Vipin Khandelwal

Beware of the weapons of mutual fund mis-selling

April 13, 2017 by Vipin Khandelwal

“I made a couple of amazing investments today”, announced Nikhil. His voice was brimming with excitement.

Nikhil and I had recently become friends.

“OK. And what are those?” I was curious.

“I have applied to this new fund offer of Select micro cap series N. The fund house is known for its stock picking skills in this category. In this new fund too, they will pick the best of the micro sized companies. In fact, the past returns of such offers has been in the 30s.”

It looks like Nikhil was sold big time on this new fund. He himself was sounding like a fund salesman. “Is this a closed ended fund, I mean is there a lock in?” I queried.

“Yes, 5 year lock-in. But that is OK. Micro caps need that much time.” This was further proof. The AMC should actually consider hiring him.

“Who told you about this fund?”

“My bank relationship manager.”

“Oh! so you bought it from the bank.”

Buying Term Plans – A comparison of plans and key questions

April 6, 2017 by Vipin Khandelwal

You buy life insurance when you need to ensure that your family continues to live a financial worry-free life, in case you were to leave your bodily abode earlier than expected.

Term plans allow you to buy a life cover through a Sum Assured for a very low premium. A pure insurance plan without any savings component as otherwise offered in an endowment, money back of ULIP.

I have ensured that my insurance (including, life, health, etc.) remains in good shape. I bought my first life insurance cover in 2007 through an agent. Subsequently I switched to online term plans.

What is an online term plan?

Online term plan is a term plan that is offered directly to the users by the insurer through its website. It does not involve any third party sales channel or distributor and thus helps the company save on expenses too. Due to this, these term plans are offered at comparatively cheaper premium rates compared to those sold by insurance agents.

Recently, I decided to buy an additional term plan to increase my sum assured. So, I set out searching one for me.

I use this opportunity to present to you a comparison of different term plans.

The 10 ways to destroy a portfolio and 1 way to save it

April 5, 2017April 4, 2017 by Vipin Khandelwal

10 ways to destroy a portfolio - save with an advisor

As a part of my advisory, I look at investor portfolios and discuss their investment decisions. Almost every time I am surprised.

I recently looked at a portfolio of an HNI investor.

My learnings – 10 ways to destroy an investment portfolio. Read it carefully.

Incurred Claims Ratio – How useful is it in evaluating an insurance plan?

April 4, 2017 by Vipin Khandelwal

Incurred Claims Ratio - Health Insurance

I recently received a comment on my health insurance post. Here it is.

Hi,

I read up on your comparison of health insurance policies. There are 2 statistics for the Royal Sundaram Lifeline Policy:

a. CLAIMS PENDING FOR OVER 6 MONTHS (% OF CLAIMS PENDING AS OF 31 DEC 2014) which is 21%
b. Incurred Claim Ratio of the Insurer being 52.89%

1. Can you please comment on the above and how key these parameter are.
2. Also, would you continue to have a positive outlook for this policy when the ICR is this low.
3. Can we, as individuals, be confident that our claims would be successful on time?

—-

Now, there is confusion galore with all the terms used by the insurance industry. The latest one is the Incurred Claims Ratio. I believe it has been confused with the Claims Settlement Ratio.

Let’s understand the difference between the two.

Always trust your banker and other advice

April 1, 2017 by Vipin Khandelwal

The new financial year starts today. It is a day to make new beginnings.

Today, I would like to share with you all that I learnt about investing in all these years. It worked for me, I hope it works for you too.

Here’s myMaster List.

Remember, if an investment is not offering you a guaranteed return, then just ignore it. Risk is for losers. I need certainty.

ATTENTION: How did Mark Zuckerberg become so rich?

March 30, 2017 by Vipin Khandelwal

If I ask you about the biggest scam of this century, you are likely to mention the 2008 banking scam, CWG, 2G, Coal, Madoff, etc.

It’s none of these.

The biggest scam, in my opinion, is the loot of your attention. You keep giving it away to several entities constantly on the prowl to steal it from you.

The advent of mobile and the numerous free apps have only ensured that you are a captive, constantly trading your information for the FREE servings.

Frankly, there is nothing FREE. You pay with your time, with your precious attention.