How Much Insurance Do I Need !!!

How-Much-Life-Insurance-Do-I-Need??Do all of us require life insurance?? My answer is "YES" Because, Health of elderly parents, Education of Children and life of Spouse are put under a big question mark when bread earner dies. Not only losing the loved ones, most of the times families get into serious financial crisis. Now the question is " How Much Life Insurance Do I Need To Secure My Family?" But first you realize that whether you need any life insurance to take. If so, then here are some parameters on calculating how much life insurance you really need.

1. Earning Power: Life insurance amount must cover at-least the earning power of the person. For Example you earn Rs.50 thousand per month then your expenses ratio would around this amount. Now if something happens, interest income from insurance policy claim proceeds must be around or more than Rs.50 thousand, considering the fluctuation in money value due to inflation.

2. Dependents: If you are young and single you do not worry much about this. Mostly liability started arise once you get married. But after marriage this is must. Your Spouse and your children or your parents requires it more in your absence, because they depends on you.  If you are only earner in the family then you need higher insurance coverage.

3. Having Loan: If you have some loan/debt then the policy coverage must be higher to cover your loan/debt amount. Imagine the situation when the person had a bulk house loan to pay and there is no earner. Remember when you have loans or other debts, consider taking a policy with higher coverage after checking your affordability to pay the premium along with EMI.

Life insurance is not necessary if you do not dependents. Having surplus resources to take care of dependents. No debts/Loan, You are single and just started earnings.

There are some basics to check it like Take all your insurance policies and calculate total insurance cover you have. Now analyze and compare it with your earning in your absence and ask yourself "will this amount fulfill / protect family's lifestyle forever in my absence". If your earning does not allow much to take regular insurance cover then go for some Term Insurance.

Calculate and take the right insurance cover for you and protect your family's lifestyle forever. 

Top Investment Idea U/s 80C

Many of us start investment only in February or March, i.e. just before the Financial Year getting over. This could be a big mistake. You may invest your money without proper planning. You may lose interest/appreciation for the whole year. Right time to start planning to invest is start of the financial year. This way you would not only make well informed decisions but also can earn interest for the whole year.

Where_to_InvestHere we will discuss about investment and tax deduction under section 80C of Income Tax Act. Section 80C replaces Section 88. Section 80C has become effective from 1st April 2006. Section 80CCC on Pension Scheme also merged with this section. Section 80C of IT Act allows certain investment and expenditure to be tax exempt. 

The maximum limit of deduction under section 80 is Rs.1.50 lakh from F Y 2014-15 / A Y 2015-16. Before F Y 2014-15 the limit was Rs.1.00 Lakh.

Most of the Income Tax payer try to save tax by saving under section 80C. Must note that under this section you can not only just save tax on investment bust also save tax on certain Expenditure.

Top Investment idea U/s 80C:-

1. Life Insurance Premium: Any amount that you pay towards life insurance premium for yourself, your spouse or your children can also be included in this section deduction.

2. Unit Linked Insurance Plan: ULIP covers life insurance with benefits of equity investments. They have attracted the attention of investors and tax-savers not only because it help us to save tax  but also give decent returns in long-term.

3. Provident Fund: PF is deducted from your salary every month and both you and your employer contribute to it. While employer's contribution is exempt from tax, your contribution will come under section 80C. This deduction is compulsory, so this has to be the first and also apart from tax saving, it builds a long term, tax free retirement corpus for you.

4. Public Provident Fund (PPF): Public Provident Fund  is one of the best investment. Interest is compounded yearly and the normal maturity period is 15 years. You can deposit minimum Rs.500.00 and maximum Rs.1.50 Lakh. Remember rate of interest may vary by govt. notification.

5. Equity Linked Saving Scheme (ELSS): This is a mutual fund (MF) specially designed to save tax. The investments that you make in ELSS are eligible for deduction under section 80C.

6. National Savings Certificate (NSC): It is good investment option with a maturity period of Five years and Ten Years. Compounded Interest accrued Half Yearly. Minimum investment in NSC is Rs.100.00 and No Maximum limit. You can withdraw NSC before maturity period in case of certificate holder. Remember Investment in NSC are eligible for deduction but accrue interest income is chargeable to tax in the same year.

7. Pension Fund: In this Section 80CCC investment limit is clubbed with the limit of Section 80C. It means total deduction limit under section 80C and 80CCC is Rs.1.50 Lakh. This means that your investment in Pension Funds upto Rs.1.50 Lakh can be claimed as deduction under section 80C.

8. Five Year Bank Fixed Deposit (FD): Tax Saving fixed deposits with tenure of 5 years are also entitled for section 80C deduction.

9. Five Year Post Office Time Deposit: This is similar to bank's fixed deposit scheme. Interest is compounded quarterly but paid annually. Interest is totally taxable.

10. Home Loan Principal Repayment : The Equated Monthly Installment (EMI) that you pay every month to repay your home loan consists of two components- (i) Principal Amount (ii) Interest Amount. The principal component qualifies for deduction under section 80C. And interest component save your tax under section 24 of IT Act. If you have taken home loan this is an automated EMI deduction cum investment. 

11. Sukanya Samriddhi Account: If you have blessed with girl child then it is for you only. You can open account under this scheme from the birth of a girl child till she attains the age of 10 year with minimum deposit of Rs.1000.00 and maximum deposit of Rs.1.50 lakh per year. Accrued interest under this scheme is fully exempt from tax in that year as well as in the year of receipts. For more you can read details in Notification No. G.S.R.863(E) Dated 02.12.2014.

Decide and Analyze which investment idea suite you to save tax and save your money with good return. Decision is yours. Have a happy investment.

Term Insurance Plan - Good or Bad Decision

Term_Insurance_Plan_Good_Decision_or_Bad_Decision
Term Insurance is a contract between Insurance Company and insured person that primary provides guaranty to pay insurance amount only in case of demise of secondary to their Nominee, If all term & condition full-filed. If demise incident does not happen then company are not liable to pay. So, before taking Term Insurance Plan, person should think and analyze the utility of it. 
Term Insurance takes your risk at very low premium with certain term & condition. Like other insurance and investment alternatives it is also simple and easy. You know the premium amount you have to pay till the policy term and insurance amount your nominee will get if unfortunate demise will happen. 
For taking term insurance to ensure your family's financial future in your absence there are certain things to know before.
First understand the Term Insurance, it is designed for providing a pay-out only in case of demise. It is not an investment option because it would not give you any return. It is not for you, it is for your family member. Only good things about it that it cover high risk amount with very low premium cost
Analyze your requirement, in case you have any loan outstanding (like home loan) and don't want to forward this burden on your family member's in your absence then it is the only best option for you. Certainly you do not want your family to compromise on their lifestyle or find difficulty in sustaining a good life in your absence. It will be big favour by getting yourself a Term Insurance Cover.
First choose the Insurance Amount you think should be enough for your family to get normal life in your absence. Now second option comes that what will be premium/installment amount. There are lot online site who will help you to compare the premium instantly. It can be vary from company to company. The best thing about term insurance  plans is that these plans  are designed to charge the same premium throughout the policy term, even though the risks increases when you grow old. So, it is better to have it in early age and reassess it in every 5 years and if fills & can able to pay premium, you can increase the cover amount you require.
Secondly before selecting any insurance company check their Claim Settlement Ratio at IRDA website. The insurance company could have rejected few claims but you should check the causes behind such decisions. Insurance company will not process a claim which is fraudulent. Choose the best one. Read Term and Conditions & understand the Exclusions carefully. It is important to know before purchase it so that you don't leave your dependents with various issues relating to your term plan in your absence.
Selecting Nominee is very important & crucial job while purchasing insurance plans. It should be a person who shall need your money the most after your passing. It can be your spouse, your parents or your child. It is advisable to keep your beneficiary informed about the key features of the policy and any changes that you decide to make about.
If you consider the above mentioned things when you are getting term insurance plan, you certainly will find the right plan for yourself.

Alerts! LIC To Their Policy-Holder

Alerts_LIC_To_Their_Policy-HolderThere are billions of people in India who have taken Life Insurance from Life Insurance Corporation of India. People have strong faith on this Corporation. So, there are lot of fraud/cheating happen with LIC policyholder by some cheater. Hence Corporation guides/ alert their policy holder in time to time about these kinds of frauds and ask to be safe with advisory.
This advisory is for all those policy holder who have any kind of policy taken from Corporation or willing to have in future.

1. Corporation always suggest to get register & enroll their policy on their portal www.licindia.in to check status with other information and pay premium online.

2. If you are paying premium thru cheques then issue infavour of "Life Insurance Corporation of India" and make it "Account Payee Only" by drawing two parallel line on top left corner or  above cheques number bar. Do not issue your cheque in other name to pay your LIC premium.

3. Before signing policy document you should read the form properly. Don't sign it in hurry. This will    keep you safe in future.

4. Do not hand over your Original Policy documents to any agent or person. Corporation do not authorise any person to collect Original Policy Document.

5. Beware ! from fictitious offers thru phone calls. It does not guarantee that if any unknown person saying that they calling from LIC then they must be from LIC. Do not entertain online policy payment on their suggestion. Check and be confirm before doing this.

6. Corporation never calls for Bonus or its due installments. They did not hire any recovery agent for collecting this.

7. LIC advice you always your net banking to pay premium thru its web portal.

For any other info please call us at :: 9958781151.


With Profit And Without Profit Plans

With_Profit_And_Without_Profit_PlansMany people who have their life insurance policy get notice that their plan is may be "With Profit" or "Without Profit". Some time they thought why certain plans are categorized like this. And wiling to ask their agent. Here are the answer.
An Insurance Policy can be "With" or "Without" profit. Life insurance companies from time to time declare bonus (profit share) on their plans. 
An insurance plans in which this bonus/profit share is passed on to the policy holders is called a "with profit" plan. Bonus are allotted after certain periodical valuations to the policy and are payable with the maturity amount.
But  in a "without profit" plan this bonus is not passed on to the policy holders. Therefore, the premium rate charged for a "with profit" plan is little higher than that for a "without profit" plan. 
The percentage of bonus may vary from one policy to another depending on the type, term and the premium of the respective policy, amount other considerations.

Do You Know Why LIC is Safe !!!

Call-LIC-Agent-Pradip-9958781151In 1956, when the life insurance industry was nationalized, Parliament directed the LIC to take the message of life insurance to every part of the country. It also directed the Government to guarantee the sums assured (including any bonuses declared) under all policies issued by, as well as those taken over by, the corporation (Sec.37 of the LIC Act).

In the Symbol of LIC Logo, there are two words.."Yogakshemam Vahamyaham" writtern in Sanskrit. This was said by Lord Shri Krishna to Arjun in Kurukshetra. It means" Your Security is My Responsibility."

Here is the proof that investment in LIC is fully secure by Central Government of India. As per Section 37 of LIC Act, "The Sum Assured by all Policies issued by the Corporation including any bonuses declared in respect thereof and, subject to he provisions contained in Section 14 the amount assured by all policies issued by an insurer the liabilities under which have vested in the Corporation under this Act, and all bonuses declared in respect thereof, whether before or after the appointed, day shall be guaranteed as to payment in cash by the Central Government" 

This is the proof why LIC is the king in insurance market. Why people of India trust more on it  than any other insurance company. You can compare here Monthly Business Report of IRDA. 

This is Trust by the People, for the People because in every PUBLIC there is LIC. No other company can guarantee you about your invested money. Can any ??

Can any company guarantee you if they become failure in insurance business that company or any other agency/governement on behalf of that company will return your all investment along with accrued bonuses.

In service of last 61 years LIC has given security to your love one in your absence about taking care by returning all investment along with accrued bonuses and other loyalty addition (if offered) or by insurance amount to the right nominee/heir. 

Over the last 60 years, the corporation has not only carried out this directive in both letter and spirit but also paid to the Government thousands of crores in the form of tax and dividend.

Read also THE INSURANCE LAWS (AMENDMENT) ACT, 2015

So, have trust and go with LIC. Call your trusted LIC Agent Pradip Roy 9958781151 / 8178662909 to book new policies. 

You can Download here LIC Act.

Register and Get Facility with LIC eService Portal

LIC has comes up with some new features with Lic’s e-service. You can register your policies at LIC portal with some simple steps and save lots of time.
Lic’s e-service is an initiative is to provide you with on demand service within a few clicks! You can now have many of the functionalities that were available only at branch office, Now it will be online at your fingertips. To avail this facility you have to get register as customer on LIC portal.
How to get Register on LIC Portal:
Register-and-Get-Facility-with-LIC-eService-PortalFirst you have to visit www.licindia.in  , click on the tab “New User “ , select your own USER ID & Password and provide all the other necessary information . Now you are a registered customer portal user.

LIC’s e-services portal for customers has come up with a lot of new facilities. Now if you register you can avail the following benefits: 


1.  Online Payment Facilities:
This facility provided to pay renewal premium dues, payment, repayment and loan interest due of loan through net banking, debit card, credit card, BHIM, UPI
2.   POLICY Schedule:
First page of policy bond which constitutes policy schedule will be displayed.

3.   Policy Status :
Basic detail of policy will be displayed such as plan, term, sum assured, date of commencement, first unpaid premium etc.

4.  Bonus Status :
     Total bonus accumulated under the policy will be displayed.

5.  Loan Status :
Present loan position will be displayed such as total loan outstanding under the policy, due up to which loan interest paid etc.

6.  Claim Status:
This option will display date of survival benefit (if any) or maturity benefit due under the policy during the policy term.

7.  Revival Quotation:
Revival quotation will be provided in case of lapse  policies.

8.  Premium Due Calendar:
Detail of premium due during the year (month wise) will be displayed.

9.  Premium Paid Certificate:
Individual policy – it provides history of premium paid under a single policy during the financial year.
Consolidated – it provides history of premium paid under all the registered own life policies of the user.

10. Claim History:
 This option will provide details of any claim paid under the policy with NEFT/  Cheque details, date of payment and amount of payment.

11.  Policy bond/proposal form image;
 Scanned image of the policy bond as well as proposal form will be displayed for enrolled  policies.
12.  Grievance registration:
Facility to register a complaint /grievance with insurer.

In future the benefits will further be enhanced. If you face any problem in registering, you may contact us/your Agent or to your nearest LIC Branch.


Effect of GST on Insurance Premium

Know_How_Much_GST_Effects_Insurance_PremiumWith  a hike in GST rates to 18% from the current 15%, the insurance sector are poised to get more expensive after July 1, 2017. The immediate effect will be the increase in premiums especially for families that own Life Insurance, Health Insurance and Car Insurance.

The existing and new insurance buyers would have to bear the updated prices. The Policy holders stand a chance to be benefited if the insurance providers get a green signal on the input tax credit benefit. Unfortunately, as of yet, it is still unclear since he Center/State GST  structure is very complex. It might create confusions and conformity for the insurance buyers and increase the administrative expenses for the insurance providers. If the insurance buyers remain confused about the GST updates, then irrespective of the increase or decrease in the prices the financial strength will adversely affected. The general insurance sector will be equally impacted. The overall outgo for health, car, and various non-life plans would be increased by 3 percent.

The Insurance policies premium represents two components - Savings and Risk Coverage. The service tax is levied specified only on the premium component. 

What GST (Goods And Service Tax) Rules says, the value of service on which the GST is levied regarding the life insurance sector shall be accordingly;
(i) The gross premium would be reduced by the amount allocated for or savings or investment on policyholders behalf.
(ii) When it comes to the single premium annual policies, ten percent of the single premium would be charged from the policy holder.
(iii) In other cases, 25 percent of the premium for the first year and 12.5% of the premium in the upcoming years will be charged.
(iv) In case the total premium paid by the policy holder is towards the life insurance's risk cover, oly the 18% GST would be levied on the total premium.

There are three types of life insurance;
* Term Insurance Plans - Basic life insurance policy
** ULIP Plans - Insurance and investment under a single integrated plan
*** Endowments Plans (including money back plan) - Life insurance policies that pay a lump sum on maturity/death or a fixed sum every month (like pension)

List of new revised rates on all insurance plans are as follows :
GST RATES : NEW RATES UNDER GST FOR
INSURANCE POLICIES
INSURANCE PRODUCTS
BEFORE GST
AFTER GST
APPLICABILITY
Endowment Plans – 1st Year
3.75%
4.50%
On 25% of Premium
Endowment Plans – Renewal Premium
1.88%
2.25%
On 12.5% of Premium
Health Insurance Premium
15%
18%
On Entire Premium
Rider Premium
15%
18%
On Entire Premium
Annuity: Single Premium
1.50%
1.80%
On 10% of Premium
Term Insurance Premium
15%
18%
On Entire Premium
ULIP (On Charges)
15%
18%
On Premium minus
Investment Amount
Vehicle Insurance
15%
18%
On Entire Premium
Travel Insurance
15%
18%
On Entire Premium

Life and health insurers will not have input tax credit as it is not available for life and health insurances ( as they are for personal purposes). Even corporate policyholders with group life and health insurance for their employees will not enjoy any input tax credit.

Life insurance provided under Government Schemes are exempted from GST;
1) Janashree Bima Yojna (JBY)
2) Aam Aadmi Bima Yojna (AABY)
3) Life Micro-Insurance product (as approved by the IRDA having maximum amount of cover of fifty thousand rupees)
4) Varishtha Pension Bima Yojna (VPBY)
5) Pradhan Mantri Jeevan Jyoti Bima Yojna (PMJJBY)
6) Pradhan Mantri Jan Dhan Yojna
7) Pradhan Mantri Vaya Vandan Yojna 
8) Any other insurance schemes of the State Government as may be notified by Government of India on the the recommendation of GST Centre.

Tax Relief For Agents

Tax-Relief-To- LICAgentLIC agents main earning is commission. So, Income Tax Department allows some relief to favour Insurance agent. But this relief is for small commission earning agent. If commission earned from LIC insurance business is below Rs.60,000/- p.a. and if no separate books of accounts maintained then the entitlement for deduction is as follows:

i) On First Year Commission - deduction is 50%  

ii) On Renewal Commission - deduction is 15%

The LIC Commission after claiming deduction was mentioned above will be included and can be disclose with other source of income for tax purpose.

The benefit of Adhoc deduction will not be available to agents who have earned total commission of income more than Rs.60,000/- during the year.

In case gross commission earned by an Agent from LIC exceeds Rs.60,000/- per annum  then, he will be not entitled for claiming deduction referred above. He has to maintain books of accounts as required under the Income Tax Act. The following books and documents are recommended to be maintained :

1) Cash Book
2) Bank Book
3) Ledger Book
4) Journal Book
5) Vouchers And Bills
6) LIC Commission Statement
7) TDS Certificates Received from LIC
8) Bank Pass Book, Cheques Book, Deposit Voucher
9) All Other Connected Documents 


LIC Agents are entitled to claim all expenses incurred for generating LIC Commission such as :
a) Salary to Staff
b) Rent for Office Premises, in case own office then maintenance for the same
c) Fuel Expenses and maintenance for maintaining vehicles.
d) Books, Publications, Periodicals expenses connected to business
e) Printing And Stationery
f) Electricity Expenses
g) Travelling / conveyance Expenses
h) Telephone / Mobile / Internet Expenses
i) Postage Expenses
j) Depreciation Expenses on Vehicles, Computers and Other Office Equipment
k) Gifts, Diaries, Calenders Expenses etc.
l) Staff Welfare Expenses
m) Any Other Expenses related to generate commission.

Health Insurance And Tax Benefit

Health-Insurance-And-Tax-Benefit
Health is Wealth or You may say Health is the greatest assets for a human being. Our overall health is severely affected by our lifestyle. Unhealthy Eating Habits, Lack of Adequate Sleep, Stress can affect our health. A Mediclaim policy acts as savior & it protect you from facing a financial crunch in a medical emergency. Since Inflation has made medical bills costlier, having a heath insurance policy is necessary as other necessities.

There are dual benefits of the health insurance. First it ensures your financial stability and give coverage against expensive medical bills and also offer you benefit of Tax Deduction under section 80D upto Rs.25,000/- to Rs.30,000/- (for Senior citizen).

In order to enjoy tax deductions along with health coverage, you need to check which policy suits you & your family and how much premium required for. The premium amount paid by you can be utilize as Tax Rebate Tool. Remember, if the premium paid by your employer, you will not be eligible for tax rebate. Under the IT Act, 1961 medical allowance is not considered as an allowance, which is exempted. 

Generally, medical allowance is confused with medical reimbursement. Medical reimbursement is paid by an employer to their employees when they submit medical bills. 

When it comes to tax planning, people generally don't consider their parent's health insurance as a tax saving tools. If you are paying for your parents health insurance, you can claim upto Rs.30,000/- as tax deduction benefit in your annual income tax return. 

Which is better Paid-Up or Surrender?

Which-is-Better-Paid-Up-of-Surrender-of-LIC-Policy !!
A life insurance policy in which if all the premium payments are complete till some specified period and insured person is free of all payment obligations and the policy stays intact until insured's death or termination by its maturity or Surrender of the policy is called Paid-Up Policy.

Life Insurance Policies usually last the insured person's lifetime or maturity period, but some some policies can be paid up completely till a specified period. Only Traditional Life Insurance Plans can be a Paid Up Policy. 

It is calculated as the ratio of number of premium paid to the total number of premiums payable multiplied by the Sum Assured value.

 i.e. Paid-Up Value = No. of Premium paid /No. Premiums Payable X Sum Assured.


For Example:  Pradip has one traditional Endowment Policy having Sum Assured Value Rs.2,00,000/- and the policy tenure is 16 years. Unfortunately Pradip did not able to continue his policy after continuing is upto 8 years full premium paid. 
Now from very next year he did not paid any due premium to make it continue, hence very next year this policy become automatically a Paid-Up policy.

Which is better Paid-Up or Surrender of Policy?
Now, Pradip has two option either he can go and surrender his policy by providing all necessary documents to the branch or let it become Paid-Up.

Also Read : How To Surrender An LIC Policy ??

A Policy can be paid-up from next premium due. Suppose I continue my policy up-to 8 years and from next year I fail to pay premium then it become automatically Paid-up to its proportionate to its  premium paid ; Payable And Sum Assured.

Every Insurance Plan has it surrender value which can be known from servicing branch. Its is approx 30% of Sum Assured in regular plan and up-to 90% in single premium plan.

If we calculate in both condition then we can make comparison itself and understand which is better. For Example you have S.A.=2,00,000/-; Tenure - 16 Years; Premium - Rs.13000 (Approx); Premium Paid up-to full 8 years.

Surrender Value : Rs.2,00,000 X 30% = Rs.60,000/-  (Immediate Payment)

Paid-Up Value : Rs.2,00,000 X 8/16 = Rs.1,00,000/- + Vested Bonus  (Payment after death or maturity)

You can decide which is better. On Surrender you will get immediate payment while on letting Paid-Up of Policy you will get after death or maturity which ever is earlier)
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