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Chat Transcript

| 24 Mar - 01:00hrs

Know more about best insurance policies

 

Ramalingam K | Director & CFP, holisticinvestment.in.

guest: Term Life plans, Money back plans, Endowment plans, Whole life plans? which is best
Ramalingam K: Hi, It is not advisable to mix insurance and investments. Pure term insurance plans are better than endowment,money back and whole life. Combination of term insurance and mutual fund sip or ppf can deliver better returns than endowment or ulip.
guest: Which is the best health insurance policy?
Ramalingam K: There is no health insurance policy which is right or everyone. You need to choose your own right health insurance plan. 1) You need to first assess your requirement.. the coverage amount, coverage hospitals, 2) You need to understand what is covered and what is not covered in the policy 3) Check for things like total premium to be paid, deductibles, co-payment, upper limit for certain expenses like hospital room, out of pocket expenses. These factors will help you choose the right plan for you
guest: which travel insurance policy can i buy? i travel frequently..
Ramalingam K: You can buy TATA AIG travel insurance policy. It is advisable to get multiple trip policy or a business travel policy since you are a frequently travelling.
guest: CAN YOU TELL ME THE BEST PENSION PLANS AVAILABLE WITH A SINGLE ONE TIME PREMIUM?
Ramalingam K: I dont advocate for readymade pension plans available in the market. Instead of that, you can create a retirement plan with a combination of different good schemes available in the market, FDs, mutual funds, bonds... A customised retirement plan is more flexible. You can withdraw more if required. You can customise your withdrawals to adjust for inflation. SO i suggest you to create your own customised retirement plan with a mix of schemes.
guest: Where does the insurance premium get invested...stock markets or real estate or both?
Ramalingam K: The insurance premiums are invested depends upon the policy type. If it is traditional policies like endowment, money back they will invest in fixed income yielding securities like govt.bonds, debentures etc. If it is an uilp policy they will invest in stock market as well as debt market depends upon the scheme type. Since real estate is an unregulated market they won`t invest in real estates.
guest: i want to invest in mcx gold. At which rate i should buy. i can hold position for 6-9 months. Also refer stoploss. thank you.
Ramalingam K: 6 to 9 months is a very short term to invest in gold. You need to invest in gold for long term. Gold is a good hedge against inflation. For long term (5 years and above) you can choose to invest in gold etfs. Gold etfs are better way to invest in gold.
guest: Sir, MET Life or Kotak?
Ramalingam K: You can choose the insurance company based on the claim settlement ratio, their service standard and premium rates. You can get the claim settlement ratio from the IRDA website. Before taking a policy check this and choose the company.
guest: Which is the best Retirement plan I am goin to retire in 10 years. please suggest some good investment for retirement
Ramalingam K: Fist, you need to work out a retirement plan to suit your requirement. A plan which can provide the required post retirement income adjusting for inflation every year. A combination of PPF, Mutual funds will help you create your retirment corpus. According to your plan, we need to choose the schemes.
guest: Which is the best health insurance policy for family?
Ramalingam K: There is no health insurance policy which is right or everyone. You need to choose your own right health insurance plan. 1) You need to first assess your requirement.. the coverage amount, coverage hospitals, 2) You need to understand what is covered and what is not covered in the policy 3) Check for things like total premium to be paid, deductibles, co-payment, upper limit for certain expenses like hospital room, out of pocket expenses. These factors will help you choose the right plan for you.
guest: Which is a good option - buying a term life insurance plan with terminal benefit or term life insurance with accident benefit? I want to buy insurance of Rs 2 crore. I am 39 years old.
Ramalingam K: It is advisable to take term insurance plan without any benefit like return of premium in case survived till the term or any terminal benefits. The premium will be higher while compared with normal term insurance plans. Instead of paying this additional premium if you had invested in equity mutual funds it will give better return at the end of the term. Instead of taking add cover accident benefit it is better to take separate accidental policy offered by the general insurance companies which cover disability also due to accidents.
guest: Should I buy Jeevan Akshay to get pension. I am 62 years old. I have rs 1 crore to invest.
Ramalingam K: I dont advocate for readymade pension plans available in the market. Instead of that, you can create a retirement plan with a combination of different good schemes available in the market, FDs, mutual funds, bonds... A customised retirement plan is more flexible. You can withdraw more if required. You can customise your withdrawals to adjust for inflation. SO i suggest you to create your own customised retirement plan with a mix of schemes.
ghosh-pankaj: Hello Sir, I am accumulating retirement corpus by investing 10K in Equity Mutual funds. This is above my EPF and PPF . Do I need exposure in NPS?
Ramalingam K: 1) Is NPS performing better than other options? Equity funds of NPS are underperforming equity mutual funds by around 20% in the last one year. They invest only like an index fund. They don’t invest outside the index for better returns. 2) Is NPS easily liquidable? No. You Can’t withdraw any money from it before the age of 60 years. Only, 40% can be commuted at the age of 60 years. Balance 60% is retained by NPS to pay you the annuity. If the same money is accumulated in mutual funds, 100% of it can be withdrawn at anytime. 3) Is the return on NPS tax-free? The commutation amount (which can be upto 40%) is tax-free. The balance 60% will be paid by way of annuity. That’s taxable completely. As it comes in the form of annuity, there is no demarcation between the principal and return. Withdrawals from equity mutual funds funds are completely tax free. Withdrawals from debt mutual funds will have less tax burden as in this case, the principal portion of the money is not taxed and only the returns are taxed. 4) Is NPS a flexible scheme? There are some restrictions. You can’t invest more than 50% of your money in equity funds any point of time. Bottomline: Just because it gives upto 30% tax benefit for the first year of investment, do we need to get into a product which is underperforming around 20% year after year. The NPS needs to evolve into a better product. It needs to allow investments outside index which can outperform the index. It needs to allow pre-mature withdrawals. As and when it evolves into a better product we can consider NPS. As of now “NO” to NPS. Your retirement corpus can be invested in mutual funds which are more attractive in the long term when compared to NPS.
guest: Which is best policy for fire insurance?
Ramalingam K: Mostly the premiums offered by the general insurance companies for the fire policy is same. You can cover for the replacement cost of your property in case any damage is happen. You can select better service providing company to take the fire insurance.
Ramalingam K: I thank the viewers and moneycontrol.com for the opportunity.