Money Savings and Deposits

The Reasons You Want Insurance Coverage – Top Reasons for getting life Assurance

You unquestionably want to know no matter whether lifestyle insurance policy can be a advantageous financial commitment you aren’t. The fact is it has a lot of rewards in your case and then for your household. Find out the reasons why you want like insurance plan and ways in which it will also help you and your loved ones.

A life insurance policy bushes the ones you love from monetary risks if you happen to perish. If you ever are among the breadwinners inside a household, you will definitely not want to keep all your family with no your wages in the occurrence of passing. This sort of protection will pay out a lump sum payment to your heirs. Countless uses for flash for something. All your family members can use it to spend any loans and lending products, to cover their living expenses for a time and to invest in their education and exercising.

Lasting living insurance cover permits you to not spend as much within your life and provides for funds price expansion. In paying a limited high grade each year or regular towards insurance policy firm. They control your hard earned cash, in order that it can develop. Essentially, this sort of insurance policy coverage can be used for saving while not having to store a considerable slice of you salary.

You’ve got a number of plan solutions available. In addition to Best Savings Plan the permanent insurance plan, you can decide on lasting complete, common and changing worldwide existence insurance policies and also for a term scheme. All of these answers are produced to take care of your personal demands but for the fiscal wants of your family at any point over time.

Having an expression insurance policy, you can find further financial safeguards during times when you have insurance coverage probably the most; say for example a home loan payment term or perhaps a toddler bringing up phase. Which has an adjustable worldwide scheme; you possibly can use some financial commitment options and increase the produced cash price even more.

You should utilize the gathered cash benefit from whole and widespread handles for just about any requirements within your lifetime time. It is possible to take away a slice of it and employ it to protect any vital expenses. It’s also possible to borrow up against the cash importance of your policy. These adaptable selections enable you to take care of your finances more effectively all through your daily life time.

Lifetime insurance policy is affordable. In spite of the common belief, you do not have to cover huge prices around the coverage you obtain. You possibly can easily look around to obtain the best and affordable deal. Moreover, that has a entire permanent scheme, your high grade will likely be preset, settle down! Spending budget will never be harm by imbalances and boosts.

You now know the reason why you require lifestyle insurance and in what way it may help you.

[Source: http://lifeinsurance-blog.net/the-reasons-you-want-insurance-coverage-top-reasons-for-getting-life-assurance/24/]

Top 10 tax Saving Investment Options

Apart from the regular investment options under Section 80C of the income tax act, this year investors have an added advantage of investing in infrastructure bonds and enjoy an additional deduction in tax under section 80CCF of the Income Tax Act.

SECTION 80C DEDUCTIONS: Investment options under Section 80C can be broadly categorised as market linked, fixed income and insurance. The fixed income category includes investment options such as the Public Provident Fund (PPF), Employee Provident Fund (EPF), tax-saving bank fixed deposits, National Savings Certificate (NSC) and senior citizens savings schemes.

While it is the most popular tax saving category, market-linked instruments including tax-saving equity mutual funds (ELSS) and unitlinked insurance plans (ULIPs) are gradually catching up.

PUBLIC PROVIDENT FUND (PPF): One of the oldest investment options, PPF scores on all grounds as it is one of the very few investment options that fall under EEE (exemptexempt-exempt) tax regime.

This implies that not only the investor can enjoy deduction on the amount invested in this scheme but the interest received on maturity is also exempt from tax.

PPF offers an interest rate of 8% compounded annually, with the maximum investment restricted to Rs 70,000 a year and mandatory investment tenure of 15 years.

An investment of Rs 70,000 every year in PPF for 15 years will amount to a taxfree maturity sum of Rs 20.5 lakh at the end of the 15 year tenure.

EMPLOYEE PROVIDENT FUND (EPF): Under the current norms, 12% of the employee’s salary is contributed towards EPF, which is exempt from income tax. Any contribution over and above the 12% limit by the employee towards EPF is consider as voluntary provident fund (VPF) and the same is also exempt from tax, subject to the overall 80C limit of Rs 1 lakh per annum.

Like PPF, EPF, also falls under the EEE tax regime wherein the interest received (on retirement from service) is tax-free in the hands of the investor. The interest payable on EPF is determined each year by the Employee Provident Fund Organisation (EPFO). After having maintained a steady interest rate of 8.5% per annum for quite some time, the EPFO has enhanced the rate of interest to 9.5% for the financial year 2010-11.

While it is still not sure whether such an attractive interest rate will continue in the following years, those who have been contributing to EPF for quite some time now and have accumulated a large corpus are bound to benefit immensely with this year’s higher interest as interest is compounded annually.

NATIONAL SAVINGS CERTIFICATE: Similar to PPF, NSC also earns an interest rate of 8% per annum and investment up to Rs 1 lakh is exempt from tax under section 80C. However, unlike PPF, interest received on NSC, at the time of maturity, is taxable in the hands of the investor which makes it comparatively less attractive.

On the positive note, however, NSC has a relatively shorter lock-in period of just about 6 years and the interest here is compounded halfyearly. Thus, every Rs 100 invested into NSC will grow to Rs 160.10 on maturity.

TAX SAVING BANK FDS: Investment up to Rs 1 lakh in these special tax saving bank fixed deposits also entails an investor tax deduction under Section 80C.

These fixed deposits mandate a lock-in period of five years and interest is compounded quarterly, just like any other ordinary bank fixed deposit.

The drawback is taxability of interest income upon maturity. As most banks are currently offering attractive interest rates, tax-saving bank fixed deposits are currently offering interest rates as high as 8.5% to its investors.

SENIOR CITIZENS SAVING SCHEME: Indian citizens who have attained 60 years of age or those who have attained at least 55 years of age and have opted for voluntary retirement scheme are eligible to invest in senior citizens saving scheme, which offers a fairly attractive interest rate of 9% a year, payable on quarterly basis.

While investment in this scheme is eligible for tax deduction under Section 80C, interest earned shall be taxable in the hands of the investor.

EQUITY LINKED SAVINGS SCHEME (ELSS): These tax saving plans schemes do carry an embedded market risk and calls for investor prudence before making an investment decision. However, their returns are equally rewarding and tax free in the hands of the investor.

As ELSS has a mandatory lock-in period of three years, they are positioned as long-term equity assets and thus returns are tax free in the hands of the investor. And though these schemes mandate a three year lock-in period, investors are likely to be better off if they continue to stay invested for a longer term as equities generate best returns over a longer time frame.

For instance, on an average, ELSS category of funds has returned about 22% compounded (CAGR) returns per annum over the past 10 year period. Some of the better performing schemes in this category include Canara Robeco Equity Tax Saver, Fidelity Tax Advantage and HDFC Tax saver for investors to choose from.

LIFE INSURANCE PREMIUM: Any premium payable by an investor to provide cover to his life is also eligible for deduction under Section 80C, subject to a maximum of Rs 1 lakh. The life insurance policy may be purchased either from LIC or from any other private player in the insurance industry.

Investors should, however, make sure that premium payable is not more than 20% of the sum assured (amount of life cover) in order to avail Section 80C deduction.

UNIT LINKED INSURANCE PLANS (ULIPS): Ulips, or market inked insurance schemes, are also eligible for deduction under Section 80C. As these schemes provide investors the benefit of both life cover and investment in equity and debt markets, these are highly popular with investors.

Investors would, however, do well to check the premiums charged by these schemes before making an investment decision as most Ulips charge high premiums.

SECTION 80CCF DEDUCTION: A new Section 80CCF has been inserted in the Finance Bill 2010-11, which provides an additional deduction of Rs 20,000 to investors for investing in infrastructure bonds issued by notified organizations.

This deduction is over and above the Rs 100,000 deduction available under Section 80C. In the latest tranche, infrastructure bonds offer an attractive interest rate of about 8% to investors with a minimum lock-in period of five years.

[Source: http://webcash.in/2012/06/29/top-10-tax-saving-investment-options/]

Endowment And Insurance Saving Plan

Recently, I have met up with one of my friends for lunch. Over the lunch, he talks about whether do I have financial planning for my future? Well he is not an insurance agent or something like that. I told him that I have just a simple financial planning for myself. I told him about my portfolio whereby 25% of my money goes to stocks and the rest of my money, which is 75% of my money, parked at my OCBC 360 account for the 3.05% interest. 

I was wondering why he asked me this question so in return I asked him back about his financial plan and why he suddenly talked about this topic. He told me that he was told by one of his insurance agent about an investment plus insurance plan where the investment will be invested in secure shares. He didnt told me about what kind of shares that the plan will be invested by I presume that it would be blue chips (Correct me if I am wrong). 

I myself have went to NTUC income to asked more about endowment plan because it is better to diversify my portfolio in this area as well. But when my girlfriend and I went down and hear the agent's explanation, we felt that it is not really that worth it. Okay, not say totally because in the end, you will be able to gain some money out of the 10 or 20 years of "investment". We did see the chart and saw that for more than first half of the investment period, we will be losing money, so in any case whereby we need cash urgently, we will be losing some of our capital. Of course, this is the penalty but would be too harsh if it eats up our capital instead of just forfeiting our interest.

Well, I do not have much understanding about Best Saving Plans yet, but if I am going for one, it will not be for me but will be for my children so that after 20 years, my children will have enough money for his university education without me having to crack my head to pay for it. After that he/she will be on his/her own (after graduation).

So what is your view on these two plans? Will you be going for it?

[Source: http://jyklmoneyblog.blogspot.in/2015/04/endowment-and-insurance-saving-plan.html]