Health insurance protects you from incurring a financial loss as a result of a critical illness, disability or accident. Most Insurance companies cover the same thirty critical illnesses and provide lump sum payments in the event of such an illness occurring.
While looking for a health insurance plan, there are various factors that you must consider, some of them being….
Lifetime cover is essential
Buying a health insurance policy with lifetime coverage is essential because people are expected to live longer. Many people feel that since their employer provides them with a medical cover, they do not need to buy their own insurance plan.But what happens, once you retire or are forced to resign from the company’s services….will you buy insurance at age 55 at an unfavorable rate?
It is always advisable to buy health cover when you are still young and healthy as some products may not be available to people over a certain age or to those with an existing illness.
Statistics suggest that people are expected to live much longer…much after their retirement years, so plan for a life after age 55.
“As charged” Vs plans with limits.
There are two kinds of plans –those that come with certain sub limits –as in per day or for each category and those that do away with limits –or “As charged.”The latter is better as there are no limits on the medical benefits and it means that hospitalization expenses will be paid according to what has been billed subject to any deductible or co-insurance.These plans also automatically take care of the rising health care costs.
Shield plans have deductible and co-insurance features
All Shield hospitalisation plans include a “deductible”, the first layer of charges that the policyholder has to bear. Depending on the type of plan, the deductible is typically about $2,000 to $3,000. The plans also have a co-insurance feature, which means the policyholder shares part of the cost of the bill, usually 10 per cent over and above the deductible. For example, if an A-class ward bill is $5,000, the policyholder bears the first $3,000 as the deductible, and $200 as co-insurance (10 per cent of the remaining $2,000). The insurer pays the remaining $1,800. Insurers offer riders which waive the deductible and/or co-insurance, for a premium.
Go for a complete package –one that includes a deductible and a co-insurance rider ,so that you get covered from the first dollar!
Pre-existing conditions are not covered
Pre-existing conditions refer to medical conditions, known or unknown to the policyholder, that existed before an application was made to buy a health plan. Under personal hospitalisation policies, these pre-existing conditions are typically spelt out by the insurer and excluded throughout the lifetime of the insurance plan.
Guaranteed renew ability
A product that guarantees that your cover will stay in force as long as you pay the premiums on time is naturally better than one that gives insurers the right to cancel the cover by giving written notice before your plan is due for renewal. However, most insurers reserve the right to change premiums, benefits, and the terms and conditions of their plans when they are due for renewal by giving you a written notice.
Limitation to geographical areas
Check to see if your plan covers hospitalization back home,if you’re a temporarily residing in a country.Some plans will cover only emergency treatment anywhere in the world whereas others may cover you for all kinds of hospitalization.So, bear this in mind if you’re a frequent traveler and want your plan to cover you while on a business trip.
Buy one plan to cover all your needs.
While it may be tempting to buy separate plans that cater to accident,illness etc, remember that the total benefit is limited to the actual expense incurred so there is no need to buy extra policies.
Thursday, March 25, 2010
Friday, March 19, 2010
How much do you need for your retirement?
I found this very simple and easy calculator to compute the amount you
would need for your retirement.
It addresses different aspects such as
1)What you need to save?
2)How fast will your savings grow?
3)Can you retire early?
4)Get income for life?
5)When you will be a millionaire?etc.
I've pasted the link below.Though it may not give you a complete picture,it will
get your pulse ticking and soon you will be asking questions and finding solutions
to your problems!
Have fun with it at
CNN and Money Magazine Retirement Calculator
http://cgi.money.cnn.com/tools/
would need for your retirement.
It addresses different aspects such as
1)What you need to save?
2)How fast will your savings grow?
3)Can you retire early?
4)Get income for life?
5)When you will be a millionaire?etc.
I've pasted the link below.Though it may not give you a complete picture,it will
get your pulse ticking and soon you will be asking questions and finding solutions
to your problems!
Have fun with it at
CNN and Money Magazine Retirement Calculator
http://cgi.money.cnn.com/tools/
Sunday, March 7, 2010
How many benefits can a monthly investment plan have?(Count them and see!)
1.Become a disciplined investor.
Being disciplined -it's the key to investing success.With a SIP -Systematic Investment Plan or a MIP -Monthly Investment Plan, you commit an amount of your choice to be invested every month.Think of each MIP payment as laying a brick.One by one,you'll see them transform into a building.You'll see your investments accrue month after month.It's as simple as giving at an auto debit instruction to your bank for a fixed amount in a scheme of your choice.It's the perfect solution for irregular investors.
2.Reach your financial goals.
Imagine you want to buy a car a year from now,but you don't know where the down -payment will come from.By investing an amount of your choice every month,you can plan for and meet your financial goals,like funds for a child's education or a comfortable post -retirement life.
3.Take advantage of dollar cost averaging.
Most investors want to buy stocks when the prices are low and sell them when prices are high.But timing the market is time consuming and risky.To illustrate this we'll compare investing the identical amounts through a MIP and in one lump sum.
Imagine John invests $1000 every month in an equity mutual fund scheme,starting in January.His friend James,invests $12000 in one lump sum in the same scheme.The following table indicates how their respective investments would have performed from Jan to Dec.
John's Investment James' Investment
Month NAV Amount Units Amount Units
Jan-10 9.35 1000 107.01 12000 1284.11
Feb-10 9.40 1000 106.39
Mar-10 8.12 1000 123.11
Apr-10 8.75 1000 114.29
May-10 8.01 1000 124.81
Jun-10 8.93 1000 112.04
Jul-10 9.10 1000 109.87
Aug-10 8.31 1000 120.34
Sep-10 7.57 1000 132.14
Oct-10 6.46 1000 154.75
Nov-10 6.93 1000 144.28
Dec-10 7.60 1000 131.58
Total 12000 1480.60 12000 1284.10
As seen in the table,by investing with an MIP,you end up buying more units when the price is low and fewer units when the price is high.However,over a period of times these
Market fluctuations are generally averaged.And the average cost of your investment is often reduced.
At the end of the 12 months,John has more units than James,even though they invested the same amount.That’s because the average cost of John’s units is much lower than that of James.James made only one investment and that too when the per-unit price was high.
John’s average unit price =12000/1480.60 =$8.10
James’ average unit price =$9.35
4. Grow your investment with compounded benefits.
It is far better to invest a small amount of money regularly, rather than save up to make one large investment.This is because while you are saving the lump sum,your savings may not earn much interest.
Imagine John was 20 years old when he began working.Every month he saves and invests $5000 till he is 25 years old.The total investment made by him over the last 5 years is $300,000.
James too started working at age 20 ,but does not invest any money.He gets a large bonus of $300,000 at age 25 and decides to invest the entire amount.
Both of them decide not to withdraw these investments till they turn 50.At 50.John’s investments have grown to $46,68,273 whereas James’ investments has grown to $3617084.(Figures based in 10%pa interest compounded monthly).
John’s small contributions to a MIP and his decision to start investing earlier than James has made him wealthier by over $100,000 .
5. Do all this effortlessly.
Investing with an MIP is simple and easy.All you need is an auto debit instruction to your Bank for the required sum to be debited every month.However, do read the terms and conditions of the MIP before enrolment.
All you have to do after that is sit back and watch your investments accumulate.
Being disciplined -it's the key to investing success.With a SIP -Systematic Investment Plan or a MIP -Monthly Investment Plan, you commit an amount of your choice to be invested every month.Think of each MIP payment as laying a brick.One by one,you'll see them transform into a building.You'll see your investments accrue month after month.It's as simple as giving at an auto debit instruction to your bank for a fixed amount in a scheme of your choice.It's the perfect solution for irregular investors.
2.Reach your financial goals.
Imagine you want to buy a car a year from now,but you don't know where the down -payment will come from.By investing an amount of your choice every month,you can plan for and meet your financial goals,like funds for a child's education or a comfortable post -retirement life.
3.Take advantage of dollar cost averaging.
Most investors want to buy stocks when the prices are low and sell them when prices are high.But timing the market is time consuming and risky.To illustrate this we'll compare investing the identical amounts through a MIP and in one lump sum.
Imagine John invests $1000 every month in an equity mutual fund scheme,starting in January.His friend James,invests $12000 in one lump sum in the same scheme.The following table indicates how their respective investments would have performed from Jan to Dec.
John's Investment James' Investment
Month NAV Amount Units Amount Units
Jan-10 9.35 1000 107.01 12000 1284.11
Feb-10 9.40 1000 106.39
Mar-10 8.12 1000 123.11
Apr-10 8.75 1000 114.29
May-10 8.01 1000 124.81
Jun-10 8.93 1000 112.04
Jul-10 9.10 1000 109.87
Aug-10 8.31 1000 120.34
Sep-10 7.57 1000 132.14
Oct-10 6.46 1000 154.75
Nov-10 6.93 1000 144.28
Dec-10 7.60 1000 131.58
Total 12000 1480.60 12000 1284.10
As seen in the table,by investing with an MIP,you end up buying more units when the price is low and fewer units when the price is high.However,over a period of times these
Market fluctuations are generally averaged.And the average cost of your investment is often reduced.
At the end of the 12 months,John has more units than James,even though they invested the same amount.That’s because the average cost of John’s units is much lower than that of James.James made only one investment and that too when the per-unit price was high.
John’s average unit price =12000/1480.60 =$8.10
James’ average unit price =$9.35
4. Grow your investment with compounded benefits.
It is far better to invest a small amount of money regularly, rather than save up to make one large investment.This is because while you are saving the lump sum,your savings may not earn much interest.
Imagine John was 20 years old when he began working.Every month he saves and invests $5000 till he is 25 years old.The total investment made by him over the last 5 years is $300,000.
James too started working at age 20 ,but does not invest any money.He gets a large bonus of $300,000 at age 25 and decides to invest the entire amount.
Both of them decide not to withdraw these investments till they turn 50.At 50.John’s investments have grown to $46,68,273 whereas James’ investments has grown to $3617084.(Figures based in 10%pa interest compounded monthly).
John’s small contributions to a MIP and his decision to start investing earlier than James has made him wealthier by over $100,000 .
5. Do all this effortlessly.
Investing with an MIP is simple and easy.All you need is an auto debit instruction to your Bank for the required sum to be debited every month.However, do read the terms and conditions of the MIP before enrolment.
All you have to do after that is sit back and watch your investments accumulate.
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