financially free

Create network of people who are financially free. Take someone for a coffee or dinner and have an empowering conversation with them. One of person who I admire a lot owns a few thousand crore pharma company, I look for opportunities to spend time with that person.

I have learnt a lot from that person and every time I meet it leaves me with a new insight about my relationship with money.

meaning of financial freedom

The way they view money, life, world and their work is amazing. The one thing to learn from them is their inner stance, financial freedom is an inner stance and not just a place to reach.

12. Experience completion with your parents

I know I am getting into a sensitive zone with this point and we have never dealt with such things on our blog. Your biggest wealth are your parents and nothing else but somewhere we kind of forget about it. Having a loving and caring relationship with your parents is extremely important.

You may acquire 1000 crore but if your relationship with parents is incomplete you will never experience fulfillment. If you are right now alive and reading this article it means your parents did their job very well. Do not expect anything more from them.

Write a thank you letter to them, do not try to change them or find any faults in your parent’s personality. Even if they are not alive try to have a completion with them, completion is an inner process where there is peace and joy. I am very sure when you start to run behind money your relationship with your parents will experience a rough patch.

13. Experience power of compounding

Start a small SIP and stick to it for 10+ years.

This SIP is not to achieve any goal but it is for you to experience power of compounding.

You can also document your experience and pass it on to your next generation. Power of compounding is magical and as an investor it is important to experience it. You can have anything in life by adding the power of compounding to your actions.

Start your SIP in Mutual funds with Jagoinvestor Help

Conclusion

Your financial journey should not be about chasing returns and only making profits. See that you fill your financial journey with rich experiences and see experiences as your teacher.

During the journey nothing is happening to you ( so stop taking things personally), in fact everything is happening for you and so cherish every bit of your financial journey and continue to make a difference.

Do share in the comment section if you could relate to the experiences we have listed, you are free to share some other life changing lessons that life must have taught you. Feel free to share the articles that we write on jagoinvestor and if you want you can get in touch with us and we can jointly create the content.