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Category Archives: Finance

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.

 

Why Personal Accident Insurance Policy?

Accidents are not restricted to the roads alone, it can happen even when you are indoors. You can slip from the stairs or fall in the floor or suffer from burns while cooking. In any such situations, immediate medical treatment is required which means unexpected medical costs. To deal with such situations what you need is a personal accident insurance policy. It protects you and your family against losses which arise from a personal accident. The accident can be a minor or a major one, but the policy will provide compensation for medical expenses. In the event of a severe loss, the policy will pay a lump sum. The policy pays out for situations such as :

  • Permanent total disablement
  • Permanent partial disablement
  • Temporary total disablement
  • Permanent disablement or loss of life while travelling in a public transport
  • Daily cash for hospital

The policy also pays out if personal injury has been caused by acts of terrorism. Coverage offered by this policy is applicable inside the country. The period of coverage is for a period of twelve months, after which the policy has to be renewed.

There is no need to undergo any medical tests to avail this policy. Furthermore, you also don’t have to provide documents. It can be applied by anyone from 18 to 65 years of age. If you take a floater policy, coverage is extended to your spouse and two dependent children

 

Fire Insurance Policy

Fire policy is useful for all and sundry who own property. Fire can happen due to an accident, arson, violence, sabotage as also by an act of nature, like lightning in the rainy season. It can happen suddenly and the losses may be at times quite heavy. So it is better to insure one’s house against fire by paying a small amount of premium yearly and securing you financially against huge losses when the event happens. A kind of property insurance covering losses due to fire often comprise coverage against smoke or water damage also. You must at least go in to buy a fire insurance policy to secure your property and contents of your house from destruction because of explosion, fire, lightning.

Fire Insurance Policy

Fire insurance policy is particularly useful for ones who own property in trust or in commission or have properties as individuals or in financial institutions, having interest in the financial property. Movable and immovable properties at a specific location, e.g. plants, machinery, buildings, fittings and fixtures, stocks and stocks in process, furniture, contents, stocks in suppliers’ and customers’ locations, devices temporarily shifted for repairs, etc. can all be insured. Cover will include:

a) Fire

b) Lightning

c) Explosion/Implosion

d) Landslide / Rock slide

e) Bursting of water tanks, machinery and Pipes, etc

f) Flood, Storm and Inundation

g) Damage by aircraft

h) Riots, Strikes

i) Missile testing exercises/operations

j) Bush Fire

Sittings and discussions with a few insurers will further earn you very many fascinating covers and range of discounts, facilities and bargains, like cheap premiums, good alternatives and subtractions, cash benefits from to time, Non-claim Bonus (NCB).

Mode to Buy Fire Insurance Policy

The sane people say that you listen to everybody but follow only what your own mind says. This advice equally applies while buying an insurance policy. Some may say buy this way; some may say buy that way. Some may suggest buy from this agent, some may say buy from that agent. But one must not forget that businessman is first a businessman and then anybody else. Before making a mind to see some insurance agent, make yourself very clear as to what you want to buy, rather make a list of your customized compulsory demands and expectations. This will give you a good framework under which to frame your queries, instead that the insurance agent tries to induce you to his points of view. After having done this much home work, you go online and demand from some insurers online insurance quotes for fire insurance. Select a few catchy quotes and scrupulously follow them. Then reach the respective insurance agents one by one. Question them one by one to the maximum extent possible vis-a-vis the list of specifics you have already formed. While questioning, don’t feel hesitant at all. All said and said, it is you who are spending the money and before buying the insurance, therefore, it is you who should be fully satisfied about return on your investment. It should only be to complete satisfaction of yourself that you should opt for the best insurer.

 

The Variables which Influence Your Motor Insurance Premiums

Spot of living arrangement

Spot of living arrangement assumes a real part in deciding your car insurance premium. In the event that you dwell in an enormous city then there are likelihood of mishaps & robbery. This can request more prominent premiums. Likewise, if an individual dwells in sloping ranges which are inclined to seismic tremors or avalanches then there is danger of characteristic cataclysm. This again requests more prominent rate of premium. In any case, if an individual dwells in okay ranges then premium charged will be less.

The occupation

In the event that the individual’s occupation obliges him to drive a great deal & on the off chance that he utilizes his auto then his car is going to be more often than not out and about. Subsequently, the dangers of mischances are high.Essentially, in case you’re driving a considerable measure then premium will be higher.

Your auto sort and auto model

Your auto’s model and your auto’s make focus certain danger components interfaced with it.For example, the Suvs will any day execute better amid crashes giving more prominent security. Consequently, damage if jumped out at the inhabitants in addition to the vehicle may turn out to be less serious.Though, the top of the line vehicles and auto models have a tendency to acquire more prominent repairing expenses. Along these lines, they would cost an individual to pay more to protect the auto.

Driving history

This is a vital variable which goes in deciding your protection premium.For example, if an individual has clean record where he/she has no mischance histories then he/she can get rebates. The rebates can go up to half through No Claim Bonus.

Age

Age likewise is an alternate component which decides the premium rate.On the off chance that there’s a young person of 18 years then he/she has a tendency to enjoy towards high hazard driving. Thusly, notable age sections or gatherings may need to pay more noteworthy premium than others.

 

How to Claim Car Insurance Premium?

Car insurance premiums might be high. Therefore, its imperative to guarantee how to make a fruitful claim on your car insurance.

Advise your back up plan

Advise your back up plan at the earliest opportunity about the mischance. This empowers your guarantor to gather all the subtle elements of the mischance and afterward you profit a case on your car insurance. Certain guarantors will send you a cases structure or permit you to seek a case on the web.

Don’t freeze

On the off chance that you confront a mishap, don’t frenzy and attempt to head out in scurry. The principal thing you ought to guarantee is to collect your vehicle in a protected and secured place particularly in case you’re amidst a street.

Things to recall while requisitioning a case

In the event that the episode is a consequence of your deficiency then you may require to pay an extra charge when you request a case.

How does the case function?

The procedure of case shifts crosswise over diverse guarantors. Therefore you’re obliged to take after the guidelines and regulations of your car insurance organization.

In any case, regardless one must illuminate his/her back up plan as quickly as time permits amid any episode. Likewise the individual must gather all the obliged data identified with the mishap which incorporates the contact data of other concerned gatherings, the wrongdoing reference number & an exact record of what happened at the spot of episode.

Keep up the duplicates of every last one of archives and receipts connected to your case.

Your car insurance organization may require you a considerable measure from inquiries and solicit you to give part from data. This might be because of the substantial number of insurance misrepresentation cases as saw in the previous years. Regardless, its fitting to furnish your guarantor with all the right points of interest as asked by your back up plan.

Imagine a scenario in which the case gets rejected.

At the point when such a case emerges where the guarantor rejects your case, you ought to evaluate the purpose for the same by sending a composed articulation or specifically corresponding with your safety net provider.

A typical question which can emerge is about the difference on the valuation. There could be a circumstance when an individual’s car is composed off & the manager can’t help contradicting the valuation gave by the car insurance organization.

For this situation, masters remark that generally the vast majority of the back up plans are reasonable. In any case, if there should arise an occurrence of any debate on valuation, the concerned guaranteed must help his/her claim with however much correct data as could reasonably be expected. For instance, on the off chance that you have photos which uncover your vehicle’s condition preceding the mischance, keep in mind to impart these photographs to your car insurance organization.

 

Learn More about Home Insurance

A good home insurance plan provides coverage for the following :

  • Damage to the structure of the house due to natural calamities or fire break-out
  • Loss to content and valuables of the house

General features of home insurance

  • Coverage for fire, theft, explosion, burglary, natural disasters and contents of the house
  • Coverage towards jewels and gems, if required
  • Coverage towards electronic devices, if required
  • Covers damage to the house periphery
  • Flexible option of premium payment on monthly or annual basis
  • Online purchase option to save time and effort
  • Installation of safety devices like theft alarm, smoke alarm and any other such devices help in availing discounts on premium
  • Insurance is extended on rented and owned properties

Getting home insurance quote

Home insurance quote depends upon various factors :

  • Rented or owned accommodation
  • Type of property: flat or individual house
  • Property age
  • Coverage type: structure or content or both

You can easily get the premium quotes online also by providing the above details.

Determining coverage amount

Coverage amount is the maximum limit that would be paid if some damage occurs to the house. The major factor that determines the coverage amount is reconstruction cost of the house. Reconstruction cost is ascertained by the following formula:

Total constructed area*Construction cost per square feet

Many people assume that cost of the house is taken into consideration while calculating the coverage amount. However, this is entirely a wrong assumption. The market value of the house may be much more than the reconstruction cost of the house and it is not beneficial in evaluating the loss to the structure. The insurance aims to cover the damages/loss and not to provide profit to the insurer.

Going for home insurance is a prudent decision as your lifelong saving demands a robust protection. You can definitely rest at peace once you are sure that your shelter is safe. Hence, do not wait for a calamity to define your define your home insurance priorities but act now.

 

Dynamic and Static Risks

Speculative and Dynamic Risk

Dynamic risk is a condition where the profit or loss both are possible. Do not be confused, for example the conditions like investing in real estate, stocks, betting, etc. The result of speculative hazard can be profitable or loss, but most of the important thing that these types of hazards are uninsurable. Dynamic danger also includes the danger to invest in a new market, expand areas of operations, purchase new equipment and others.

Pure or Static Risk

Static risk is a condition, there are only possibilities of loss or no loss. The result of pure danger is only the loss or may be no loss, but it will never be beneficial. You can better understand the pure threat with the examples like occupational disability, premature death or medical expenses, property damage due to fire, flood and others. Three major types of hazards are included in pure risk which are liability, personal and property risk.

Personal risks are the type of risks that affect directly to an individual. The great example of the personal threat is poor health, unemployment, premature death or old age. This case of threat involves the possibility of additional expenses and loss of income.

Liability Risk is a type of pure risk. Liability hazard is of two types, that is a general liability and product liability risk. The difference between these types of dangers is that general liability hazard indicates the risk of the company’s procedures which are the reason behind of damage to the company’s employees or third parties and product liability hazard which specify to the danger of a product launched by the company and which can be the reason behind of damage to a person or property.

Property Risk is a type of danger which can be the reason of property damaged. Property can damage as the result of fire, hail, windstorm, or other causes.