ULIPs- More than a Cover

ULIPs- More than a Cover

Insurance is seen as protection for one’s family against financial uncertainties that may result due to unfortunate demise or illness.

Insurance can also be used effectively as an investment vehicle. Proper planning can help minimize the drain taxation can have on your business or estate. Planning means you choose how your assets get allocated. It involves a step-by-step approach and ensures that you receive only expert advice. The result could be a plan customized just for you.

There are a variety of life insurance products specially structured to provide targeted benefits including - Unit Linked Insurance and Pension plans that offer equity linked returns.

Some Financial Goals that you can meet through Unit Linked Insurance and Pension plans:

Build a legacy – for yourself and your family!

The primary purpose of life insurance is to provide for dependents on death of a primary wage earner, but life insurance can also serve as an outstanding tool for transferring wealth to the next generation.

You could select from a range of Plans available depending on how much you want to invest. Starting now, will help you create a sufficient wealth pool for you, your immediate family today and for their future generations! What’s more, you can use a life insurance strategy to build a fund that grows on a tax-sheltered basis.

Build a fund – for your golden years!

During the golden years for your life, sit back and enjoy what you have created! Start investing today and relax during your golden years. At such a time, this tax sheltered plan can be useful to provide a tax-free income* through partial withdrawal* facilities.

Secure your family – financial security for your loved ones!

In event, of some unforeseen events like Critical Illness or death, these plans provide for your dependants.

Some Features of Unit Linked Insurance Plans:

Grow your savings

• An investment opportunity by providing a choice of thoroughly researched and selected investments.
• You can choose from fund options based on your investment needs and risk appetite.

Flexibility: Option to switch between funds anytime during the policy term*

Security: You have given your family the very best. There is no reason that they should not get the very best in the future too. With an insurance plan, you can ensure that. your family remains financially independent, even if you are not around.

Waiver of Premium benefit: Some Unit linked Insurance plans offer this benefit. This means that in case of death during the policy term, the family will get the sum assured immediately.

Thereafter all the future premiums being paid by the Insurance Company on your behalf and at maturity again you will get a lump sum fund value . Hence your family’s immediate and future financial needs are taken care of.

Source - HDFC

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IRDA advises changes to rural, social obligations

Hyderabad: The Insurance Regulatory and Development Authority (IRDA) has advised amendments to Obligations of Insurers to Rural or Social Sectors Regulations, 2002. The amendments also give for alignment of obligations with the IRDA (Micro Insurance) Regulations, 2005. As per the Gazette notification hosted on IRDA's Web site, the rural obligations after the sixth financial year for a life insurer should have 18 per cent of the total policies written direct in the seventh financial year, followed by 19 per cent in the eighth and ninth financial years and 20 per cent in the tenth financial year. All insurers should give cover for 25,000 lives, 35,000, 45,000 and 55,000 in the seventh, eighth, ninth and tenth financial years of operation. In the social sector, LIC should give cover to 25 lakh lives each from 2007-08 to 2009-10. The general insurers should have 6 per cent of the total gross premium written in the rural sector during 2007-08 followed by 7 per cent up to 2009-10.

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Retirement plans

Retirement plans? A list of what all you need

Retirement planning is a big concern for every one. You always pray for a smooth transition with family, friends and also, enough funds.

In the 1950s, Abraham Maslow put all this in form of a theory, popularly known as the "Hierarchy of needs". In brief, it basically addresses the issue of "survival to self-actualisation".

The first step in Maslow's ladder is "psychological needs" that dominate our lives. These include our basic needs of food, clothing, shelter and others. Once these basic needs are taken care of, we move to our next set of needs, called "safety needs." We need protection, stability and of course, a society which has proper law and order.

After that comes the need for belonging through family, friends and community. And then, there is the need for self-esteem, which comes through status, fame, dignity and ability to influence decision making in the family or community. All the above four needs called "deficits needs."

The last need is popularly known as the "need for self-actualisation." Seldom can one satisfy this last need. It is the endless drive to be all that we "can be" or "can achieve".

Similar to the working person, even the retirees follow the same hierarchy of needs. The first and basic retirement need is food, clothing and shelter. Retirees - like all of us - have the fear of survival. Will my wealth outlive me or will I outlive my wealth is the question that they ask themselves. This basic need can get satisfied with the creation of retirement corpus.

Once the basic need is satisfied, next is need for security and protection. Here we are not just referring to physical protection but also financial protection. Most retirees choose debt-based instruments, as they give security of principal (though it loses to inflation.) Pension system is one form of security for retirees.

The next is a system where they will be safe. With the growing instances of physical assault, thefts and murder on senior citizens on the rise, the issue has to be jointly being addressed by police, government, society and community.

Retirees seek love and warmth of family, friends and society. In the Indian society, elders are a part of the family. Beyond family members, today there are a large number of formal and informal community/activity centres where the retired can meet and spend time together. The sense of belonging is going to be addressed by such centres.

There is a serious requirement of specialised colonies that will cater exclusively to the needs of the elderly. These colonies will need to have several facilities like basic health care, round the clock security and recreational activities. Also, they have to address basic and safety needs.

However, as of now, Indian companies are not aggressively coming out with specialised products like accommodation and insurance for the retirees. This is primarily because we are still living in the world where it is assumed that the retired would not have corpuses to fund these products.

The next generation of retirees would definitely have better corpuses, encouraging companies to create specialised products for them. The retiree of today has more money power than what his parents or grand parents had.

They are very status conscious and seek a lifestyle. The ultimate need of self-actualisation can be addressed by giving back to society by using their skill set.

Retirement planning is not restricted to a mere number. It is more to do with satisfying the needs of the person. And since they are not all financial needs, one will need to understand that a great corpus is just not enough.

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