Understand HLV to ensure that you are not under insured

Life is unpredictable. Though you may commit yourself to planning each and every rupee of your financial life, you never know what is round the corner. An unfortunate and unexpected event may lead to a life cut short, a financial plan cut short and a family not only in an emotional but also a financial turmoil. This is where life insurance comes in. Purchasing a life insurance cover in any form (term, endowment, etc.) ensures that your family is financially secure even when you are no longer there to provide for them.

Importance of HLV

The key to ensuring your family’s financial security lies in the quantum of insurance cover you wish to purchase. So, how do you arrive at this magic figure? Well, by knowing your Human Life Value (HLV). The HLV provides an indication of the insurance cover required to ensure the financial security of your dependents after taking into account your life’s existing and future financial situation.

Factors impacting your HLV

Factors such as your age, annual income, age of retirement, goals, assets and liabilities, current and future expenses and of course, the existing insurance cover, if any, are considered.

Annual Income- Your average annual income is computed for a given number of years, beginning from your present age to the age of retirement, adjusting for increments. All expenses such as taxes, EMIs, household expenses, etc. are deducted from the annual income.

 Sources of Income other than Salary- Over and above your salary, you may have other sources of income such as rental income, investment income, dividend income, pension received by your parent(s) if any, etc. All these are also considered as annual cash inflows.

IndiaFirst Life Insurance Money Balance Plan – An Ideal Plan For Many

Enjoy life cover, market linked returns and match policy receipts with important milestones, all through a single plan.

Rohan Singh (name changed) is in his late 30’s and a single parent of two school going children. He has recently concluded that his existing insurance cover may no longer be enough to provide for his dependants in case of an untimely demise. With multiple insurance policies on offer, he does not know which policy he should purchase. He shares his dilemma with his close friend, Tejas Kapoor (name changed), who after understanding his needs, suggests him a money back unit linked plan. The advantages of earning market linked returns and getting the insurance proceeds in installments that can match the various milestones in Rohan’s children’s lives, forms the basis of his recommendation. He thereby suggests IndiaFirst Money Balance Plan.

Are you too in a similar boat as Rohan? If “Yes”, then, IndiaFirst Money

Balance Plan is the ideal plan for you too

About IndiaFirst Money Balance Plan

IndiaFirst Money Balance Plan is a Ulip plan. It offers an ‘automatic trigger-based' investment option that guarantees consistent return along with a life cover. The policy sum assured is payable in case of the untimely demise of the life assured during the policy term.

Suitability

•    Savings plus insurance cover: This two-in-one plan is suitable for those who are seeking life insurance coverage along with savings at market-linked returns

•    Flexibility: You can select and switch between high risk - high return funds and low risk - low return funds according to your risk profile and investment needs

•    Doubles up as a savings account: The partial withdrawal facility allows you to meet unexpected financial emergencies with ease.

•    Invest regularly: You can save and invest regularly and use the market volatility to your advantage

•    Loan facility: You can avail a loan under this plan before completion of 5years of the policy.

Benefits

•    You have multiple premium payment frequencies to choose from - monthly, six monthly, yearly or one-time

You enjoy tax benefits under section 80C on the premium payable and section 10 (10D) on the policy benefits receivable on maturity or death

5 Financial Resolutions for the New Year

Enter the New Year with promises that will help you to improve your financial health…

The financial year 2012-13 has been quite eventful. Though it was not a year worth remembering for all those who were long on the equity markets, investors who parked funds in gold gained substantially. Going forward, though making money from the equity or the commodity market looks difficult, following basic financial discipline can make a big difference over a longer time frame. Here are a few resolutions that you can make for the coming year, which will definitely help you in the long run...

I will not undertake ad-hoc investments

Rather than making disconnected investments over time, make investments that will seamlessly merge with your overall financial plan. This will ensure that the investment plans you choose will not only lead you closer towards your goals but, will also suit your risk taking ability and capacity.

I will continue to service my loans on time

Skipping an EMI (Equated Monthly Instalment) comes at a huge cost. Banks charge heavy penalties if EMIs are not paid on time. You may not only have to bear a higher cost but your credit record may also be adversely affected. This could make things difficult, if you wish to acquire another loan… Therefore, from your income, first keep aside sums due for all repayments and then undertake your investments, savings and expenses, in that order.

I will pay off my credit card bill in full

Credit cards are the cheapest source of funds if repaid on time and the costliest form of a loan if not paid by the due date. Postponing payments by just paying the minimum amount can be very dangerous. You may end up in a debt trap, which may be difficult to get out of…

I will not indulge in ‘double your money quickly’ schemes

A number of ‘double your money quickly’ schemes keep coming up from time to time. Prima facie, all of them appear to be foolproof. But eventually, few keep up to their promises. Let alone expecting returns, most of the times, investors have to abandon hopes of getting their principal back.

I will not invest in the stock market based on ‘tips’ from friends and relatives

Many retail investors bet on fundamentally weak and operator driven shares recommended by friends and relatives in search of quick gains. Investors often burn their fingers and lose their hard earned money in the stock markets. Thus investing without knowing the fundamentals of a company should be avoided.