So you had an LIC endowment policy which you have surrendered and are now wondering if you have to pay any tax on the same or not.
Or, you have a pension plan from ICICI Pru, HDFC Life and others which was not making money for you. You were naive then to buy into it but not any more. Better to put it in a more rewarding investment.
But do you know, what is your tax liability on the same?
The world of insurance sales is murky and it gets proven every day. Here’s one more.
A reader recently emailed to me that his son had taken up amongst other insurance policies:
New Endowment plan with profit : Sum Assured 14.95 lakhs, started 2016, yearly premium is Rs. 40,836
New Endowment plan with profit : Sum Assured 8.55 lakhs, Table &Term is 814 & 30, started 2016, yearly premium is Rs. 27,067
It has been told by the well known agent that, this is a “Magic plan for retire & enjoy” which is a combination of LIC plans specially researched to meet the objective of securing a financially independent life assured and his/her spouse on retirement. and the net annuity will increase every yr. to take care of inflation approx. @ 9.00%.
It is relevant to point out a few words from the message:
First things first. I was not sure about the well known agent thing. As I replied with my observations, he mentioned to me again that the agent was MDRT, USA.
He did so multiple times suggesting that he considered it as some sort of an certified authority, in this case, in insurance.
It’s time to break the myth.
The pressures of business can be huge and it can make you do things that bring serious damage to your reputation and credibility.
As you know, Max Life insurance is soon to be merged with HDFC Life insurance, leaving only the latter as the bigger company. I believe as a part of the mandate, Max Life has gone on an offensive to ensure that maximum active premium paying customers are transferred to HDFC Life. Who doesn’t want a fatter pot?
In the past 6 months of this pursuit, the insurance company has made my life difficult. I endured it so far. But this time what it doled out to me is appalling. I am worried as to how many customers might be falling for it.
As for you – beware!
Here’s the story.
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.
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.
Read more: How much life insurance cover do you need?
I use this opportunity to present to you a comparison of different term plans.
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?
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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.
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.