Know Your Budget When Choosing Health Insurance

The latest official data shows the number of people covered by health insurance in India could be far fewer than estimated. Only 21.62 crore people, or 17 percent of the total population, were covered by health insurance at the end of March 2014, according to an article published in The Hindu in December 2014. Most often, people lay emphasis on life insurance in India and sometimes even think that it would cover for healthcare costs as well.

health insurance in India

Factors that Determine the Premium

Health insurance is one product that will help you save from financial crises in case of grave medical emergencies. But if not thought out carefully, it could well become a financial burden over time. You must budget your health insurance in order to save yourself from paying higher premiums. Insurance companies/banks sit down and after thorough calculations, determine the premium for a policy. Most banks have a base premium rate but the actual premium one pays might differ for same policy because of a host of factors that differ from individual to individual. Here are few factors that are usually considered to determine the amount of premium you pay:

1.      Age – Age of the insured is an important factor for determining the premium. Senior citizens may have to pay very high premiums, as compared to younger individuals. Premiums may also be higher for individuals above 45, since they are more likely to fall ill as they age. Also, if you buy a policy at 30, its premium increases as you move from one age bracket to another. Likewise, you may have to pay higher premiums for the same policy after you cross 40.

2.      Pre-existing Illnesses – People with pre-existing illnesses are usually charged a higher premium. Such illnesses might also not be covered by the policy for the first few years.

3.      Sum Assured – The higher the sum assured, the higher the premium. Determine the optimum amount of cover you need, current financial status and future financial goals before deciding on the sum assured.

4.      Type of Policy – Family floater policies tend to have higher premiums than individual policies, since they offer cover for many people under the same plan.

5.      Personal health – Personal health of the insured is an important factor that determines the premium. This may include lifestyle habits, such as smoking. Premiums are generally higher for smokers.

You can also seek advice from a financial planner in order to budget your health insurance plan and get the most suitable deal possible. Also consider buying health insurance online, since online plans tend to be cheaper than their offline counterparts.

Demystifying Investment Management, Portfolio Management

Investors all over the world have long known that all their eggs should never be put in one basket. To further underline the case for diversification, an article in Forbes, published in February 2015, showed how big and small investors alike who failed to appropriately diversify, found themselves caught up in the “financial hurricane” of 2008-2009. In fact Fidelity Investments explains that the main objective of diversification is not to ensure better performance for your investments but to improve returns for your specific level of risk tolerance. This is where investment management services and professional services for portfolio management and share trading in India come to the rescue. However, many of us are filled with doubts and uncertainties when we think of enlisting professional services. To help you make an informed decision, here are the answers to the most commonly asked questions in this arena.

portfolio management

Top 3 Investment Management FAQs Answered

1.    Why do I need an investment manager?

To ensure financial security for yourself and your loved ones and to plan effectively for life post retirement, you need to invest today in the right vehicles. However, how do you know what options are best suited to your risk appetite and your financial goals? This is where an investment manager comes to the rescue. An experienced investment management professional will be well versed in the best strategies for investment, while keeping himself/herself updated on the market situation at all times. They have the still to analyses your current finances and then help you choose the best assets or options for share trading in India, in accordance to your life goals. They also maintain utmost discretion while handling your finances and monitor progress to ensure that you get the maximum benefits.

share trading in India

2.    Why would I need professional investment management?

With the unprecedented amount of information and financial calculators available online, one might wonder why professional investment services are still needed. The reality is that research demonstrates that the track record of individual investors is far from encouraging. Professional investment managers have both the skill and the experience that a layperson might lack. They will be able to see loopholes, assess your risk tolerance and suggest the best options for you depending on your life goals. In addition, they will take care of all the legalities, while ensuring that your tax exposure is minimized. Also, investment management services are well worth the fees, given that they will continuously monitor and modify your portfolio to bring you the best results, while all you need to do is lay back and enjoy the benefits.

3.    Are my assets safe from theft, unauthorized withdrawal and custodial bankruptcy?

Although your portfolio manager would have the discretionary authority to invest assets on your behalf, they do not have the actual physical custody of the assets. All your investment holdings will be kept sage with the bank or financial institution. This adds a layer of security since the custodial responsibility is segregated from the management of the portfolio. You retain the right to grant power of attorney to those you whom you want to give access to your assets. In addition, the best financial institutions will also have their own risk management system and internal control that ensure that there is no unauthorized access to your assets.

Why Invest In Mutual Funds?

Timely and Smart Investments Can have Lasting Positive Impacts

Showing a strong surge in retail investor interest, mutual fund industry has seen the number of its new Systematic Investment Plans grow by 18 per cent to 73 lakh at the end of March 2015, according to an article published in NDTV profit in April 2015. Mutual funds investments are considered to be one of the most contemporary, low-cost, hassle free, transparent and regulated products that help to deliver superior returns as well as save taxes. It is managed by the expert fund managers who have years of expertise in stock markets.

How to Invest Smartly

Indians have traditionally adhered to invest in gold and fixed deposits in order to grow their wealth. Being high on risk, stock market investments also offer higher return. Although insurance maybe a great product that offers financial cover in times of need but it is not enough. With rising inflation and changing lifestyle, it is essential to plan your financial future in such a way so that you are able to maintain your standard of living. Building wealth is one way to do so. When you invest, your money helps you earn money.  Here the top steps to help your wealth grow.

1. Start Early – Warren Buffet who is considered to be the most successful investor of the 20th century bought his first stock at a tender age of 11. The push behind why to start early is because compounding is at play. The more time you give your investments to mature, the more you reap.

2. SIP – SIP or Systematic Investment Plans lets you follow a discipline in investing. You can invest small amount of money under SIPs. Investing in a good quality mutual fund in India through SIPs is one of the surest ways to ensure that you do not miss on investing and remain regular. With increase in income, you can increase the monthly investments over time.

3. Long-Term Investing – One of the golden rules of gaining from investments is investing the smart way. Often investors withdraw their money from a certain fund too soon to give it time to grow and reap returns. Invest your money in any fund on long-term basis.

4. Review Regularly – Review your investment portfolio regularly. See how a certain fund is performing. Also, withdraw your money from a fund if it has not been consistently performing poorly.

5. Understand your Investments – It is not wise to park your money in any mutual fund that you have heard of. Analyze the fund yourself, assess its past performance, understand the risks and then decide whether to invest in it.

In order to choose an investment strategy that works for you, you need to analyze your risk profile. The younger you are, the more you can afford to invest in risky ventures. Over time, when you develop confidence in your finances and have begun to meet your goals, you can choose to bifurcate your investments into those that yield fixed returns. If you follow these tips on smart investing, you will be well equipped to ride the bull into financial stability and a secure future.