Ten things to keep in mind while buying a Life Insurance Policy

Ten things to keep in mind while buying a  LIFE INSURANCE POLICY : It is necessary to remember to keep in mind the following when you buying a life Insurance Policy.......

1. Buy insurance for risk cover
2. Do not consider insurance as an investment option
3. Preferably buy only a term policy
4. Do not prefer savings-linked insurance policies
5. Remember not to be carried away by persuasive agents and publicity.
6. Buy ULIP only if your horizon is long term.
7. Not insure yourself if you are a lone bird.
8. Do not insure if you are wealthy. 
9. Do not insure the child
10. Read the fine print carefully

Insurance is a long-term contract generally spanning over decades. Also, these contracts have very little flexibility. A wrong insurance product can financially injure for a very long time, unlike many other financial products. Therefore, one should be extra careful and cautious when deciding on how much to insure, how long to insure, which policy to buy, etc. source:indiastudychannel

Common mistakes people make while buying Life Insurance Policy

According to Yashish Dahiya, CEO, Policybazaar.com (Etechaces Marketing and Consulting Pvt Ltd) a clear and encouraging trend is seen in the insurance market over the last 6 months, which is increasing customer awareness of products, a 5-10x rise in online comparison before purchase, and a higher correlation between requirements and product being purchased (increase in products like term assurance).

“However in general we still find that attitude towards life insurance continues to have a large element of tax savings as a motivator,” he adds.

Dahiya has cited certain mistakes which he hopes consumers will increasingly avoid with growing knowledge and discipline

1.          Thinking you have enough.

It is generally agreed that everyone should have some level of life insurance, most believe that it should primarily cover tax savings and other expenses. Very few people believe life insurance should replace the income of the person who died, in order to continue to support any children and other dependent family members. The idea of having a policy that paid out seven to 10 times one's salary -- an amount that could easily make sense for someone with young children -- sounded like an attempt to sell a needlessly large policy to people. Insurance bought for Tax saving purposes or investment purposes is not enough. Many people have only the insurance that comes from their workplace policies, which is usually not enough for people who want to support dependents after their death.

2.      Not Talking about it.

Life insurance is a topic people normally don’t want to think about or talk about. Though life insurance isn't required the way auto insurance is, it is morally required if you have dependents. You owe it to them to protect them from the loss of your capacity to earn an income.

3.          Relying on some Thumb rules.

Traditionally, people relied on a standard "six-seven times income" rule to calculate how much insurance they needed. But that's not a useful measure, because people's situations are so different. A single person with no dependents will probably need much less insurance than someone with five young children, for example. Instead sitting down and thinking about "the things you want to protect” is just the right way. How much would it cost to support your children in the way you want? To pay for their college or pay off the home loan?

4.          Ignoring your non-monetary income.

Many people, when adding up how much of their income they would need to replace, forget about the benefits that come with their jobs, such as health insurance and retirement account payments. You have a job, and your employer pays your health insurance costs, but if you died, and that subsidy disappears, your wife would have to get health insurance, so it would cost more. Life insurance, then, should pay enough money to cover the new health insurance bill.

5.          Forgetting the long term.

People often lose track of how long the life insurance payout should support their children and other dependents after they die. If you have a child who's 10, in 15 years, they'll be out on their own so in that case, term coverage that will provide support for those 15 years likely makes the most sense.

6.          Thinking that it's too expensive.

Many people mistakenly think life insurance is prohibitively expensive, but it's possible to find a policy that fits both your needs and your budget. Term insurance, which provides temporary insurance over a specific time period, is more affordable than permanent insurance, which lasts a lifetime. People in India use Life Insurance as an investment tool while they should be looking at managing financial risk for their dependents. But those on a tight budget tend to choose term insurance. One of our customers, a married man with one child and another on the way, decided he needed to take out Rs1.5 crores worth of term life insurance. His monthly payment, pending an assessment of his health, will cost between Rs1002 and Rs2109 per month.

7.          Forgetting to pay premiums/renewing a policy.

One of the most common mistakes people make is paying the premiums on time especially for life insurance and not renewing policies for health Insurance. Both these activities are as important as making your home loan payment or paying your children’s school fees. 

While the IRDA in its recent notification, effective 1st June 2009, has changed the way Health Insurance policies are renewed by providing for a 15 day grace period, in the case of life insurance it is imperative to pay premiums on time to ensure that in case of a mishap your family is adequately protected. 

Even the Life Insurance Council, the industry body for all Life Insurance companies in India, which has been working towards creating adequate awareness about life insurance, has reinforced that Life Insurance is a unique asset class and needs to be incorporated in an individual’s financial plan. Source:Sakaltimes...

Will you be ready to retire?

Most of us want to retire someday, but not everyone realizes how important it is to start planning for retirement while you are still young. The days of past generations, when people were able to retire with their pensions and not work for a few decades, are gone—that is not the future we have ahead of us. If you want a secure retirement, you need to invest in a retirement plan now. It might seem daunting at first, but once you get the ball rolling, it will be well worth it in the long run.

If you need help figuring out how to start investing and saving for your retirement, you should look up local, free workshops in your community. I know most cities offer free workshops, so check with your community centers and libraries for more information. After a free session, you should be armed with enough information to continue alone, or feel more comfortable paying a consultant.


Simple Steps to Start Saving
You need to identify how much money you will need to retire. This means you will need to project what the cost of living could be by the time you retire. Once you retire, you will no longer receive a regular income, but will have to live off of whatever you have put away. The best way to invest wisely now is to know what kind of goals you are working towards.

Once you know how much you will need, figure out how much you should save now. Creating a savings plan will keep you on target towards your larger goals. Try to maximize your contributions to tax deferred plans, like an employer-sponsored retirement program.

When investing, you need to have realistic expectations for returns. You don’t want to plan on earning more than you actually will. At the same time, you need to understand the kinds of risks you are willing to take with your retirement savings. When you make risky investments with your retirement savings, you many have intense emotional reactions if things don't go as planned. Think about whether the risk is worth it before investing.

Once you have a plan in motion, you need to evaluate your progress at least once a year. This way, you can see what needs to be changed or adapted so you can successfully reach your retirement goals. Make sure you are aware of costs and fees with any investment plans you decide on—read the fine print.

Now that you have an idea of what you need to do to save for your retirement, put your plan in writing. Writing down your goals and plans will help you stay focused and motivated to stick to the plan.

Take your written plan with you to any workshop or consultation you attend. Preparing this ahead of time will will help you know which questions to ask and which parts of the workshop most apply to your circumstances.

Sensex may hit 19,500 this year: Experts

Driven by the election outcome, the benchmark index Sensex could catapult to 19,500 level this year, provided the government pushes through the reform agenda, analysts said.

Market experts believe that the reforms expected to be carried out by the new government may keep the market sentiment upbeat and propel the index to regain the levels, it had seen in 2007, in the months ahead.

"Our upside target for the Sensex is 19,500 this year which the index may climb if the government surprises us with a phenomenal budget," Morgan Stanley managing director Ridham Desai said in an investor summit arranged by television channel CNBC TV 18.

However, more probability for the index is to remain in mid-15,000 levels or about 10 per cent higher than current levels, he said.

The financial sector reforms which are there before the government include raising FDI cap from present level of 26 per cent from 49 per cent through amendment in Insurance Act, pension reform and banking sector reforms.

Echoing similar view Reliance Capital Asset Management equities head Madhusudan Kela, 19,500 levels were possible this year but would depend if the government aggressively carries out the expected reforms.

Meanwhile, if the global market turn downwards and the government fails terribly to keep up public expectations, the index may see a level of 8,500 on the downside, Desai added.

Further, if the S&P 500 index falls below the 666 points level then the domestic stock indices may give in to pressure and plunge into negative territory, analysts said.

The benchmark index Sensex has climbed around 40 per cent to 13,800 levels, so far, this financial year.

Besides, foreign institutional investors have also turned bullish on Indian equity markets and have made net investments to the tune of Rs 14,586 crore (around $3 billion) in May so far.

According to Ramesh Damani, member BSE, financial sector reforms as well as disinvestment should take place as it will be good for the sector and the economy as a whole.

The coming Budget should give some signal as far as reforms are concerned, Damani said.

Last year, the government tabled the Insurance Reforms Bill in the Rajya Sabha aimed at increasing the cap on foreign investment in private companies in the sector from 26 per cent to 49 per cent.

Source: rediffnews

The best & worst of IPL 2

IPL 2 has finally drawn to an end. Cricket junkies needn't despair; they'll soon get their next fix from the T20 World Cup. Meanwhile, here's a (mostly) tongue-in-cheek look at the highs and lows of this year's tournament.

Finds of the tournament: Manish Pandey and Shadab Jakati. A lot more will surely be heard of these two young men. And Dirk Nannes, while no spring chicken, had a dream IPL debut right up till the semi-final, where it all went horribly wrong for him and Delhi Daredevils.

Most overhyped IPL debuts: Kamran Khan was supposed to be Shane Warne's secret weapon but himself ended up as the biggest victim of his suspect action. Flintoff and Pietersen hardly justified their fees. In fact, Pietersen's return to England after five matches, which put Kumble in the driver's seat, was probably the best thing that happened to Royal Challengers. Finally, Mashrafe Mortaza spent almost the entire tournament on the bench and when he did play, promptly handed Rohit Sharma a gift-wrapped 26-run over.

Evergreen legends: Hayden, Gilchrist, Kumble and Warne all proved that retirement doesn't hurt the skills of true champs. If anything, it may actually help. By the way, I was furiously criticised for picking Kumble in both my over-35 XI and IPL dream XI. No surprise there, even great batsmen have underestimated him over the years -- and paid for it. But after his amazing spell in the final, I hope I'll be forgiven for crowing a bit.

Incidentally, in a previous piece, I'd asked 'Do retired players make best IPL captains'? As it turned out, both the finalists were led by men who have retired from international cricket (Kumble and Gilchrist). Excuse me while I go caw-caw.

Sad sights: Not every great shone. Sourav Ganguly played a couple of sizzling knocks but was otherwise largely disappointing. Sachin Tendulkar confirmed, yet again, that captaincy is not his cup of tea, in any format. VVS Laxman and Chaminda Vaas were quickly benched after some disastrous performances. But at least they all got a chance to play. Poor Glenn McGrath never got to bowl even one ball in anger.

Innings of the tournament: Many contenders, including the two centuries by de Villiers and Pandey, and Ross Taylor's 33-ball 81 against Knight Riders. For sheer impact and breathtaking brutality, though, it's hard to beat Gilchrist's 35-ball 85 which left the Daredevils dazed.

Best over by a bowler: Again, lots of contenders in a tournament which saw bowlers playing a big role and three hat-tricks. My vote would go to Irfan Pathan denying Rohit Sharma and Deccan Chargers right at the end, and Munaf Patel keeping his head even as Mumbai's batsmen lost theirs in a dramatic final over. Of course, this being cricket, Munaf was smashed for 25 runs in one over by Delhi Daredevils shortly thereafter.

Talk of irony: IPL 1's No. 8 won IPL 2, and No. 7 finished second. Also, the highest score of IPL 2 was 211-4, by Rajasthan Royals. The lowest score? 58, also by Rajasthan Royals!

Most thrilling match: Many matches went right down to the last ball, but only one went beyond: the Super Over which was won by Rajasthan Royals. No one who saw that match will forget it in a hurry.

Sweet revenge: The next time Rajasthan Royals and Knight Riders played, the Knights beat the defending champs to knock them out of the tournament. Also, Royal Challengers were thrashed by 92 runs by Chennai Super Kings in their first league encounter, but responded by beating them twice, including in the semi-final. And Deccan Chargers lost to Royal Challengers in a largely tension-free final league match, but beat them in the game that really counted.

Funniest moment: One frisky dog successfully foiled the best efforts of ground staffers to lure him off the field, even as several strapping cricketers maintained a discreet distance.

Saddest moment: Brendon McCullum's despair as he played a blistering knock, then took a brilliant catch, and still ended up on the losing side as Ross Taylor played a blinder for Royal Challengers.

IPL owner we most want to hug: Preity Zinta. The finance ministry should consider imposing a fringe benefits tax on all the Kings XI players at the receiving end of Ms Zinta's jhappies.

IPL owner we most want to scold: Shah Rukh, Shah Rukh. Good boys don't take potshots at living legends, especially when those legends go on to be proved right. If someone criticises your movies, will you now say that they should go make their own? In which case, who will watch yours?

Most derided person associated with IPL: John Buchanan's weird theories and weirder decisions ensured he'd win this one hands down. I wonder if there's any truth to the rumour that he will be replaced next year by Steve Waugh? Given Waugh's past chemistry with Dada, that could ensure that Knight Riders continue to provide lots of off-field entertainment. But at least they can take heart from Deccan Chargers, who finished last in IPL 1 before going on to win IPL 2.

Most cheered person associated with IPL: Naturally, Fake IPL Player. We lapped up his innuendo, chortled at his wicked sense of humour and generally tracked his blog with the kind of enthusiasm usually reserved for chartbusting TV soaps.

One feature we don't want to see next year: Mr Lalit Modi, give us a break from strategy breaks. Advertisers may love them, but nobody else does.

One feature we definitely want to see next year: Three cheers for the cheerleaders! When IPL returns to India, can we please watch them in action without any fuss?

And finally, a chain SMS that's doing the rounds that I can't resist putting up: Next year's IPL will be in Pakistan. The cheerleaders will wear burkhas, the security will be provided by the Taliban and al-Qaida and there will be a bomb blast after every sixer and wicket!

Cheers and see you soon at the T20 World Cup!

Source:timesofindia---blogs

10 Largest Banks in the World

The list of 10 largest banks in the world in terms of market capitalization size, as released by Bloomberg on February 2008. Market capitalization (aka market cap) is a way of measuring the corporate or economic size of a public listed company.(capitalization could also represent the net worth of a company according to public opinion.)

The latest table reveals some major surprises, and this 2008 list is considered one of the most unlikely ranking. The most noticeable change is the breaking up of US domination, spearheaded mainly by the Asian banks, notably from China, which are making the banks in the western world sweat.
Citibank, which recently has been embroiled in financial crisis, became the biggest casualty, slumping from top position to 7th. Full list below.

1. Industrial & Commercial Bank of China, ICBC

The Beijing based ICBC Bank underwent one of the most remarkable faces of growth barely 2 years after going public, which gives a clear indication of investors’ preference in the emerging China market. ICBC offers a wide range of personal and corporate banking services which include loan, deposit, credit card, underwriting, trading and currency settlement.

ICBC was listed simultaneously on two exchanges – the Shanghai Stock Exchange and Hong Kong Stock Exchange in 2006, making it the first and only company to do so. ICBC has won numerous accolades and awards from various international magazines including Bankers, Global Finance, The Assets and Finance Asia.

Market capitalization – US277.514 billion. Previous ranking (as of Jan 2007) – 4.

2.Bank of America (US)

Bank of America (BoA) has now taken over Citibank as the biggest commercial bank in the United States by market cap and deposits. Started in California, BoA then grew its operation to Washington, and soon began a rapid expansion nationally and internationally.

In the process of getting where they are today, the bank has gone through good and bad times. In late 1980s BoA suffered huge loss as a result of non-performing loan, which saw the then CEO, Sam Armacost fired and replaced. It almost fell into a hostile takeover but came back with a bang and became one of the biggest gainers in a decade. The bank retains its position in the second spot.

Market capitalization – US195.933b. Previous ranking – 2.

3.HSBC Holdings (UK)

Earlier this year, HSBC was named as the world’s most valuable banking brand by The Banker Magazine. The bank was incorporated in England and Wales, with its main office located in London. In 1992, HSBC was involved in one of the world’s largest banking acquisition, after assuming full ownership of Midland Bank.

The merger also saw the beginning of HSBC setting up strong market presence, particularly in Europe. Apart from United Kingdom HSBC now also has significant operation in France, Czech Republic, Germany, Ireland, Switzerland, Turkey as well as Malta. Just like Bank of America, HSBC maintains its ranking.

Market capitalization – US176.788b. Previous ranking – 3.

4. China Construction (China)

he bank was first established as the People’s Construction Bank of China and was changed to the current name in 1996. The bank’s rise to prominence is also helped with the involvement of Bank of America which injected some significant amount of investment for the past few years. In 2005, the China Construction bank landed into a scandal that involved the Chairman of the company, Zhang Enzhao.

Zhang was alleged to have received one million dollars bribe from an American company, which in return asked for an award of contract. Zhang eventually resigned from his post. The bank has more than 13,000 branches across its native country China, as well as active operation in Singapore, Hong Kong, German, Africa, Japan and Korea.

Market capitalization – US165.234b. Previous ranking – 7.

5. Bank of China (China)

The third and final bank from China to make it to the top 10. In China, there is the term referred as the ‘Big Four’ banks and Bank of China is one of them.

Bank of China is the first bank established in the land of the dynasties. In the earlier years, the bank acted as the Central Bank but then its role was replaced and then converted into a full-fledge commercial bank. While the bank has overseas operation in Australia, United Kindom, Canada, United States, Brazil, Japan, Philippines, Malaysia and Korea, the overseas business only accounts for less than 5 percent of the company’s overall revenues.

Market capitalization – US165.087b. Previous ranking – 6.

6. JPMorgan Chase (US)

JPMorgan Chase offers investment banking, financial services, wealth and asset management, and private equity. The current entity is a result of a series of mergers, with its original name did not sound anything like the current, which was the Chemical Banking Corporation.

JPMorgan is based in the downtown of New York, Manhattan. Additionally, the investment wing of the bank operates a number of offices around the world, with major presence in the United States, London, Tokyo, Singapore and Hong Kong. BusinessWeek ranked JPMorgan in the Top 10 Best Places to Launch a Career in 2006.

Market capitalization – US159.615b. Previous ranking – 5.

7. Citigroup (US)

A year ago, Citibank was the largest bank in the world but how different it is today. From a world champion, the group slumped to 7th, only in a space of few months. The bank was established almost 200 years ago by a number of merchants in New York.

After going through changes in ownership, the bank stamped its presence as the country’s largest bank in 1865, and soon became the first US bank to set up operation in overseas. Mergers and acquisition followed and the bank could only grow larger and larger. The group faced one of the toughest test for the last 12 months with the weakening US economy and the collapse of the subprime mortgage market.

Market capitalization – US140.698b. Previous ranking – 1.

8. Wells Fargo (US)

Formed by the founders of American Express company, Wells Fargo has its headquarter in California and the bank offers specialized financial services such as asset management, real estate business, debt products, advisory, securities investment and capital management. The group itself, however, is involved in more than 80 distinguished business areas.

Wells Fargo became the first bank to have introduced internet banking after introducing web access to its customers in 1995. The bank also works closely with small and medium sized companies, giving small business owners access to business loans and lending.

Market capitalization – US112.365b. Previous ranking – 11.

9. Banco Santander (Spain)

Banco Santander is the largest bank in Spain, and the second largest in Europe. The bank, which involves in retail banking, asset management and insurance, and global wholesale banking, employs more than 120,000 people worldwide, serving 68 million customers, a figure higher than the whole population of Spain.

Altogether, the group operates in more than 10,000 branches worldwide. The group is also one of the premium sponsors for McLaren-Mercedes F1 team. Banco has strong market presence in Portugal, United Kingdom and in Latin America including Brazil, Mexico, Chile, Argentina, Venezuela, Uruguay, Colombia, Peru and Puerto Rico.

Market capitalization – US109.862b. Previous ranking – 12.

10. Mitsubishi UFJ Financial, MUFG (Japan)

Mitsubishi UFJ Financial groups runs The Bank of Tokyo-Mitsubishi UFJ, which is a result of a merger between The Bank of Tokyo-Mitsubishi and UFJ Bank Limited in 2006. The group, which is listed in five stock exchanges – Tokyo, Osaka, Nagoya, New York and London, is presently the largest financial services company in Japan in terms of size of assets.

Headquartered in Tokyo, Japan, the company holds a total asset of US1.2 trillion and is one of the biggest companies in the Mitsubishi Group. MUFG is now headed by the the President and CEO, Nobuo Kuroyanagi, an MIT business graduate.

Market capitalization – US105.412 b. Previous ranking – 9.

Source- jaggerkieth