Why would you need to have a Term Insurance

If you are planning to purchase the term insurance plans then yes, you have made the right choice and you should go forward. The right choice of a term insurance plan provides you a financial protection and most importantly it secures the future of your family.

The life is full of twists and turns which also befits in the old saying ‘Always Expect the Unexpected from Life.’ So, you should always cautious about the risks like critical illness, hospitalization, and accidental disability as well. These dangers make the term insurance important for you to look beyond the traditional need.

The chances of unexpected dangers at any stage of your life can never be ignored. In these times, exorbitant expenses may occur in your health, family welfare, and the study of children or any other expenses. So, if you are the only earning member of the family, critical illness can push your savings down south. Financial worries can also impact your growth. The answer to all these dilemmas is ‘Term Insurance.’ But before starting to purchase the term insurance plan, you should know all about regarding this.

Here we are going to give you the most significant approaches and benefits those will definitely help and attract you while buying any term insurance plan

 

Importance of Insurance
Details on the Term Insurance

Benefits of Term Insurance –

Easy payment terms –

Usually, the term insurance policies give options for premium payment and death benefit. So, if you are unable to afford a lump sum amount to pay for term insurance due to the cash crunch then you can split your lump sum amount into 12 monthly installments or four quarterly payments or even two half-yearly installments as well.

 

In the term insurance plan, the great advantage is the death benefit which can be received by your nominee in a lump sum or in a number of amounts. If you are going to purchase the term insurance online then you will have the multiple options to show and related benefits that you can explore, before making the final purchase of the term policy.

Lump Sum Payment

After purchasing the term insurance plan, the biggest benefit is the lump sum payment that he/she gets during his/her emergency or critical period. This financial support helps you in both hospitalization expenses as well. The money which you receive helps you to put your mind at ease about the medical expenses involved.

Get rid of Deductions –

One of the biggest benefits of purchasing the term plan is that on the diagnosis of the covered critical illness, the entire benefit amount is paid in full. Most importantly, there are not any deductions during your entire coverage amount unlike any other investment plans. So if you are promised to pay the 10 lakh rupees after that period then you will be paid this full amount without any deductions.

Tips for Purchasing the Term Plans –

Online Purchase –

In the era of the digital world, all insurers offer the easy option of buying a term plan with the various attractive schemes. So if you are buying the term plans online then it will be many benefits, such as cheaper premium and complete privacy for your term plan. Also, the term plan is available after a click and buying a term insurance policy online can happen in just 5 minutes.

During the registration, you should keep all the related document together while filling the information such as nominee, date of birth, some basic data like your medical history, your employment status and most importantly the stable internet connection during the process.

Also, the purchase of term insurance can be done in the privacy of your home and without any external help. By choosing a long policy term, one can ensure that the rate of annual premium is constant for the upcoming years or not. The great benefit of purchasing the term insurance online is that you can calculate your premium online using the calculator which is given in most of term insurance sites.

Regular Premiums

This is one of the feature tips that you should check before purchasing any term insurance plan. The premiums for must be remained same throughout the term, whereas the premiums for term Insurance Plans would change every year on policy renewal which is based on your age.

Talk to the Expert Team

You must be interested in our article on Why Should I need to have a Financial Planner

In this digital era, there is still a confusing subject and the person does not feel the need to speak with an expert to get clarity on their doubts. Also, only the paper materials are not enough to clear their doubts about taking the right decision. So, if you want to make the things easier before purchasing the term plans then you should speak to the particular term insurance company’s agents and they are always ready to answer all your queries and assist you in making this important decision. Nowadays, term plans have become mandatory to your financial portfolio because they are simple, easy to understand and can take care of your financial needs to a very large extent.

Must Read Terms and Conditions –

This is the mandatory thing for all before purchasing any insurance product so must go to the terms and conditions. Also, make it sure that the particular company has mentioned its terms and conditions apparently which must be easier to read the details and understand the subject matter.

Moreover, you should also compare the different insurance company’s products which are listed on that website by which you will get know their differences and the benefits which are offered by each one of them. This thing will also help you in making the decision clear and quicker.

Pre-Existing Conditions

Before choosing any term insurance plan you should carefully read the pre-existing conditions of that insurer. Also, you should know about the waiting period applied to pre-existing diseases before they are covered before purchasing any term plan.

So, all in all, you can’t go plain in your life because our life is undetermined. We never know what will happen to us tomorrow or what future has in store for us. So, now it becomes important to get prepared for whatever we can. Term Insurance is a plan that secures your future so you must go to these various plans that help you in any critical stage of your life and your family’s life.

Top 4 Safe & Secure Alternate Investments to Invest Our Hard Earned Money

Alternative Investments are the investments which are defined in Regulation of Securities and Exchange Board of India; these are privately pooled money investment which includes mutual funds, equity funds, general and life insurance. These investments are the choice of investment opportunities which investors should know before investing into any kind of Asset in the market.

Basically, this investment includes hedge funds, real estates, commodities, private equity and derivatives contracts, these are held by institutional investors and have high minimum investments, there is a lot of diversification in these types of investments and is held over for a long period of time, much longer than 12 months in comparison to short term investments.

Some Safe Alternative Investment Includes:-

1. Mutual Funds
2. Equity Funds
3. General Insurance
4. Life Insurance

Mutual Funds

Mutual funds are the investment funds which includes save money on the securities from the investors like stakeholders, shareholders and it also includes shares, bonds, market securities, assets and many other stocks, who wishes to invest their money with low cost. These funds are very flexible in nature as there is an involvement of liquidity ratio.

Details about Mutual funds

Mutual funds varies a lot as there are benefits of taxes and wide variety of huge choices among it, there is a comprehensive diversification in it which is convenient for the investors to invest, all the individuals or stake holders who invest in it has a full stake on the gains and losses equally.

Diversification in mutual funds itself suggests that it depends upon the categories of which securities does the fund manager invests in. These funds are accumulated with the pool of money for investing in shares and securities and are operated by professional managers for operating all the income of investors.

The funds are mostly taken from the public and are invested it in securities, bonds, stock or shares as the funds are mostly hired by the Board of Directors Mutual funds are redeemed as required which are known as NAVPS or net asset value per share, In this investment funds most of the managers are the owner of this fund as they adopt the analysts who can pick investments or can do the market research properly.

Equity Funds

In Mutual funds there are mostly three types of funds which are privately investment fund that includes equity funds, fixed income funds, and money market funds that buys ownership’s in businesses most often in the form of publicly traded common stock.

These funds are the Mandatory funds which are invested into stocks and papers of public limited company, their main motive is for long term investment goals, these funds are also convenient and are at low cost, these are basically classified into large capital, mid capitals, multi capitals, balanced, etc.

The other name of equity funds is stock funds, and these are principally categorized according to company size, its investment style port folio, etc. These funds are at high return rate and are very beneficial funds. At presently there are more than 2500 equity funds available.

Willing to more on the importance of a financial planner click here

INSURANCE

Insurance is referred to as a policy, in which an individual receives a financial safety and protection against the losses from an insurance company. Generally, there are two types of insurance:

Importance of Insurance

Life Insurance: This insurance is basically against an individual loss of income, that would be resulted if the person is no more or passed away, the person who is received as a beneficiary shall be safeguarded and proceed with it from the financial impact of that deceased person, life insurance includes the term of the person.

General Insurance: This insurance is also known as non-life insurance, it includes the policies of automobiles, home owner policies, this insurance comes under all the insurance except the life insurance and it totally depends upon the payment provided for the particular financial year.

General insurance also has some other name in other countries like in US and Canada, it is called as property and casualty insurance and in Europe it is called as Non Life Insurances. This insurance basically includes health, accident, home, motor, etc.

Thus, alternative investments are diversified with low cost and for unique, thus Mutual Funds, Insurance, and Equity funds does not come in conventional investment or the traditional modes of investments like stocks, bonds, cash, etc but these includes private equity, hedge funds, managed features, real estate, commodities and derivatives contracts, which are very certain and for long term goals with flexible nature that might attract investors to invest in it.

Willing to more on the importance of a financial planner click here

 

Why should I need to have a Financial advisor?

Welcome to MPF,

Ahh we understood that you are in the urge of understanding the importance of a financial advisor. At the same time something popping up your mind that “Do I still need a financial advisor or a planner to decide my retirement, child planning or wealth management?”.

A hypothetical question! Let me try to explain why you require a financial planner or an advisor to protect your money or to start with your wealth creation.

Who are a Financial Planner / Advisor?

Professional with deep understanding in finance, taxation and wealth management who service their clients to accomplish their financial goals by allocating their money in different financial instruments like equity, mutual funds, Term Deposits etc.

For many people the goals are towards their children education, retirement planning, buying a home, starting a business, vacation, wealth creation etc.

Financial advisor carry out their activity through “fact finding” sessions by asking number of questions to understand your requirement and your current financial positions.

Based on the discussions they come up with the affordable and suitable financial products for you to achieve your future goals.

Though the financial advisor do the same activity, but the immense difference among the service are provided by different types of advisors and now the services may cost you few thousands.

Now a days professional are coming up with different titles, sometime they are financial planners, financial advisors, and Investment planners, Investment advisors or wealth managers.

They may not do the same type of work, in general financial planners or advisors may be / interested able to help you on the complete picture of portfolio including budgeting, debt balancing and financial planning, however Investment advisor or wealth managers mostly will help you on finding the best investment opportunities.

Fee based Planners

Now fee based planners are quite popular in the industry and they provide a solution or recommendation to you for a fee. The fee can be an hourly fee or a planning session fee or it may be charged as an annual fee based on the assets under management (AUM). 

They offer financial planning, retirement planning, child education planning, budgeting; debt balancing etc. the entire fee details are revealed to the clients upfront and the clients can understand the exact service what will be getting for the fee.

The biggest advantage here is, the service what we are getting is an unbiased advisory since the planners don’t get any compensation or sales fee from the organizations. So they do not offer you any particular product.

This image will help the user to understand the need of a financial planner
Image credit : Pixabay

Commission based planners

They also provide the same set of service as fee based planners, however they don’t they don’t charge any fee from their clients. They receive commission or a brokerage from the organization for selling the product.

Mostly they receive a percentage of the total amount clients invest in particular funds or products.

Now you may think that the possibility of suggesting a product which gives them a big commission even though they are a profitable to the client.

You may have a question now when do I need to hire a financial planner? Hmm tricky & a good question, its completely personal, if you have any queries related to money, taxation, saving, retirement planning or just a re balancing your financial portfolio, financial planner or an advisor can help you.

Because they are in the market, they will get the updates on the inflation, deflation, GDP, market situation and a global economy etc. they will be able to help you professionally. On the other hand may tend to take an emotional decision during the crisis.

However if you’re capable to manage your finances without any emotional decision, if you find enough time to do the research, if you have ample amount of knowledge or skills when it comes to investing, then absolutely you do not require a financial planner.

If your answer is no for any of these question definitely you should hire a financial planner to take care of your financial situations.

How much you Pay for the Planning or Advice?

Fee based financial planner may charge from Rs 1000 to Rs 5000 per hour, you may find some planners will advise only HNI’s (High Networth Individuals) and impose investment of Rs 5 lakh on the low end ranging upto crores.

Commission based advisers will receive a percentage of the total number of transaction that you make. Financial planners also offer managed Portfolio Management Services (PMS) may charge 0.2% to 2% of the total investment amount.

Ultimately this is absolutely own discretion of individuals to choose financial planner / advisors to make their money grow, and again when you get an advice from the professional it is your duty to understand the concept well and ask them many questions before investing in any products. Finally it’s your hard earned money.

At the same time nobody can force anybody to take advisory service or force them to invest in the recommended products.