Thursday, September 12, 2013

All LIC of India plans are Closing by 30th September, Invest now for better returns & Free Risk Cover

Quite a few LIC products which are exceptionally accepted and striking for customers for risk cover, particularly in terms of ROI in the form of tax free maturity value and periodical money back. At present, they are most sold insurance plans having 75% market share as compared to 21 other life insurance companies. These products are bread and butter for LIC. For Customers they are simple to understand plan which covers them for longer term and gives them free risk cover even after the maturity. There are certain plans which give periodical money back from LIC. Due to past record and fast claim settlement customers have good faith with LIC.

All this will change from 1st OCT 2013 and LIC will introduce new plans. All premiums will attract 3.09% Service Tax. In simple terms customer has to pay higher premium and less returns. Also Customers has to furnish more details, family history etc in their new 10 page proposal form.   

Customer’s had a mixed reaction with many of them would like to invest in PPF for tax saving rather than LIC plans, if this rules are imposed.

I would recommend customer’s to plan and buy your insurance products now and reap the benefits of high yielding recurring money back payouts from LIC. Please avoid last minute rush and get the best out of this plans.

Saturday, January 5, 2013

LIC's New Jeevan Nidhi Plan

LIC's New Jeevan Nidhi Plan is a conventional with profits pension plan which provides for death cover during the deferment period and offers annuity on survival to the date of vesting.

1.Eligibility Conditions and Other Restrictions(For Basic Plan):
a) Minimum Basic Sum Assured: Rs.1,00,000 under Regular Premium policies
    Rs.1, 50,000 under Single Premium policies
b)  Maximum Basic Sum Assured: No Limit
      (The Sum Assured shall be in multiples of Rs.5000/-)
c)  Minimum Entry Age: 20 years (nearest Birthday)
d)  Maximum Entry Age: 60 years (nearest birthday)
e)  Policy Term: 5 to 35 years
f)  Minimum Vesting Age: 55 years (nearest birthday)
g)  Maximum Vesting Age: 65 years (nearest Birthday)

2.Payment of Premiums:
Premiums can be paid regularly at yearly, half-yearly, quarterly or monthly (through ECS only) or through SSS mode over the term of policy. Alternatively, a single premium can be paid.

A grace period of one calendar month but not less than 30 days will be allowed for payment of yearly or half-yearly or quarterly premiums and 15 days for monthly premiums.

3.Sample Premium Rates:
Following are some of the sample premium rates (exclusive of service tax) per Rs. 1000/- S.A.:

Single Premiums
Age at entry
Policy term


Annual Premiums
Age at entry
Policy term


4. Mode and High S.A. Rebates:
Mode Rebate:
Yearly             -        2% of tabular premium
Half-Yearly      -       1% of tabular premium
Quarterly         -        Nil

Sum Assured Rebate:
For Regular Premium policies:
Sum Assured                   Rebate
1, 00,000 to 2, 95,000         Nil
3, 00,000 and above          2%o S.A.

For Single Premium Policies:
Sum Assured                   Rebate
1, 50,000 to 2, 95,000         Nil
3, 00,000 and above          5%o S.A.

If premiums are not paid within the grace period then the policy will lapse. A lapsed policy can be revived from the date of first unpaid premium and before the date of vesting by paying all the arrears of premium together with interest within a period of five years, subject to submission of satisfactory evidence of continued insurability.
The Corporation reserves the right to accept at original terms, accept at revised terms or decline the revival of a discontinued policy. The revival of discontinued policy shall take effect only after the same is approved by the Corporation and is specifically communicated to the life assured. Accident Benefit Rider, if opted for, shall be revived along with the basic plan and not in isolation.
6.Policy Loan:
 No loan facility will be available under this plan.

7.Service Tax: 
Service tax, if any, shall be as per the Service Tax laws and the rate of service tax as applicable from time to time.
The amount of service tax as per the prevailing rates shall be payable by the policyholder on premium(s) as and when the premiums are paid.

8.Cooling-off period:
If the Life Assured is not satisfied with the 'Terms and Conditions' of the policy, he/she may return the policy to the Corporation within 15 days from the date of receipt of the policy stating the reason of objections. On receipt of the same the Corporation shall cancel the policy and return the amount of premium deposited after deducting the risk premium, expenses incurred on medical examination and stamp duty.

Suicide: This policy shall be void if the Life Assured commits suicide (whether sane or insane at that time) at any time within one year from the date of commencement of risk and the Corporation will not entertain any other claim by virtue of this policy except to the extent of a maximum of 90% of single premium paid excluding any extra premium (in case of single premium policies).

Monday, December 24, 2012

Komal Jeevan from LIC

Komal Jeevan is a traditional insurance plan for financially securing child’s future. Komal Jeevan has the typical bonus additions. You can also opt for waiver of premium benefit if required.  The payout begins in phases so you can use the amount as per your emerging needs.

LIC Komal Jeevan Review

Plan Name: Komal Jeevan
Category: Traditional Participating Plan
Objective: Financially Securing Child’s Future

Major USP of LIC Komal Jeevan

Periodic Payout
Bonus Additions
Waiver of premium rider available

Eligibility of LIC Komal Jeevan

Minimum Entry Age: 0 for child
Maximum Entry Age: 10 for child
Policy Term: 8-18 Years
Minimum Sum Assured: 100,000
Maximum Sum Assured: 2,500,000

What benefits does LIC Komal Jeevan offer?

Money Back:
A specified % of Sum Assured will be paid in intervals after your child turns 18.

Maturity Benefit:
On maturity, Sum Assured along with all accrued bonuses and guaranteed additions will be paid

Death Benefit:
Sum Assured along with vested bonuses and guaranteed additions will be paid. . If the risk cover has not started, the premiums paid will be returned.

Compounded Reversionary bonuses and terminal bonus if any shall also be paid.

Waiver of Premium:
You can opt for waiver of premium rider by paying additional nominal premium.

Are there any tax benefits?

Under Section 80C you can avail tax benefit, yearly premium (not more than 1lac) will be deducted from taxable income.
Under Section 10(10D) death claim is completely tax free.

What else should I know about?

Paid up Sum Assured: After three policy years if you are unable to continue policy, you can convert to paid up. The policy will not participate in future performance. On maturity or death, reduced Sum Assured with guaranteed addition and any vested bonuses if any will be paid.

Surrender Value: In case you want to cancel Komal Jeevan after 3 years, the minimum guaranteed surrender value before risk cover is equivalent to 90% of all premiums paid barring the first year premium. After the risk cover, the guaranteed surrender value is 30% of all premiums paid plus 90% of premiums paid before commencement of risk.

Free Look Period: Komal Jeevan plan can be cancelled within 15 days of receiving the policy contract. A written application can be submitted to any branch for the same. The premium will be paid back minus some charges like stamp duty, medical reports.

Sunday, December 23, 2012

Great tax saving funds

With options ranging from PPF and NSC to insurance policies, pension funds and infrastructure bonds, one product stands apart.
The Equity Linked Tax Saving Schemes offered by mutual funds not only give tax concessions, but also earn handsome returns. Let's find out why they make sense.

Smart tax-saving solutions
ELSS are the mirror image of diversified equity funds. That means the fund manager will invest in shares of various companies across various industries. There is the added tax benefit which a normal diversified equity fund will not have.
Under Section 88 of the Income Tax Act, you can get a tax rebate on investments in tax planning investment schemes. Investments in tax planning equity funds is limited to Rs 10,000 per year. This may not save much tax but over the long haul, these funds can generate huge returns and actually result in decent savings.
Not convinced? Look at the returns.
In the three years ended February 7, 2005, tax planning funds generated 42.58% annualised.
Since they invest most of their money in equities and equity-related instruments, this is a more risky tax saving option compared to the others.

These funds have a lock-in period of three years. Much better when compared to the lock-in periods of four and 15 years of NSC and PPF respectively.
The dividends earned will be tax free. When you sell the units of these funds, you can avail of the long-term capital gain for which there is no tax.
View the three year lock-in period as a benefit. Because when you invest in equity, you must take a long-term view. The real potential of equities starts to show only after a few years. This allows you to ignore the short-term slumps and stay invested for the long haul.
Also, the lock-in gives fund managers the freedom to take sector and stock bets, which they are not able to do in the regular equity schemes.
Which one should you pick?
Before we go on to that, we would like to explain a term: market cap. You will come across it quite often as we talk of fund managers investing in large cap, small cap and mid cap.
Market capitalisation = Market price of the share x The number of shares in a company
Large cap = Companies with a market cap of over Rs 1,500 crore (Rs 15 billion) 

Mid cap = Those between Rs 25 crore (Rs 250 million) and Rs 1,500 crore (Rs 15 billion)
Small cap = Those less than Rs 25 crore (Rs 250 million)

Franklin India Taxshield

There's a good reason why this fund is still the largest in the tax planning category despite an average performance in the recent past. It has a great long-term performance, a focused approach and a large-cap orientation. It has kept away from the dangerous charm of mid- and small-cap stocks. This is why it has failed to match the returns of some of its aggressive peers.
The fund has largely followed a buy-and-hold strategy. For instance, ITC, HPCL, SBI and Infosys have found a permanent place in the portfolio since 2000.
The fund may not look flashy right now, but it is definitely a matured player.
HDFC Long Term Advantage

The fund's outstanding performance over the long term has seen its corpus (total portfolio) increase 12 times in the last two years.
Starting as a large-cap oriented fund, it soon realised the potential of mid- and small-cap stocks and increased weightage to these two types of stocks in August 2002. The fund ended that year as the hottest fund in the category.
The exposure to these two sectors increased to over 80% in 2003 and 2004 and ended the two years as the third best performing fund in the category.
Overall, the fund is a strong contender for one's portfolio.
HDFC Tax Saver

You can't afford to ignore this fund. An ability to perform in a booking market and guard the gains in testing times makes it special. It demonstrated its real worth in the bearish markets of 2000 and 2001 when the market slumped.
The fund ended 2000 with a gain of 5.74% when the average losses of its peers was 22.58%.
The year 2002 was the only tough patch in the otherwise sparkling track record of the fund. But the fund has never since looked back. Exposure to mid- and small-caps has gone up 43% in December 2003 to 71% in December 2004.
HDFC Tax Saver deserves a position in all equity portfolios.
Prudential ICICI Tax Plan

Though this fund has been one of the most volatile in the recent past, it has rewarded its investors quite well.
It has been extremely lucky with its stock selection.
The fund manager takes long-term calls and bets on small- and mid-caps, which provide better returns than large-caps, although the risk is higher. So far, the stock picking has been impressive.
For investors, volatility remains an issue, but it could even out over three years.
This fund deserves a second look.
Sundaram Taxsaver

Earlier, Sundaram Taxsaver was a conservative player and a middle-of-the road performer.
It would neither zoom exceptionally in rising markets, not tank in bad times.
But things changed after December 2003. The fund increased its exposure to mid and small caps considerably. It has since maintained an average 66% allocation to them -- and the result is evident in the fund's performance.
The fund is now one of the most volatile in this category. But with no single stock crossing 5% of the portfolio, diversification would take care of the excessive volatility.