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Monthly Archives: March 2017

All You Need to Know about Credit Cards

Credit Card Charges

A credit card usually comes with a whole list of Credit card charges, beginning with the joining fee. Additional charges include the annual fee, statement fees, service tax, surcharge, late payment fee, card replacement fee, etc. Exceeding your credit limit on your card will attract a charge as well. Delayed payment of your dues will also result in a penalty, which will be levied on your subsequent bill.

Not paying off the total amount due on your credit card will attract interest charges, which could be anywhere from 3%-4% a month. Doesn’t seem like much, you might scoff, but when annualised, the rate amounts to a whopping 48% on the higher end of the interest spectrum. This amount is also levied on each successive bill that has a balance carried over, which will inflate your overall amount due by a significant amount.

Picking a Credit Card that Suits Your Needs

Picking a credit card that suits your needs is important, as this could be the deal breaker between you enjoying the perks of a card and drowning in a sea of debt. If you’re looking for a card merely to help you keep up with payments and aren’t looking for any perks, a no-frills card is the best bet for you. Looking for discounts each time you swipe at a store? A shopping credit card that offers cashback or in-store rewards is the one for you. Frequent travellers can benefit from a travel card, which converts points into air miles redeemable on flights or hotel stays.

Dates to Remember

With your new credit card comes a host of important dates that you have to keep in mind, such as your bill payment date, the date the bill is generated etc. The date your bill is generated on marks the end of your billing cycle and lists your outstanding dues for that period only. The bill payment date is the date by which you are expected to pay off the outstanding amount or the minimum amount due to avoid late payment charges.

Credit Card Application Status

Different banks have different ways of credit card application status but most of them have an online facility, where you can apply for a credit card online as well. The process then involves furnishing all required documents and information to the bank. Once, the application process is complete, you must track your application status to check how far long has it been processed by the bank so that you can follow up with the bank accordingly. Usually, it takes up to three weeks to receive your credit card from most banks. Credit card may take a month from the date of registration, as it undergoes processing request, followed by dispatch to your home address.

Minimum Due versus Full Payment

Credit cards offer you the chance to pay off your debt in instalments, either before the due date or after it. It is always advisable to pay off your outstanding amount by the due date to keep your credit score and repayment history healthy. However, if you are unable to pay off the whole amount, you are required to pay a minimum amount, usually a percentage of your total outstanding amount.

Getting away with paying just the minimum amount brings with it a set of charges though, since you will be paying interest on the balance amount. You will also lose out on the interest-free period, meaning every successive transaction will incur interest from the day the purchase is charged to your card.

 

Things to Remember when Purchasing Child Insurance Plan

Education cost and Inflation

While deciding the sum assured, you should take into account the estimated future education cost and inflation. For example, an MBA today costs Rs.12-15 lacs in a premier institute. So, you need to take the cost 10 or 15 years down the line. Ideally, the sum assured should be over 10 times the current income of the policy holder.

Tenure of the plan

Deciding the tenure of the policy is very crucial as it makes you plan things accordingly. Suppose, your child is of 8 years now, and you believe once he is 18 years, he will be sure of the field he wants to pursue his education. That will be the time you will need money to help him pursue his dreams. So, you can select a plan with 10 years maturity period.

If you ignore the link between age of the child and tenure of the plan, you might face a cash crunch as you will need funds before policy matures. The period of a policy should be decided as to when the child will attain 18 or 21 years of age.

Partial withdrawals

Many a times, you would want to get the funds as and when required and not when the policy matures. You should look for partial withdrawals clause. Managing the education cost becomes much easier if you can withdraw money after a fixed interval.

Ridersin child insurance plans

A rider is an additional benefit provided to the existing plan. The insurance companies charges extra premium for adding a rider to the plan. Policy holder should know about the riders offered by the insurance companies as these riders enhance the procedure.

Some riders offered by insurance companies are :

Premium rider

These days, insurance companies offer child plan with inbuilt premium rider clause. In case of untimely death of

policy holder, the balance premium payments are waived off and the nominee is entitled to get the benefits after policy matures.

If you are buying a plan, it is advisable that you look in for the premium rider clause.

Death Rider

In case of untimely death of the plan holder, the nominee gets a lump sum amount from the insurance companies. This rider ensures that the procedure does not lapse due to unfortunate events.

Other riders available are income benefit, accidental benefit, critical ailments etc. Riders vary from companies to companies and the person proposing to buy a policy should be aware regarding the riders offered.

Compare child plans online

Finding the best children plan as per your need is the easiest way to know about the various plans offered by insurance companies. It is convenient, paper less and hassle-free. You, also, have a customer assistance 24/7 that can help to sort all your queries. While comparing policy online, you will have to fill in personal details like the age of the parent and child, current income etc. Comparing and buying plans online helps you save the time of going to the insurance agent or the insurance company.Also, you can download the brochure of children plans from the insurance company’s website.

Ways to Teach Child about Investments

Give them pocket money

Pocket money can be a good way to teach a child about saving. You can start giving you child a small about of money and let them spend it as per their needs. Having their own money can help them understand its value.

Board games can be educational

Board games, at least some board games can be handy in teaching children about money. Business oriented games or games dealing with money like Monopoly, Business, Life etc can teach kids a lot about investments and returns.

Involve them in your planning

It’s not easy and sometimes not necessary for parents to involve their children while discussing money. But when it comes to investments, endowment insurance and savings plans having your children as a part of the discussion can be a good thing. Involving them in your banking processes or having them go to the bank with you can teach them a lot too.

Accounts can be empowering

Banks today, have a lot of schemes and child investment plans. Children get special accounts and even debit cards for their accounts. Having a bank accounts, a child and having a working understanding of how it operates can be very helpful for children when they grow up.

 

Weird Insurance Claims

The lady who kept getting injured

The 72-year old gambling addict, Isabel Parker, from the USA managed to get herself injured no less than 49 times during her long career of self-inflicted mishaps. She would make herself slip and fall at liquor stores, supermarkets and department stores, then claim from her insurance company. These rituals of falling and filing claims kept her so busy that it was almost like a fulltime job. Between 1993 and 2000, she managed to collect over $500.000 from her insurance company but eventually pleaded guilty to no less than 29 counts of insurance fraud.

The outcome

The retiree was convicted to four years of house arrest.

Waiter, there is something floating in my soup!

Carla Patterson tried to get a $500.000 insurance settlement from a restaurant in Virginia after finding a mouse in her soup. This may sound like an easy enough trick to pull off, but investigators are very clever these days. They discovered that the mouse had no soup in its lungs, indicating that it hadn’t been cooked with the soup and could only have landed in her bowl if she had put it there herself.

The outcome :

The lady was sentenced to one year behind bars for extortion, even though she maintained her innocence.

 The man who took things a little too far

Executive Marc Thompson was up to his ears in debt. So much so that he torched his home and killed his 90-year old mother in an attempt to claim $730.000 in insurance money. One evening, he led his mother to the basement where he had splashed flammable liquid. He then tossed a match and set the place alight. As his mother was psychotic, took medication and had mentioned committing suicide in the past, Thompson had staged the fire to look like his mother’s suicide. His plan of the perfect alibi – death by smoke inhalation – literally backfired when, after federal investigation, the truth was uncovered.

The outcome :

Of course, no insurance payout and it will come as no surprise that Thompson was sentenced to 190 years behind bars for premeditated murder and insurance fraud.

Cigared for life

A lawyer from North Carolina insured a box of 24 expensive cigars against storm damage, flooding and – you’ll never guess – fire. Within a month, the man filed a claim with his home contents insurance company, stating that his cigars had been lost in a series of small fires. Assuming that the man had smoked them, the insurance company refused to pay. A court later ruled, however, that the insurer did indeed owe the policy holder $15.000 to replace his cigars as they had never included a definition of ‘unacceptable fire’ in the insurance policy.

The outcome :

Not only did the insurance company pay for the claim, they also had the lawyer arrested on 24 counts of arson and insurance fraud and he was fined $24.000.