Max life: Success story of Madhusudan P Gad

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Do I need critical illness insurance?

Critical illness (CI) insurance is a long-term insurance policy to cover specific serious illnesses listed within a policy.

If diagnosed with a serious illness, the insurance company will provide single lump-sum payment.

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The payment is made when you survive a certain period (typically a month) after confirmation of the diagnosis.

You can buy a CI cover either for yourself or jointly with your spouse.

What is covered?

The number of critical illnesses varies from insurer to insurer. Most insurance companies cover:

  • Cancer of specified severity
  • Angioplasty
  • Heart attack of specified severity
  • Open heart replacement or Heart valve surgery
  • Surgery to aorta
  • Cardiomyopathy
  • Primary Pulmonary hypertension
  • Open chest CABG
  • Blindness
  • Chronic Lung Disease
  • Chronic Liver Disease
  • Kidney failure
  • Major organ/ bone marrow transplant

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  • Apallic Syndrome
  • Benign Brain Tumour
  • Brain Surgery
  • Coma of specified severity
  • Major Head Trauma
  • Permanent paralysis of limbs
  • Stroke resulting in permanent symptoms
  • Alzheimer’s Disease
  • Motor neurone disease with permanent symptoms
  • Multiple Sclerosis with persisting symptoms
  • Muscular Dystrophy
  • Parkinson’s Disease
  • Poliomyelitis
  • Deafness
  • Loss of Speech
  • Medullary Cystic Disease
  • Systematic lupus Eryth. w. Renal Involvement
  • Major Burns
  • Aplastic Anaemia

 

What is excluded?

  • Death within 30 days of diagnosis of CI or surgery.
  • CI diagnosed within first 90. days from the inception of policy.
  • HIV/AIDS infection
  • Illness due to smoking, tobacco, alcohol or drug intake.
  • Any dental care or cosmetic surgery

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  • Illness occurring due to internal or external congenital disorder.
  • Critical conditions or consequences due to pregnancy or childbirth, including caesarean.
  • Infertility treatment
  • Hormone replacement treatment
  • Treatment done outside India
  • War, terrorism, civil war, navy or military operations

 

What are the benefits of CI plan?

CI benefit irrespective of hospitalization

Hospitalization is not required because diagnosis is enough to get CI benefits.

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On submitting medical documents confirming diagnosis, you will receive a single  lump sum amount.

Financial support

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You can spend the money to pay for cost of your treatment, recuperation expense, clear any debts, pay your rent or mortgage, pay for medical bills or to adapt your home to your particular needs.

Tax-free payout

The one time lump sum amount paid on diagnosis of a serious illness is tax-free.

 

Protection against untimely death

In case of an untimely death, your nominee will receive the lump sum payout. However, this amount is paid only when you survive the 30 day period after diagnosis of an illness.

What to consider before you buy a CI plan?

CI plan does not cover hospitalization costs. The lump sum paid is as per your policy amount.

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So you will still require a health insurance plan to meet these expenses.

Also, the policy has well-defined terms and conditions for diagnosis of an illness.

For instance, you need to undergo specific tests, by specific physician to confirm diagnosis of the illness.

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Payout is made only for the specific illness (as per the severity mentioned in the policy). There are many illnesses which are excluded.

Do consult your financial advisor to help you understand the policy details before buying a critical illness plan.

For more information please visit http://www.fortunawealth.in

 

Pension plans

While retirement may seem distant for many, retirement security is as important as any of your other financial goals.

Due to rising cost of living, inflation and increased life expectancy, financial planning is essential to live a happy and comfortable life after retirement.

Pension plans or retirement plans are one of the tools available to build a retirement corpus.

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Pension plan provides regular fixed monthly pension at the end of the period for lifetime. Investment is made by paying premiums to build a corpus which is invested in various funds.

Insurance companies, Mutual fund companies and Government provide pension plans with unique benefits.

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For instance, Insurance companies provide pension plans with the waiver of premium rider or partner care rider.

In the event of an unforeseen calamity like death, the future premiums will be waived off.

The Insurance company will pay the future premiums on your behalf. This will ensure that your nominee receives the same pension till the end of the period.

Do consult your financial advisor to choose the appropriate plan as per your requirements.

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Types of pension plans:

Immediate Annuity

In immediate annuity, the pension begins immediately. You have to pay a lump sum amount and your pension will start instantly.

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The pension you receive will be based on the lump sum you have invested.

Deferred Annuity

In deferred annuity, pension does not commence immediately. It is ‘deferred’ up to a time, which is decided upon by you.

This implies that you have to pay the premiums till the policy term, after which you will start receiving your pension.

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Premiums can be paid as single premium or as regular premium.

With cover pension plan

‘With cover’ plan provides life coverage which implies that in case of death, a lump sum amount is paid to your family.

However, the cover amount is not very high as major part of the premium is invested to build the retirement corpus.

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Deferred annuity plans are available with cover.

 

Without cover pension plan

‘Without cover’ implies that you do not get any life cover.

In case of death, your family will receive the accumulated corpus till the date of your death.

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Immediate annuity plans are available without cover.

Annuity Certain

The annuity is paid for a specific period as chosen by you.

In case of death before this period, your beneficiary would receive the annuity.

Guaranteed Period Annuity

Annuity is paid for certain periods whether or not you survive that duration.

Life Annuity

In a life annuity plan pension is paid until death.

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If you choose ‘with spouse’ option, then in case of death, the pension is paid to your spouse.

National Pension Scheme (NPS)              

NPS has been introduced by the government. The amount you save in NPS will be invested in equity and debt.

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You have the option of withdrawing 60% of the amount at retirement and the remaining 40% has to be used to purchase annuity.

The maturity amount is not tax free though.

For more information please visit http://www.fortunawealth.in

Individual plan vs Family floater plan

Deciding whether to buy an individual health plan or a family floater policy might be confusing for many.

To help you make a better and wise decision, here is a comparison of both these plans:

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Few other points to consider in family floater plans:

  • Premium is determined according to the senior most member in the plan.

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  • When a child reaches the maximum age (usually 25 years), he or she will need to buy a new policy. All the benefits of the old policy will be transferred to the new policy.

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  • No Claim Bonus (NCB) is not given in case of claim from even one member.
  • In case of unfortunate death of the senior most member, the surviving members can continue the policy.

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  • Generally children and dependant parents are covered in a family floater plan. If you want a cover for grandparents or in-laws, you will need to buy an individual plan for them.

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A common plan for all the members in the family could be expensive.

You can save on premium by buying a family floater for yourself and dependent kids; and a separate plan for senior parents.

For more information please visit http://www.fortunawealth.in

Child education plan

Whatever path your child chooses, you would always wish his or her dreams come true.

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To realise your child’s aspirations, right financial planning for his or her secured future is very important.

What is a child education plan?

Child education plans are regular life insurance policies specially designed to meet your child’s financial needs.

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The plan provides amount on maturity for your child’s education expenses.

In case of policy owner’s untimely demise, the child will be paid the death benefit amount and all future premiums are waived off.

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The policy does not lapse, the insurance company continues to invest future premium amount on policyholder’s behalf.

On maturity of the policy, the maturity amount is paid to the child.

Do I need a child plan?

Increasing education expenses are a worry of every parent.

Higher education costs would increase drastically by the time your child grows up.

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Hence, you need to start planning for your child’s education as soon as possible. An early start would give time for your money to grow.

A child education plan will provide funds for your child’s higher education and secure your child’s future in any uncertainty.

What are the features of child plan?

  • Flexible policy term of 5-25 years
  • Premium amount as per your requirements
  • Tax benefit under Section 80C

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  • Partial withdrawal benefit
  • Mode of premium payment- monthly, quarterly, half-yearly or yearly
  • Loan on deposits
  • Pre-mature closure allowed

Most child plans are good; however, these are designed for longer duration. So are more beneficial if your child is less than 5 years old.

Even if you have missed investing in such plans, there are plans offered by mutual fund companies for older kids.

The funds are invested in hybrid plans like debt and equity which are a mix of G-Sec, bond and equity shares with moderate risk and good returns.

However, these plans do not provide insurance coverage.

Though, you can buy a separate plan for insurance coverage. Do contact your financial adviser for further details.

Types of plans

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Tips while choosing a policy:

  • Decide the amount you want to save for your child’s education.
  • Calculate the amount considering the inflation rate.
  • Choose the premium as per your affordability.

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  • You can choose a policy which gives you the flexibility to gradually increase the savings in future.
  • Opt for the payer benefit rider- your child’s education fund will be taken care in case you are unable to pay due to untimely death, critical illness or disability.

For more information please visit http://www.fortunawealth.in

Retirement planning tips

Start planning for retirement from the day you start earning- is certainly the best advice given, but is hardly ever followed.

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Retirement is one of the most significant phases of our lives.

Sensible financial planning during your working years can help you realize the dream of a happy and comfortable retirement.

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Here are few tips you can follow:

  1. Focus on starting today

If you have just realised that you need to plan for your retirement, start saving and investing as much as you can now.

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Tip: When young, you can grow your money considerably with the power of compound interest.  In such investments, the interest is paid on the principal investment and the accumulated interests of previous period.

  1. Increase investment as your income grows

You should take into account the rising inflation to build your retirement corpus.

So each time, you get a raise, increase your retirement savings too.

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Tip: Few plans have the option to increase the amount automatically- once half yearly or annually for an amount of your choice eg. Rs. 1000 or Rs. 2000 increase every month there on. Do consult a financial advisor for more such options.

  1. Diversify your savings

Your investment portfolio should be according to your age, risk appetite, liquidity, inflation, liabilities and goals.

Diversify your savings in various categories to optimise returns.

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Tip: At the age of 50 you should revisit your retirement portfolio and check the allocation of your investments.

  1. Appropriate Health Cover

Health insurance plan by your employer will cover you only till you are employed with them.

It is always better to buy personal health insurance plan including your spouse for lifetime benefit.

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Tip: Low premium, no worry of pre-existing illness waiting period, adequate cover and tax benefits are few advantages of buying a health plan when young.

  1. Pay down debts

It is easier to save for retirement when you don’t have any student debt or credit card debt.

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  1. Buy a house instead of paying rent

If you are living on rent, major share of your income goes towards rent.

Having your own house will give you a sense of security and reduce your expenses considerably.

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Tip: You can consider buying a retirement home in some other city or your native place where prices are within your budget.

  1. Life insurance

Loss of the sole breadwinner can risk the survival of any family.

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Therefore it is essential to create financial security for your family by investing in a life insurance plan.

  1. Don’t touch the money until you need it

You should avoid spending the retirement corpus so that your money can gain from the power of compounding.

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Tip: At the time of job change, rather than withdrawing your PF balance, you should transfer it to the new employer account.

Other options of withdrawing for specific purposes such as buying or building a house, your child’s marriage, or in medical emergencies should also be avoided.

  1. Contingency fund

Your retirement fund should not be used for meeting contingencies.

Build a separate contingency fund which should help you meet expenses of at least six months.

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After retirement, you can use this fund as per your needs.

For more information please visit http://www.fortunawealth.in

Accident Insurance

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Accident insurance is your safety net against accidents.

It can protect you and your loved ones financially in the event of injuries, disability or death due to accidents.

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Different insurance companies provide different scope of cover and scale of benefits.

You should therefore choose a policy as per your needs.

The types of coverage included are:

  • Accidental death
  • Permanent disability
  • Temporary total or partial disablement

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  • Corrective surgery
  • Medical expenses
  • Hospitalization benefits
  • Funeral expenses

The following are excluded:

  • Any pre-existing disability/accidental injury
  • Injuries pertaining to pregnancy or child birth
  • Self harm, self-injury, suicide or attempted suicide
  • Accidents due to participation in criminal activities such as attempted felony, riot, non-compliance, nuclear risk, terrorism, criminal acts etc
  • Accidents due to voluntarily intoxication from the influence or abuse of alcohol, drugs, or other substances.

Unlike life or health insurance policies, where the premium of the policy is based on an individual’s age and lifestyle; premium of accident insurance policies is the same for individuals across age groups.

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However, your profession does influence your premium amount. Some insurance companies do not cover aircraft pilots, its crews and other hazardous occupations under these policies.

Few clearly exclude injuries caused by risky sports such as bungee-jumping and para-gliding.

Benefits of accident insurance policies:

  • Very low premium
  • No medical check-up required
  • Easy claim process

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  • Worldwide coverage
  • Lifestyle support
  • Death/disability coverage
  • Covers increasing healthcare expenses
  • Education grant for the benefit of dependent children

For more information please visit http://www.fortunawealth.in