Friday, October 3, 2008

BAILOUT or FAILOUT

Finally on Tuesday, Oct 1st, 2008, The House of Senates cleared the BAILOUT package for recovering US from the financial turmoil its facing since the subprime crisis started.

According to my knowledge, I learned somewhere that the actual losses are of 95 TRILLION DOLLARS and 700 BILLION DOLLARS are just like a drop in the ocean. But this will give a sentiment boost to the markets in the short term. In the House of Senates, out of 100, 83 voted in favor, so it was cleared with a vast majority, but its still to be passed by the House of Representatives.

700 BILLION DOLLARS means much because its equal to the 17th biggest economy Netherland's GDP and its 66% of INDIA's GDP. Also, if the 700 BILLION DOLLARS are distributed amongst the US citizens then each of the citizen is entitled to receive 2300 USD, that means approximately 6900 USD per family of 3. With this amount US citizens can fill petrol/deisel/gas in all of their cars for 16 months. This amount is equal to the yearly budget of NASA, Education Dept, Health Dept, Military Dept.

I would advise all my readers to exit from the equity markets during this rally. This will be the best change to exit the markets. As 700 BILLION DOLLARS will not allow to correct the bubble, which was created. The real estate prices should have been allowed to correct fully. The companies which made mistakes due to thier greed, and provided loans upto 28,000 USD to persons capable of just 1,000 USD, should not be given any help. The tax-payers money should not be used to buy those bad assets, which have ZERO value in real.

MORE CREDIT = MORE BUBBLE = BIG CRISIS

Saving the companies this time, will not allow to clear the bubble and a bigger bubble will be created. Finally we will see a bigger crisis later after 3-4 years and that will be worse in the economic history. The markets can correct upto 90-95% that time. The toxic bad assets should be removed from the market for better functioning, but Henry Paulson, who once worked in Goldman Sachs, doesn't want this. He removed Baring Securities, Bear Sterns, Fannie Mae, Freddie Mac, Lehman Brothers, Merrill Lynch from the competition and now Goldman Sachs will rule the market.

There are many companies inline to go bankrupt and the credit crisis is too much worsened in USA. The banks are not lending to each other fearing which bank may go next. Auto companies and airlines are in line too. We can see UBS, Citibank, JP Morgan Chase, GE, General Motors, Ford, American Airlines, United Airlines, Delta Airlines and even Bank of America. We can see CIVIL WAR in USA and it can go USSR way.

I will advise all of you to invest 20-30% only in your equities and take home 10-20% profit whenever you make it. Keep invested in GOLD. GOLD will be above 2000 USD within a year. If you are invested in ULIPs, then change premium paying mode to monthly, that would do better averaging and you will have more cheaper units and less costlier units. In the long run (20-30years) that will give you the most unimaginable returns.

Remember, HISTORY repeats itself. In 1929 similar packages were offered. The result was ECONOMIC DEPRESSION of unimaginable scale.

Feel free to contact me for any investment advise and SAVE your capital, so that you can generate more later.

Sunday, September 14, 2008

IRDA bans sale of insurance products over phone

This time there's some good news for insurance products buyers. Insurance Regulatory and Development Authority of India (IRDA) made a smart move this time in favour of millions of buyers before 2-3 days.

Insurance Regulatory and Development Authority of India (IRDA) banned selling of insurance products over phone. According to Insurance Regulatory and Development Authority of India (IRDA), in last 6 months over 10% of the products sold were mis-sold. The common sales pitches used for mis-selling can be found here.

This will be a huge respite for uninformed, innocent people who were called by Tele Sales Representative of the insurance companies and were given insurance products which the buyer had no information about. I have come across many cases where the person was called in the insurance companies office with his/her spouse and they were given some gift worth 100 bucks and were sold insurance products worth 50,000 bucks. And as the Indian women are very attached to free gifts, the hubby had to buy that 50,000 premium's insurance for that non-worthy 100 bucks gift.

Another instance of mis-selling over phone was more of like a fraud. The individuals were given minute details over the phone, and that too only positive points, and were asked for credit card details. The premium amount was deducted from the credit card and then the detailed documents were sent to the consumer. As we all know, no one reads the full documents of the insurance. The problem arises when the claims are made. The insurance company denies claims on basis of many faults in the form and the loser is consumer always.

This ban will be very beneficial to the consumers and its a reason to cheer for all of us!!!

As a Tip, I would suggest all of my readers to read the documents carefully before buying any insurance product. You can always ask for the product brochure. You can call the toll-free number any time, 24 hours a day. You can ask for the help of a good financial advisor to understand the product better. I would really love to hear, if you don't invest without studying the insurance product fully. Wish you all the best and a financially independent life.

Saturday, September 13, 2008

Now its Delhi, Indian Mujahideen continues

Today the terror striked in Delhi. INDIAN MUJAHIDEEN continues its terror from Hyderabad, to Jaipur, to Bangaluru, to Ahmedabad, to Delhi. According to news at present 10 PM IST, 20 people have been killed in 5 serial blasts in Delhi.

The serial blast began at 6:10 PM IST. The first bomb exploded at KarolBagh (Gaffaar Market), the second at Greater Kailash Part - 1 (M Block), the third again at Greater Kailash Part - 1 (M Block), the fourth at Cannaught Place (Barakhambha Road), and the fifth at Central Park (Palika Bazaar).


View Google Map

According to the e-mail sent by INDIAN MUJAHIDEEN, they had planted 9 bombs. The other four have been found and defused too. The four bomd were found at India Gate, Regal Cinema, Cannaught Place, and Parliament Street (Unbelievable!!!). NDTV quoted the email as saying, "In the name of Allah, the Indian Mujahideen has struck back again."

The boy, who sells balloons, saw 2 men who planted bombs in the dustbin and they were in black dresses and after 10-15 the bomb blasted.

At present, 10:07 PM IST, sources say 1 have been arrested and police has confirmed that the e-mail was sent from Mumbai (Chembur city). The e-mail after Ahmedabad blasts was send from Mumbai too.

All injured have been admitted to Ram Manohar Lohia Hospital and Gangaram Hospital. The conditions are critical. Lets pray for them.

[UPDATED AT 10:30 PM IST] Taukir is the mastermind behind these blasts says police.

[UPDATED AT 11:44 PM IST] Death toll rises to 24.

The latest pictures which I found have been attached below:
or you can watch the slideshow here
Picture source: http://afp.google.com/article/ALeqM5g6oBbuA-rWJUShVB6FHab1SNWfdw

Delhi Bomb Blast 2008 - INDIAN MUJAHIDDIN

Delhi Bomb Blast 2008 - INDIAN MUJAHIDDIN

Delhi Bomb Blast 2008 - INDIAN MUJAHIDDIN

Delhi Bomb Blast 2008 - INDIAN MUJAHIDDIN

Delhi Bomb Blast 2008 - INDIAN MUJAHIDDIN

Delhi Bomb Blast 2008 - INDIAN MUJAHIDDIN

Delhi Bomb Blast 2008 - INDIAN MUJAHIDDIN

Delhi Bomb Blast 2008 - INDIAN MUJAHIDDIN

Delhi Bomb Blast 2008 - INDIAN MUJAHIDDIN

Delhi Bomb Blast 2008 - INDIAN MUJAHIDDIN

Thursday, September 11, 2008

Sales Pitches used for "Mis-selling"

I had heard about mis-selling of insurance products earlier, but I was really shocked when I really experienced it. There are certain standard "sales pitches", which a life insurance advisor makes while mis-selling insurance products. Lets see these standard pitches and be aware in future that you are not a victim of mis-selling of insurance products:

  1. ULIPs have free insurance

    If any advisor says he's giving free insurance with mutual funds, then he is probably talking of Unit Linked Insurance Plans (ULIPs). But remember always that insurance can never be free. Some mortality charge is always levied (depending on your age), even if the advisor says its free.

    Tip: Don't fell into trap, ask for the brochure or call customer care (toll-free numbers) to know the hidden charges.

  2. No details on the expenses involved

    Unit Linked Insurance Plans (ULIPs) always involve high upfront charges, referred to as Policy Administration Charges, which range from 14% to 75% of the Premium Amount. Most or all of this amount is passed on to the advisor as a commission.

    Tip: To protect yourself from this mis-selling, always ask the advisor to give you a brochure of the product he is selling and look for the table detailing the "Premium Allocation Charge".

  3. Money-back offer

    Some of the advisors make huge commissions on the sale of insurance products. They have their own targets and they have conventions and foreign tours to be own. To achieve their targets, they may offer you some cashback. Say you are investing 10,000 bucks and the advisor is making 2,000 bucks of commission (20%). He/She may offer you 1,000 bucks of cashback. (Believe me, I have seen advisors which offer 100% cashback, means they pay your first year premium. But then???)

    So, should you invest just because you are getting 1,000 bucks back? Remember, the advisor will offer cashback only in the first year and if the insurance's premium paying term is 15-20 years, you need to pay 10,000 bucks * 20 = 2,00,000 bucks. You will be trapped in a wrong product and your investments and financial planning will fail.

    Tip: Understand the product, call the toll-free number, clear your doubts and then go for any insurance product. Don't invest 2,00,000 bucks just to save 1,000 bucks.

  4. Double your money in 3 years

    This is the "sales pitch" which is most popular now-a-days. What do you think, is this possible? I have an downloadable excel sheet here, which staes that if you are investing 10,000 bucks per year, then in 3 years you will invest 30,000 bucks and to double that, means to make it 60,000 bucks, you need return on investment of 51.20%. I don't feel any asset class can give such assured guaranteed return constantly. If you believe then just check your investments. The stock market's behavior right now can give you heart attack.

    I came across many people, who have been victim of mis-selling by other advisors and they have bought 10s of insurance products for each and every member of their house and burnt their hands in this choppy market. They were shown illustrations with return of 25-26% by their advisors. This is purely illegal.

    Insurance Regulatory and Development Authority of India (IRDA) only allows illustration which assumes return of 6% and 10%, which is achievable too. The moment you see illustrations other than return of 6% or 10%, they are purely assumed and illegal and the advisor is mis-selling you the insurance product.

    Tip: Consult your friends and financially knowledgeable people and if you know the markets well, study them well and make sure you are investing in a right insurance product. Ask the upfront charges that will be deducted as "Policy Administration Charges".

  5. Pay premium for only 3 years and forget it

    This is the sales pitch used for mass mis-selling. Unit Linked Insurance Plans (ULIPs) have a cover continuation option, which continues the life coverage of the individual, if in any case he/she is unable to pay the premium after the initial 3 years. But stopping to pay premiums after the first 3 years will not help you either.

    Initially, for the first 3 years, the charges are high and the amount invested is thus less. After 3 years, the charges gets reduce to nearly 1% of the premium amount and rest gets invested. But if you stop paying premiums after first 3 years, you will not build a capital in longer term (This is for what you bought a policy). If you continue to pay premiums for full premium payment term, then you can build a capital that is nearly 10-15 times of your investment in 20-25 years.

    I learned from my friends that advisors even guarantee a payment of 16,00,000 bucks after 20 years if you pay 10,000 bucks for initial 3 years. That's 30,000 turned into 16,00,000 (53 times approximately). My downloadable excel sheet here shows that you need 26% increment every year to achieve that target. Ask yourself, have equities given that much return with a guarantee?

    Tip: Whenever you choose an insurance product, foresee your expenses and plan in a way so that you can pay premiums for a full premium payment term. Don't rush in to get every new insurance product. When you hear such "sales pitches", ask for the charges straight forward and invest wisely. Don't be "Penny Wise and Pound Foolish".


So this was a pretty long list of some "Sales Pitches" used for mis-sellings and my tips to avoid those. Don't be trapped into those and if you save yourself from those mis-sellings, don't forget to leave a word of thank for me.

Sunday, August 31, 2008

Keep in mind while trading OPTIONS

Below are some tips to keep in mind, while trading OPTIONS:

1) 20 - 100 rule: Make sure that you will not tolerate the Loss of more than 20 % of premium money you are invested per trade (say 3 out of 10 trades=30%), and lock in 100 % profits of premium money per trade (say 7 out of 10 trades=70%)

So in the long run for every 3 losing trades you will be having the 7 winning trades.

Get out when you see a drop in 20 % of the premium money.

2) Make a simpler strategy and trade with the above rule.(You might be reading books and have arrived upon many strategies, but trade one strategy at a time. That too it should be plain simple one.)

3) Don't use more than 10 % of your account money in one trade. (As a general rule, if you have 1 lakh with for trading per trade you should not be putting more than 10K, and the rule no. 1 stands at 2K stop loss.)

4) Do a paper trade and gain experience and then starts with the real money trading.

5) Don't switch strategy often.

6) Use conservative strategies in the beginning, then once you are experienced you can take the more rewarding ones.

7) Remember the Premiums that you will be paying will get eroded with time decay. Be prepared for that.

8) Before you enter the trade make sure that you have plan like

  1. What is the stop loss for the trade?
  2. What is the target you set for the trade. (In general, you should set 100% but for starters they can set 50%)
  3. What is the probability of reaching the target ?

9) Always remember to exit once the profit reached.

10) Always monitor your positions.

Friday, August 29, 2008

Planning your finances early

The first job for any individual marks a turning point in his life. The first paycheck acts as a gateway to new opportunities and of course, financial independence.

It could also mean preparing to shoulder responsibilities, if your family budget is in need of augmentation.

Even if you are not required to contribute, you still owe it to yourself to handle your finances with care.

Below are some of the steps, which you must take to ensure financial independence:

1. Insure yourself
The first thing that you need to look at once you get your salary is insurance — for yourself as well as your dependents. You should opt for a term life insurance cover now that you have a steady stream of income. If you buy a life insurance cover at a young age, you will have to pay lower premiums. The value of the cover can be 10 times your annual cost-to-company (CTC). Life insurance premium paid is eligible for tax deduction under Section 80 C, but protection, and not tax benefits, should be the criterion for taking such decisions.

However, there is no need to get a life insurance policy in the first year of work-life if you have no dependents. You would be better off acquiring a mediclaim with a cover of Rs 3 lakh-5 lakh. Even if your organization offers a health insurance cover, it would still be worthwhile to sign up for a standalone insurance policy. In addition, you can claim a deduction of up to Rs 15,000 under Section 80 D on health insurance premiums. You can get a health insurance cover for your parents. It entitles you to an additional tax deduction of up to Rs 15,000.

2. Avoid loans
Next, you need to guard against the temptation to borrow funds to purchase cars, bikes or consumer durables.

You should leave such decisions for the second year if not later. Consumption loans are not a good idea.

Also, if at all you have any surplus left after addressing your needs, it is advisable to avail of a home loan jointly with your parent/s.

3. Strive to save
If you are single and living by yourself with a monthly income of less than Rs 25,000, your target savings rate can be 40%; while it can be 50% for those earning Rs 25,000 to Rs 50,000.

For people with an monthly income of above Rs 50,000, the ideal savings rate would be 60%. A part of the savings could go towards building a corpus for meeting emergency needs.

Ideally, you should direct a minimum of 25% of your gross income towards investments. If you are jittery about dealing in equities, you could put small amounts of money into Unit Linked Insurance Plans (ULIPs), Public Provident Funds (PPFs) and Fixed Deposits (FDs).

While FDs can yield a return of around 10% at the moment, you should go for them only if you fall in the no-tax or low-tax brackets. PPF, which carries a return of 8% p.a, offers tax breaks under Section 80 C. Investing small sums on a regular basis , in Unit Linked Insurance Plans (ULIPs), could result in a sizable corpus over a period of time.

If you invest Rs 5,000 every month in a PPF, your kitty would swell to Rs 17.40 lakh after 15 years. The returns are certainly not comparable to those offered by equities, but it is better than letting your money lie idle in a savings account.

However, your risk-taking capacity would be high when you are in your 20s. Investing in equities — either directly or through systematic investment — could be your best bet. To start with, you need to invest 80% of your target savings in equity through the Unit Linked Insurance Plans (ULIPs).

If you stay invested with a long-term view, equities can offer you far better returns than other avenues.

Besides, investments of up to Rs 1 lakh in some equity MF schemes — equity-linked saving schemes (ELSS) — are eligible for deduction under Section 80 C, thus presenting you with the dual benefit of tax-saving as well as investment.

So, when are you starting your investment and looking forward to build a great corpus???

Honesty is the best insurance policy

On March 16, 2001, Kumar had taken a life insurance policy for himself for a sum assured of Rs 10 lakh. He had given the following answer to a question in the proposal form that asked:
“Do you consume alcohol”? Yes/No; average usage per day.
Ans: Yes, 1 peg per week.

Seven years later, Kumar died of liver cirrhosis, caused by chronic alcoholism. Because of the false statement in the proposal form, the insurance company repudiated the claim. Kumar must have been embarrassed to admit his problem of chronic alcoholism while filling up the proposal form, but little did he know that in spite of paying premiums regularly and taking a policy, he would leave his family stranded in its hour of need.

Policyholders are in danger of seeing claims on their insurance policies turned down because they fill the proposal form very carelessly or make the agent do the job (irrespective of whether they are literate or illiterate). What the proposer doesn’t realise here is that this document will be referred back to at the time of claim and a careless “yes/no” will prejudice the claim settlement. A proposal form is the foundation on which an insurance contract stands.

Insurance contracts are based on trust. Since the insurance company knows nothing and as a proposer you know everything about the risk, it is your duty to make a full disclosure of all the facts that will affect the insurer’s decision to insure you and the terms on which they insure you. A lot of times, people tend to lie about their health for fear of not getting the policy, or having to pay up a higher premium. While this may get you a policy easily; at the time of a claim, you will land in trouble. And then, you may get cynical about insurance and find yourself in agreement with someone who said, “Insurance is like marriage. You pay and pay but you never get anything back.”

Insurance agents also tend to play smart. They will prompt your answers at the time of filling a proposal form and make it sound like it’s just a formality, lest they lose out on a customer. But the law says “buyer beware.” The contract is between you and the insurance company and not between you and the agent. As a party to the contract, you are expected to maintain utmost good faith in the insurer.

An essential part of the insurance contract is the understanding that each has taken the other entirely into confidence. If there were to be any question of one withholding from the other what he needs to know, the entire transaction would be void. So you need to watch out - as mistakes can prove costly.

The insurance regulator in India has also made it mandatory for insurance policies to be issued with the proposal form duly filed in.

All too often, customers and insurers are only too happy to complete a transaction without this important document - leaving the door open for disputes on what was intended to be covered or excluded.

Some tips:

  • Be honest and forthright in responding to the questions in a proposal form as any erroneous information could result in the insurer denying you coverage.
  • Don’t sign on a blank incomplete proposal form. You will be held responsible once you sign on the document. You should check the correctness of the information before signing. And keep copies of the filled & signed proposal form.
  • You need to bear in mind that your duty to disclose is of an ongoing nature. Many people do not realize that every renewal of an insurance policy is a new policy, i.e. a new contract requiring disclosure. Say Ravi took his first health insurance policy in 2004 from Sigma Insurance Co and for the question in the proposal form pertaining to “Whether you have any other health insurance policies in force,” he replied in the negative, which was true. But it was no longer true when the policy was renewed with the mutual consent of both parties in 2005, as Ravi had taken another health insurance policy from a different insurer. Ravi was obliged to inform Sigma Insurance Co about the new policy that he had taken because the original proposal form becomes incorporated into the renewed policy and continues to form the basis of the contract.


As always, the devil is in the detail, lurking in the fine print of your proposal form. So, please take some time off before signing the proposal form as some investment in time today will help avoid any heartburn later. The unexpected happens all the time… so just having an insurance policy tucked away somewhere is not enough; due diligence while filling the proposal form is of utmost importance.

Tuesday, August 19, 2008

Win 25 USD and 2000 EntreCard (EC) Credits

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Also, check out this technology blog for some tech tips and news, reviews, etc.

Thursday, August 14, 2008

Bear markets? ULIPs are still a good bet

For holders of unit-linked insurance plans, the current market conditions do not matter much. The markets have fallen considerably from the highs of January this year, and the possibility of a long-term, sustained recovery is largely seen in the context of three factors - oil price, the Indian growth story and the US economy.

A common thread going through these factors is that their impact can be measured only over a period of time. Ulips are bundled investment products designed to boost long-term savings more than short-to-medium duration ones. The benefit is reflected in low costs if the savings are over a long period of time.

Should the weakening stockmarket worry investors who take the Ulip route to equities? The product is best for generating wealth over periods not less than 10 years. There is also enough evidence to show that equity outperforms other assets and can give annualised returns of 15-20 per cent over the long term.

Existing holders: If you are holding Ulips with full exposure to equity, stay invested that way till maturity is around five years away. Ulips allow investors to switch their corpus to non-equity options like debt or balanced funds. If the fund value has eroded over the last six months or so, stick to the equity option.

If you have been putting premiums in the debt fund option, now is the time to move into equity. You can do this in two ways - by moving the entire corpus in one go or by transferring smaller amounts at regular intervals.

New buyers: Invest in a Ulip for the right reasons. Weak or strong market conditions should never be the cue for starting savings in any asset class or financial product. The equity fund option is the best option, so go for a fund that takes 100 per cent exposure to stocks.

The other way to go about it is to put the premium in a debt or a balanced fund and then switch to equity when you feel that the market is strengthening. The problem with this is that you will have to time the market, which you should ideally avoid.

Switching options: Insurers provide a specified number of free switches among fund options in a year. These can be done both offline and online.

What to do? Shift gains from equity funds of more than 20 per cent in any year to debt or balanced funds. Markets move in cycles and there could be three or four opportunities of extraordinary returns in a 15-20-year holding period.

While restructuring fund options, ensure that optimum balance is maintained between returns and life coverage. If you lower the sum assured to maximise returns, your life cover may fall below your requirements. Finally, uncertain market conditions, as are being seen now, should never be the reason for a full exit from Ulips. Costs in most Ulips are front-loaded and, hence, it is important to make them run their full course.

Source: http://www.rediff.com/money/2008/aug/13perfin.htm

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Monday, August 11, 2008

Now insurers can`t refuse health cover renewal

In a move that will bring cheer to health insurance policyholders, non-life insurers are finalizing the contours of a new product that will have a common minimum standard cover and will be renewable and portable across companies.

The move being pushed by the General Insurance Council, the self-regulatory body, will mean that insurers cannot refuse renewal of policies on grounds of adverse claims. Similarly, all benefits will continue to be available to an insured person even if he or she switches to a new company.

While pre-existing diseases are only covered after four years of a policy, an insured will be eligible to these benefits from the first year of switching to a new company. In addition, cumulative bonus and discounts will also be available after the change.

General Insurance Council Secretary General K N Bhandari said those buying a health cover at an early age will not be denied renewal on grounds of adverse claims. So, if someone buys the new cover at, say, 30, he will still get a cover at 50 years even if the he has developed heart problems and has filed for claims.

Insurers will approach the Insurance Regulatory and Development Authority (IRDA) for approval of the new product that will come with all these features later this month. Premium is, however, yet to be finalized, but will be affordable, Bhandari said.

“Insurance companies will not refuse renewing the health insurance policy except on specified grounds such as moral hazards. In case the insured has cheated the insurer or not disclosed the full facts regarding his health or in those cases where there is no correct exposure, we will refuse renewing the cover,” he added.

Health insurance policies contain the renewability clause that specifies the type of the contract and terms for renewal, which are of three types.

The first type is optionally renewable, where the insurer has the option to renew the policy on its terms. This is the cheapest policy for the insured.

The second type is guaranteed renewability, the premium rating for which depends on the claims experience.

The third type, which is the most expensive variant, cannot be cancelled and renewal is guaranteed, but the price can vary.

Sunday, August 3, 2008

3 most necessary life insurance policies

I would like to explain in details the investment and insurance options, so that I can help you in making informed decisions and you can invest in a better way and generate capital in longer term and also protect yourself from the unexpected occurrences of illnesses.

We'll review 3 most popular and most necessary life insurance policies which any individual should have in his/her insurance portfolio for a financially independent life-style.

1. Health Insurance:

First and most important is health insurance.

Hospital rooms. Doctor's Bills. Stress. Worry. Tears. Frustration.

Life seems to be over the moment one is diagnosed with a critical illness. Critical illnesses, like cancer or heart attack are extremely unpredictable and can strike anytime, anywhere.

With Health First from TATA AIG LIFE, life doesn't have to come to a standstill. Because the financial cover it offers plays a large role in contributing to your peace of mind and subsequent recovery. If you are ever diagnosed with any of the 12 Critical Illnesses, or need surgery, this special benefit provides you with a lumpsum amount.

The 12 Critical Illnesses covered are: Cancer, Stroke, Heart Attack, Chronic Renal Failure, Aorta Surgery, Heart Valve Surgery, Major Organ Transplants, Coronary Bypass Surgery, Parkinson's Disease, Paralysis, Benign Brain Tumour, Total Blindness.

Features of Health First:

  1. Daily Hospitalization Benefit: Rs.250 per day for Max 90 days
  2. Post Hospitalization Benefit: Rs. 125 three times within 30 days of discharge.
  3. Surgical Benefit: Rs. 12,500 per unit
  4. Critical Illness: Rs. 1,25,000 per unit.
  5. Death Benefit: Rs. 1,000 per unit.

The Annual Premium of Health First for one unit is shown below and the total benefit of one unit is Rs. 2,50,000

Age of life assured Male Female
18 786 765
19 792 775
20 801 791
21 841 835
22 886 882
23 928 929
24 970 982
25 1022 1044
26 1073 1113

So, even if you go for 4 units, then you need to pay approximately just Rs. 3600 yearly, i.e. Rs. 300 per month only and you will have the coverage of Rs. 10,00,000.

For more details, please visit http://www.tata-aig-life.com/Individual/Adult/adultHealthFirst.htm

2. Unit-Linked Insurance Plans (ULIPs):

Second is an insurance with investment perspective.

If u are still young you can generate tremendous wealth if you start early.

But before I show you the real wonder, lets see what are the benefits you can have if you act right now by investing in equities:
  1. Equities, even being volatile in the short term, are the best instruments for long term growth of capital.
  2. Regular investment will help compounding your wealth.
  3. It will help to fight Inflation.
  4. It will help to plan for your financial goals.

The 2 tables below shows the effect of the inflation:

i. Effect on our Bigger Spendings:

Spendings on Year - 1985 (Price in Rs.)Year - 2008 (Price in Rs.)Inflation(% per year)
Balcony Ticket1524013.43%
Hotel Bill1001,20011.96%
Petrol 8/litre56/litre9.00%
MBA Course40,0008,00,00014.59%

ii. Effect on our Daily Spendings:

ProductYear - 1985 (Price in Rs.)Year - 2008 (Price in Rs.)
Toothpaste 550
Masala Dosa525
1 Kg of Sugar422
1 Kg of Salt210
1 Kg of Onions318
1Litre Milk424

Compared to inflation above the increment in the salary was negligible, as shown below:

PostYear - 1985 (Salary in Rs./month)Year - 2008 (Salary in Rs./month)Increment(% per annum)
Accountant 5,00024,0007.39%
Manager 8,00040,0007.59%

Investing in Equity is Risky, but not investing in Equity could be Riskier...

Growth is a NEED today, and not an option.

The best ULIP in the industry at present is TATA AIG LIFE's INVEST ASSURE FLEXI...

I have an excel file where you can input the Yearly Premium to pay and Rate Of Interest you assume to get, and you will get the result for the next 40 years...

You can download the excel file from this location:

Download File

Just edit the 2 cells, with black background and red text:

  1. Premium, which is 25000 by default
  2. ROI, which is 20% by default.

You will not believe, but the power of compounding is great. Compound interest is the 8th wonder of the world.

Investing just Rs.25000/year, for 40 years, will give you Rs. 13,43,36,909!!!

Believe me 13 crores against an investment of just 10 lakhs.

Delays could severely affect your wealth creation goals.

Follow the simple rule below:

Start Early + Invest Regularly = Create Wealth

Start Early:

The example below shows the benefit of starting early:


YouYour Friend
Current Age (years):2525
Start (age):TodayAt age 30
Invest for (years): 520
Amount invested per year (Rs.):18,00018,000
Total Invested Amount (Rs.):90,0003,60,000
Redemption at age (years):6060
Amount accumulated at 60 years, assuming 20% return (Rs.):2,19,83,8001,68,73,411

As you can see your friend, even after investing for 20 long years could not beat your investment of 5 years, simply because he started late. Only 5 years late. I hope you don't want to be late.

Invest Regularly:

Even small amounts invested regularly can grow substantially.

Buying MORE units @ low prices & buying FEWER units @ high prices helps AVERAGE out your purchase price.

Rs.1,500/- invested every month for 20 years = 18,000 * 20 = Rs. 3,60,000

Fund Value at 20% return per annum = Rs. 30,76,680

A whooping Rs.30 lacs, 10 times the invested amount!!! So, you might be eager to invest today, right now. Won't you?

For more details, please visit http://www.tata-aig-life.com/Individual/Adult/adultInvestAssure Flexi.htm

3. Term Life Insurance:

Third is term life insurance, which you must take if you are not going for a ULIP.

If you have lesser savings at present you can start with a term life insurance, and then when your savings increase you can go for ULIPs. Because, when something wrong happens to you (I hope it doesn't, but this is the reality of this world), all your dependents will have hard times living, as you are the bread-earner. If they receive a lumpsum amount, they could plan and live on their-self. Even if you have too much money and you have bought property (land) all across, if you don't have insurance, the value of that property will decrease drastically, once you leave this world. Because all the buyers will know that your family needs money and they need to sell the property or anything to leave their life.

By the way Term Life Insurance is the best form of life insurance and its the real insurance. Others such as ULIPs, or Money-Back Plans or Endowment plans are modified form of insurance with an investment perspective.

For term life insurance you need to go for RAKSHA from TATA AIG LIFE, as it has the lowest charges. You can compare with any other company.

This is premium table of RAKSHA for sum assured Rs. 10,00,000:

Age of life assured Policy term 10 year Policy term 15 year Policy term 20 year Policy term 25 year
18 1720 1780 1830 1900
19 1750 1780 1870 1940
20 1770 1830 1900 1980
21 1790 1850 1930 2020
22 1810 1870 1960 2060
23 1820 1900 2000 2110
24 18401920 2040 2150
25 1860 1960 2080 2210
26 1880 1990 2130 2270

For more details, please visit: http://www.tata-aig-life.com/Individual/Adult/adultRaksha.htm

Plus there are many more products, which can give you guaranteed returns, which can assure your retirement plans, which can plan for your children's education or marriage, which can plan for a holiday abroad, which can protect you for the life-time, which can give you monthly returns after your retirement. But those can be discussed on specific needs. We need time to discuss those things. If you have any other requirements you can always forward your query.

Why choose TATA AIG LIFE INSURANCE COMPANY:

Tata AIG Life is the one of the most trusted Life Insurance Companies in India. Since its inception in 2001, it has grown by leaps and bounds. Today, Tata AIG Life is present in 24 states and 156 cities across the country. It covers over 22 life insurance products and has over 250 product combinations. It is hardly surprising that Tata AIG Life has been voted No 1 in customer satisfaction* among life insurance companies in India.

* Source: Consumer Voice Survey 2006

Why choose ME as your LIFE INSURANCE ADVISOR:

You must have come across the frauds and false sales made by the advisors of life insurance companies, in the newspapers or might have experienced yourself too. They sell wrong products with wrong targets, and wrong promises. Do you know why? Because its their job. They get commission for that, and they are solely dependent no. of policies sold. They don't have any other source of income. So to fulfill the needs of themselves and their family, they need to sell life insurance policies anyhow. They try all the combinations and give false commitments and fly away with their commissions. This is not the case with me. I am a Software Engineer, I have my monthly salaries credited in my bank account regularly. I work as a Life Insurance Advisor, so that I never get cheated by the frauds all around us. I protect my friends, family members and relatives too. I help them to take informed decisions, and never give false targets or false promises. If I sell a policy or don't, me and my family don't have to worry about the money. So, I make trusty and true sales and build a long-term good relationship. So its on you to choose an advisor who thinks of your profits or who thinks of his/her own profits. Hope you take a smart decision.

For brochures of the life insurance products discussed above or other products you have heard off, or any queries regarding investments contact me as soon as possible.

Even if you don't buy insurances from me, feel free to discuss your requirements.

Any queries will be highly appreciated. I will feel you have learnt something from this.

For any other detail, you can have a look at the official website of the company: http://www.tata-aig-life.com/

I also want you to look once at the newly launched website of the company: http://www.assuremydreams.com/

Thursday, July 31, 2008

Nuclear Deal - Is It Worth?

So, finally the INDIAN GOVERNMENT won the VOTE OF TRUST on July 22nd, 2008. The Prime Minister of INDIA, Dr. Manmohan Singh, and the CONGRESS Party managed to win the TRUST VOTE, with the help from SAMAJVADI PARTY. Instead of the bundles of currency notes (of 1000 INR) shown by the BJP MPs, the GOVERNMENT managed to secure 275 votes in favour and 256 were against it.

And on July 23rd, 2008, the INDIAN STOCK MARKET (SENSEX) managed to show sharp positive upmove gaining nearly 6%, that too closing in green on straight 5th session.

But was all this worthy for the nuclear deal? Facing so much INFLATION (12% nearly), wasn't INDIA required to focus on INFLATION?

Let's take a look at the nuclear deal now. This is the first time a nation is seeking permission to trade with the member countries of NUCLEAR SUPPLIER'S GROUP (NSG), without signing the NUCLEAR AGREEMENT and without showing all the operations of NUCLEAR UNDERTAKINGS to the INTERNATIONAL ATOMIC ENERGY AGENCY (IAEA). If this nuclear deal is completed finally, then INDIA will be an undeclared NUCLEAR POWERED NATION.

Actually, this deal is not for the nuclear energy. The PM of INDIA says this nuclear deal is necessary for fulfilling the electricity needs of INDIA. But if we believe the PLANNING COMISSION OF INDIA, even after this deal is finalized, INDIA will only be able to produce only 40,000 MegaWatt of power by 2020, which will be only 9% of the total production of INDIA.

All the countries in the world, those started producing electricity from nuclear power have either shut down their power generation units, or are not setting up new units. USA itself has not set up a single unit in the last 30 years. France, which generates 75% of the power from these sources, will be setting up only 1 unit in the coming years. Japan is also focusing on Renewable Sources of Energy, instead of nuclear power, and spending a lot on R&D. Even Australia, the largest supplier of Uranium (required in producing nuclear power), does not have a single unit to generate power from nuclear energy.

INDIA has produce just 3,000 MegaWatt of power from nuclear energy in the past 10 years. USA has so many hidden profits in the nuclear deal. The USA Parliament has been informed that within approximately 15 years, there could be a war between CHINA and USA. And USA wishes that INDIA should support USA in that war. Thats why from the last 7 years INDIA and USA are engaged in the joint military trials.

Apart from this, INDIA will be a potential customer for the on-the-verge-of-extinct nuclear market. Also many of the USA companies have either entered or are ready to tap the potential of INDIA market for consumer durables, cold-drinks, packaged drinking water, agriculture, service sector, insurance sector, entertainment sector, retail sector, etc. After the nuclear deal, if these companies harm the rights of INDIAN consumers, it will be hard for INDIA to take action against these companies. In the past, INDIA was unable to take action against COKE and PEPSI, even after there were so many allegations (and even proofs) of using underground water, findings germs in the drinks, etc.

It seems USA has started influencing INDIAN POLITICS and Dr. Manmohan Singh feels himself more unswerable to Goerge Bush than the INDIAN population. That's why ignoring all the internal problems of INDIA, the PM of INDIA focused only the nuclear deal. Don't the PM of INDIA know what was the result of focusing on INDIA SHINING, which was launched ignoring the basic problems of mass population? The general elections, due next year, will decide who have won the trust of INDIAN public.

Sunday, July 13, 2008

How A Missing Signature Killed The Dreams Of The Sharmas

The headline and accompanying article were only 3 sentences long:

"Tragedy Strikes Local Family - Rajesh Sharma was killed yesterday evening in a single car accident when the vehicle he was driving hit a patch of ice and lost control striking a concrete bridge support. He is survived by his wife and three children.”

Can two sentences sum up the life of Rajesh Sharma?

No way. You see I knew Rajesh Sharma and I bet you have friends just like him. A great guy, a loving husband and a caring father. Heck, you might be just like him yourself. Let me take a moment to share with you the story behind the story:

The accident occurred on a Friday evening in early June. I had just talked with Rajesh earlier that afternoon and he was on top of the world. So many things were going right for him, he joked, it just wasn’t fair for anyone else. He and his wife Smita had been married for 24 years and she had given him three terrific kids. The oldest, Aastha, had announced at Thanks giving that she was engaged and was going to be getting married the following fall. Everyone liked her fiancĂ© and they were already making plans for a lovely wedding with lots of friends and family.

Next in line was his son Rahul who was a senior in high school. Rahul was a well-rounded kid who did well in school and was busy applying to a number of colleges. He hoped to get accepted to an top-class university school and his grades were strong enough that he might just get in.

Finally, there was Aryan who was a sophomore in high school. Aryan was a great cricket player, good enough to play varsity, and was excited as the season was just getting under way. Rajesh had not missed one of Aryan’s games since he was in the sixth grade.

For Rajesh, well he was on a roll too. He had gotten a promotion over the summer that gave him a significant pay raise. Enough for he and Smita to buy a larger home in a nicer part of town.

When I talked to him earlier that afternoon, he was making plans to leave work around 7:00 PM, go home and change, then he and Smita were going to their first party of the holiday season. He was telling me he was looking out of his office window at a light snow falling.

Unbelievably, at approximately 7:52 PM Rajesh Sharma was pronounced dead on the scene. Apparently, according to police reports, he was traveling down the road and hit an icy spot which caused him to loose control of his car and hit the bridge support head-on.

While Rajesh’s death was a great loss to those who knew him, it nearly tore apart his family. You must understand , I loved Rajesh like a brother, but there was one thing that he never did that I hope you take away as a lesson from this story.

Rajesh never finished the application for the life insurance policy I had sent him. I had already filled in everything for him. All he had to do was sign it. Every time I asked him about it, he always put me off by telling me he would get around to it when he had time. He was just to busy, he said.

When Rajesh died at the age of 48, his “estate” consisted of a Rs. 40,00,000 house on which he owed Rs. 32,50,000, some small stock and bond investments, three cars, and Rs. 2,00,000 in debt. .There was no life insurance to act as income replacement for the next 20 years. · There was no life insurance to pay off the mortgage debt, credit cards, or auto loans. · There was no life insurance to pay for the kids college. · There was no life insurance to pay for Aastha’s wedding.

Smita ended up having to sell the house and take a job in order to make ends meet.

The really aggravating thing was that Rajesh was in decent health and could have gotten a Rs. 1,00,00,000, 20-year term life policy for around Rs. 1000 per month. That Rs. 1,00,00,000 would have gone to his family tax-free in a lump sum and would have done a lot of good for his family at a time they needed it most.

Why do I share this story with you? I want you to be aware that the decisions you make (or don’t make) can have a major impact on your loved ones. Whether you buy your life insurance from us or get it from someone else, just do it! Before it’s too late.

Rajesh didn’t plan on dying when he did. Few people ever do. Take responsibility and take action.

Top 5 jobs that need life insurance

Life insurance is an important aspect of everyone’s lives and is something which everyone will have to face at some point in time throughout their lives. This point may come sooner rather than later for some individuals because of the job they perform on a daily basis.

While some individuals start everyday by putting on their suits and racing to get to the coffee shop for their morning coffee,others are strapping on their work boots and preparing themselves for a day of excruciatingly hard labor. As scary as it may sound, there are many individuals who are willing to put their lives in danger every single day when they get up and go to work.

The following is a list of the top 5 jobs which are considered to be the most dangerous jobs in the world. Individuals who perform these jobs are highly recommended to have a life insurance plan in case (god forbid) anything goes wrong on any given day. These are the 5 occupations which made the list:

1. Police/Detectives

Police Officers face life threatening situations almost everyday. They are highly trained to defend themselves and are equipped with protective equipment at all times. Life insurance and disability insurance are crucial for individuals working in the field of policing.

2. Airplane Pilots
Believe it or not, airplane pilots require life insurance because they are dealing with such powerful machines which have been known to have mechanical glitches. Airplane pilots are also highly trained in their field to make sure they do their best to fly safely.

3. Construction Workers
Construction workers are somewhat unappreciated for the amount of hard work they do everyday. They not only put their lives in danger from all the machinery they are expected to operate, but they also face many factors which will affect their health in the long run. Overexposure to sun, heat and excessive lifting are just a few of these factors.

4. Farm Workers
Much like construction workers, farm workers are at high risk of injury or death due to the fact that they are constantly operating heavy machinery. There are hundreds of farm work related deaths a years and thousands of injuries for individuals working in farm fields. Life insurance and disability insurance are important for individuals in this occupation.

5. Fire Fighters
It is a known fact that fire fighters put their lives on the line everyday to save the lives of others. Knowing the potential consequences and performing the job anyways indicates that these workers deserve the highest level of respect from others. Individuals who have chosen careers in fire fighting are also likely to have a life insurance policy.

Is your job dangerous? Is your life on the line everyday? May be not, but there are many other factors other than your occupation which may indicate you need life insurance.
Life insurance is a plan which will ensure your loved ones are taken care of in case anything happens to you. Wouldn’t you like to know your family would be looked after should this type of situation occur?

Useful Links

Hi friends,

Below are some useful links which I found useful in my day-to-day surfing... Hope you may find useful too:

  1. Pliggs
    Nice .... useful site
  2. WebbieStuffs
    Who knows what evil lurks in the human mind? I am struggling to be free... in thoughts and expression... in everything.
  3. Interior Design
    Everything you need to know about Interior Design. Redecorating your home made easy.
  4. NEW KERALA for India News & Information
    newkerala.com brings latest news and information on World, India, Kerala, Hollywood, Bollywood, Health, Business India, Sports India, Cricket, Travel India and Technology.
  5. Financial Freedom
    Learn The Latest Ideas And Strategies To Help You Achieve Financial Freedom Online.
  6. Option Trading For Explosive Returns
    Find Out How To Make Over 87% Profit Monthly, Confidently, Trading US Stock Options! Long And Short Term Strategies To Lead You To Your Financial Freedom, Safely, Quickly, Consistently.
  7. Free Credit Report
    Free credit reports and credit scores. Consumers' right to a free copy of their credit reports. Check your personal credit report in seconds! Learn what factors can positively or negatively effect credit reports & credit scores.
  8. Health Insurance Quotes
    We provide you with access to affordable, quality health insurance plans. We offer individuals, families and small business health insurance.
  9. Life Settlement articles and viatical assistance
    Life settlements articles. viatical assistance, viatical buying, senior life settlement, sell monthly settlement, life settlements washingtion and other states and senior settlements as well as viatical life settlement providers info site.

Thursday, July 10, 2008

When You Die, What Does A WILL Do?

I know it may sound simple, but there are things a WILL does and certain things it cannot do. Most people don't have a will and don't even want to talk about it since it relates to death. A lot of people don't even have life insurance, either. I had a boss that was speaking to his accountant one time, "If I die-"started my boss, and his accountant said, "There is no "IF", its just "WHEN". We all will die and it would be nice to have a will to help your family decide what to do with your money and belongings.

Why do you need a will? Would you rather probate courts decide the fate of your children? The court decides where the kids are sent for foster care. That should be enough to scare you out of your shoes. The court will also decide what happens to your assets. Yes, all your stuff and money. So you may have money and a nice house, then its all gone and the kids are sent to the state home.

I know, it sounds harsh. So what can a will do for me?

First, a will can indicate where your assets and property go.You can also name a guardian for your children and their property. You can also name an executor to administer the will.This executor can be given powers and compensation for taking care of your estate.

But here's the tricky part - a will can't override anything with a named beneficiary. For example, your life insurance has a beneficiary that was established at the time you wrote the policy. Also, a will can't nullify the terms of a trust you've established.

So what should you do? Inventory your assets that will pass through the will. Like checking accounts, CD's, stocks, bonds,real estate, etc. These are called probate assets. Non probate assets would include things like your life insurance. These items have named beneficiaries.

Make a list of your beneficiaries and decide what you want them to have. If you have children from your current marriage, then the decision would probably be very easy - give the items to your spouse. If you have kids from a previous marriage, plan carefully and list them as well as their relationship so the executor will have no questions and will hopefully limit anyone contesting the will.

I hope this gave you some idea as to why a will is an important planning tool not for you, but for your family. You don't make a will for yourself, as you will be dead, you make one for your survivors.

The Latest Commercial - Vaade

Hi friends,

I would like to share with you the latest commercial from TATA AIG LIFE... Its titled "Vaade", which means "Promises".

And we help you to fulfill your promises. Go ahead and plan your future and live a happy life.


Decide now so that you never fall on your promises

Monday, July 7, 2008

Waiver of Premium Rider Information

Hi friends,

Lets see the information about Waiver of Premium Rider today.

Waiver of Premium Rider is very essential if you are taking a policy for yourself and you are the chief earner in your family. By taking this rider you make sure that in case of your unfortunate death / dismemberment, before the premium payment term ends, the burden of paying doesn't fall on your family members.

Key features are listed below:

  • It provides for the waiver of all future premiums of the basic policy and this supplementary contract which fall due while the insured is disabled (provided that the disability commences before the insured reaches 60 and has continued for atleast 12 months)
  • The basic policy will be kept in force as though premiums waived were paid in cash.


Below is the annual premium rate per 100 rupees of basic premium:


Issue AgeAnnual Premium per Rs.1,000 Sum Assured
180.56
190.56
200.56
210.56
220.56
230.56
240.57
250.57
260.58
270.59
280.61
290.63
300.65
310.69
320.73
330.78
340.85
350.93
361.04
371.16
381.3
391.47
401.66
411.89
422.15
432.45
442.79
453.17
463.77
474.38
485.03
495.71
506.44
517.26
528.1
538.97
549.89
5510.86

So, whenever you go for a insurance policy next time for yourself, don't forget to apply for a Waiver of Premium Rider...

Payor Benefit Rider Information

Hi friends,

Lets see the information about Payor Benefit Rider today.

Payor Benefit Rider is very essential if you are taking a juvenile(children's) policy. By taking this rider you make sure that in case of your unfortunate death / dismemberment, before the premium payment term ends, the burden of paying doesn't fall on your spouse or your child. The company covers the life of insured even if premiums are not paid.

Key features are listed below:

  • When the payor dies or becomes disabled before he/she reaches age 60, and before the juvenile reaches age 21, all the future premiums of the basic policy and this rider will be waived upto maturity of the basic policy or the child reaches age 21 or the payor reaches age 60, whichever is earlier.
  • The basic policy will be kept in force as though premiums waived were paid in cash.


Below is the annual premium rate per 100 rupees of basic premium:

Maximum PB Benefit PeriodPAYOR'S AGE
18-3031-3536-4041-4546-5051-55
40.520.570.791.262.193.83
50.70.771.081.733.025.26
60.870.971.382.233.896.77
71.051.181.692.764.828.37
81.231.392.033.325.810.05
91.411.622.373.926.8511.63
101.61.852.744.557.95-
111.792.093.135.229.12-
121.992.343.545.9310.35-
132.22.63.976.6911.64-
142.412.884.447.4912.9-
152.633.174.928.33--
162.863.475.449.23--
173.13.85.9910.17--
183.364.146.5711.15--
193.624.57.1812.13--
203.94.877.83---
214.25.288.51---

So, whenever you go for a insurance policy next time for your children, don't forget to apply for a Payor Benefit Rider...