Spend, Save and Invest Smartly
You must have heard the famous saying " Haste Makes Waste ". Are you always on the run in life? .You want things done fast and are always on the move. You have a motto which says " Now And Immediately ". You have just grabbed that business deal and you are in a hurry to launch your next line of products. At the end of a tired evening you find that insurance agent holding that policy document asking you to sign it. You are as usual in a great hurry and you ask him to fill up the form with all the relevant details for that insurance policy himself?At this point of time it would be wise to remember the famous saying " If You Want A Job Well Done Then Do It Yourself ". What would happen when you went to make that claim on your Participatory Endowment Policy .Would you not have to run from pillar to post in your moment of crisis when the last thing you would want is for your insured amount to be held up because of the wrong details filled up in your insurance policy? ? I would like to remind you that the team of Financial Planners at Moneymindz.com are always there for you to plan your life insurance needs in a most effective and efficient manner. You can explore this unique Free Advisory Service just by giving a missed call on 022 6211 6588.
You find your doorbell ringing one Saturday morning and your friendly insurance agent at your doorstep. He spends half the morning extolling the virtues of that Whole Life Insurance Policy and the Unit Linked Insurance Plan. You are so taken up by his words that you are tempted to reach for that pen and sign that cheque immediately? "Hold On". "Be Prudent" .Spare a thought whether you really need that policy. If you are a young 30 year old healthy male why would you need this kind of a policy at all. You would need a term insurance policy as the time you are financially vulnerable the most is during the age group of 25-40 years. Later on in life you would have sufficiently large savings to tide over a financial crisis. "Always Take Care Of Your Needs When You Purchase That Policy And Not The Commissions Of The Insurance Agent ".It would be good to remember the saying " Necessity Knows No Law ".
You might be thinking that you can get a cut on your premiums by not disclosing some necessary details which you think can go against you. You may be huge and bulky in size but have no fear, the insurance agent sees far more than this. In many cases insurance companies glean for personal details and are privy to certain personal information about you by studying your habits over the Social Media. If you are extremely healthy and have the perfect body but take time out for gliding, adventure sports and mountaineering or you frequently travel to so called conflict spots or war zones in the Middle East or Africa then you would be surprised to see those premiums of yours rocket upwards. In some cases you could also be denied that insurance policy. So Don’t Be Surprised If You Find That Insurance Agent Politely Smiling At You. He may be knowing much more about you than you think he knows.
You must be knowing that when you visit the sweet shop the friendly salesman gives you a piece of different sweets to taste or those samples of chocolates to prod you to make that purchase .Ever Wondered Why This Is Done? This is to entice you to make that purchase and tempt you to loosen those purse strings of yours. You need to remember that all insurance policies have a free look in period during which you can cancel that policy if you are not satisfied with it .Just as when you order those brand new pair of shoes online and you are not satisfied with it you send it back asking for a replacement. In a similar manner you can cancel that insurance policy if you are not satisfied with it during the mandatory free look in period of 15 days. This is to conform to IRDA Rules and Regulations. You need to study these policies like a hawk during the free look period .If you are not satisfied you can cancel this policy or you can ask for a replacement. The insurance agent is well aware of this and uses the delaying tactics by not sending you the relevant documents within the free look in period so that you can study that policy. If you suspect that the agent is stalling or playing for time immediately cancel that policy .Always remember " A Good Anvil Does Not Fear The Hammer ".
You must have seen how your insurance agent persuades you to take up that ULIP Policy extolling its virtues to you. He appeals to your logic by stating the benefits of the two in one policy. Two In One? Yes both investment as well as mortality cover. But is it the right logic? Let us consider that you are 30 years of age and take a Participatory Endowment Policy with a sum assured of INR 10 Lakhs for a maturity period of 10 years. The premium for this policy will be INR 1.1 Lakh per annum. In this case the premium is high as it provides twin benefits mainly both mortality cover and maturity benefits .If you die within the stipulated 10 year period you will get the assured amount of INR 10 Lakhs. If you outlive the policy you will get the sum assured of INR 10 Lakhs along with 10% of the sum assured and you can assume a bonus declared of INR 4 Lakhs based on the profits. The maturity benefits are 15 Lakhs .Do you think this policy is a good one for you? You are paying 11 Lakhs as a sum total of premium and you are getting 15 Lakhs after a period of 10 years. Let us consider you take a level premium term insurance policy with a premium of INR 3000 per annum for a term period of 10 years with a sum assured of INR 10 Lakhs. The sum total of premium is INR 30000 for a level term insurance policy. The remaining amount you can invest in a good equity mutual fund through a monthly SIP of INR 9000 for a period of 10 years .This translates to an amount of INR 10.8 Lakhs for a period of 10 years and the combined premium of your term insurance plan is INR 30000.This is a total of INR 11 Lakhs. In a period of 10 years there will be a huge change in the value of NAV of the mutual fund from say INR 25 to INR 280 and the number of investments is 121.This is basically one investment per month for 10 years .Due to a gigantic growth in the stock market in the last decade an increase in NAV can give you returns of INR 27 Lakhs. Do You Still Think That The Two In One Option Provided By That Insurance Agent Is Good?
You must have heard of the term insurance churning. So what does it mean? Let us consider that you have taken a participatory endowment policy which has generated you a cash value. The insurance agent uses these proceeds to purchase another insurance policy not caring whether this is in line with your financial goals. Of Course he gets a commission on your purchase of this new insurance policy .Many times you would trust your insurance agent as he has recommended policies for a number of your family members. This trust causes you to be casual in your approach to that insurance policy and lose track of your financial goals .Many a time this trust is misused by the insurance agent who replaces your existing policy with a new policy in order to pocket the commissions and resorts to an illegal practice called insurance churning. Remember that it is not in your interest to see your Whole Life Insurance Policy replaced. If this has happened to you " Check To See If You Have Been Churned ".
Why do you take an insurance policy? Is it not to ensure the well being of your loved ones? Imagine if you had forgotten some minor detail and this resulted in your loved ones running from pillar to post when you would not be in a position to help them? Frightening isn’t it. Would You Like To Leave The Fate Of Your Little Ones To Chance? If not then you surely need to take time out to fill up those insurance policy details yourself. So Why Should You Not Allow That Insurance Agent To Fill Up Your Insurance Policy Details? Insurance Agents are Businessmen and their priorities are top most in their set up? Why would they care for your needs? Just like as all other things in life you need to look after your own needs. The Insurance Agencies maintain very high standards when it comes to checking and processing your claims and a thorough investigation is done before your claim is settled. It is very important for you to do all that is in your power to get that claim and you must start by filling up that insurance policy form yourself.
• Never think you can get away by fooling that Insurance Agency. They have been in business for many years and have seen all kinds of policyholders and situations .Every time a failure occurs in their system the loop holes are plugged .Do you smoke or drink? Are you into adventure sports or rock climbing? Are you into action stunts or a frequent traveler to war zones in Iraq? Do you have more than one insurance policy? Remember insurance companies require you to mention all the relevant insurance policies you have taken. Hiding of these details may lead to your claim being rejected or a lesser amount sanctioned when there is nothing you can do about it.
• Once you have decided to take up that insurance policy read the terms and conditions very carefully .Fill up all the relevant details such as family history, names and addresses of nominees in an accurate manner and avoid spelling mistakes .Spelling mistakes can prove costly and can hit you where it hurts the most .Mention all relevant details and if you drink or smoke mention it. Never leave any column blank or empty as it has been made for a purpose .Ask your insurance agent for help if you cannot understand any points mentioned in that policy.
• You must be knowing that most of the people ask the insurance agent to fill up that insurance policy form and just sign on the dotted line. This is a very dangerous practice as the insurance agent is also a human being and he could make mistakes. Always cross check the policy form after it has been filled by the insurance agent. You need to remember that the insurance agent would not like to displease his client and he might not disclose certain relevant details which might lead to your claims being rejected. One of the glaring omissions is the failure to mention the taking up of other insurance policies which might result in your claim being rejected. The insurance agents main priority is to please his client and collect his premiums. Your priorities don’t even exist on his radar.