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Insurance data – an eye opener

insurance claim form

When we say Insurance, what comes first in your mind? answer would be, LIC.

And if I further probe, what LIC means? answer would be, money back plan or some investment plan.

I was reading an article today in Mint, “Life insurance policies continue to die early”, prompted me to write this blog. As per the article, which is based on data analysis from IRDA (persistency ratios), it states that 2nd year renewal on Insurance policy stands below 80%, and 6th year renewal stands below 50%. Which means, every 2nd customer, is not renewing insurance policy after the 5th year. Why?

The surrender value for most of the polices, post 5th year is not attractive, as has big penalty by the insurance companies to discourage same. But still customers are not renewing.

My understanding & working with our customers, Insurance is pushed in India, mainly based on investment philosophy, with a massive pay-out as a carrot to the agent for the first year. First year pay-out can go as high as 50% of the premium in some cases & in the range of 2% to 5% for the subsequent years.

Insurance agents, I must say, are doing the job very well. To earn this handsome reward, they are going the extra mile to push, whether in the form of tax saving, or some goal based plans, or some other incentive offered. I still remember my father being very happy one day, as Insurance agent has given him Rs.5000/- in cash back, for signing the policy.

Customers, like any of us, first are hard wired that Insurance means money back, saves tax & safe avenue (may be some incentive, like my father) and 2nd agent is related in some ways (relation, friend, known RM, favours or gifts), that they cannot go wrong or do wrong 😉.

2nd year onwards or later, either thru some other advisory talk, or reading the policy fine prints, or doing basic calculation, comes the blooper. Now what to do? Surrender or continue? And that is what is happening, as per this article.

My advice to everyone, please & please read the policy document before investing.

Insurance is a subject matter of solicitation, you should consider the Investment objectives, risks, charges and expenses carefully before investing. And above all ask questions.

Happy Investing!!

Do It Yourself (DIY) accounts – a success or a myth?

Do it Yourself

Do it yourself (DIY) is the method of building, modifying, or repairing things, without the direct aid of experts or professionals. (as per Wikipedia)

Well, it’s the latest buzzword in town, where everyone wants to use services on their own. And as a matter of fact, service providers are offering accounts & services, with DIY embedded in that.

But how far is this true or successful?


My Dream & What I Do


Well, it’s not my story, but “OUR” story, as I am no different than any one of you, with regards to how we all think or “DREAM” & how we act.

In this blog, I want to highlight interesting insights, on what most of us dream about, when we save our hard-earned money, and finally what we end up doing or our decisions on same. We conducted a small survey and asked basic questions on savings & purpose.

On Savings, it’s interesting, as well as surprising to know that, young one’s (below 30) are thinking on higher savings compared to seniors. Wow!

And, in terms of Purpose, brands which play important role in our daily life, comes later, compared to future savings like retirement & kid’s education. Excellent!

We score 100 out of 100, on our Dreams.


Credit Card – do I have the freedom?

Credit Card

I still remember the day, final month of my post-graduation, and we have these credit card chaps standing outside the gate. As would be, I went ahead & applied for the card 😉

My job is three months away, and here I have this plastic card, which gives me the freedom & cash, and within no time, I used up 50% of my limit, without any income in hand. All in the premise that first series of pay, I will knock off the outstanding.

Start of my Job, and again in no time, I guess 6 months, I am running an outstanding of more than 2 lacs and major portion of my salary goes in part-payment, with a fat interest. Each month I commit myself on reducing same, which happens to some extent… but this cycle never stops.

For next four years this cycle continued, where I would have payed these credit card companies, more money in interest than the actual outstanding. Finally, one day I took the courage & took out my scissors, & chopped the card into pieces.

Though after some time, I applied for a credit card again… Not for availing the credit, but towards cash-less payments. I have not paid any interest since then, as I repay my entire outstanding every month now.

Let me now highlight two dangerous points on credit card:

High Interest Payment:

Usually, this is upward of 36% annually or 3% every month on outstanding amount. Say for instance, you have an outstanding of 50k, you have to pay 1500 as interest, for the month.

Best way to explain; if you give money to bank, towards FD, they will offer you 6% to 9% annual interest. But on credit card, they will charge you 36% or higher… it’s a criminal waste of money.

What’s the way out; either delay your purchase & save, or if it’s a must requirement, take a personal loan, which should come around 12% to 16%, based on your salary, ITR & duration of employment.

They block you from pursuing other Goals:

We are earning & saving money for our dreams or future goals, like buying a car, house, kid’s education, retirement, etc. By using credit card, paying part payments, which includes interest cost, you are in-short delaying your savings & future goals.

It’s a known fact; that early saving rewards you with higher returns than late savings… Power of compounding works better for long duration. Read my blog – Link.

If credit card is so bad, what is it good at:

Cash-less working:

Credit card helps you transact, offline & online without cash. You don’t have to bother about withdrawal or deposit of money today. Even your utility bills & household payments can be done thru the cards easily.

Emergency funds:

Credit card comes handy, or acts as a hedge towards any emergency or unplanned requirement of money. You have a preapproved limit and same can be used, whether to transact or even withdraw, when the requirement or emergency strikes.

Finally, it’s all about your discipline on your spending or when to use. People say, they don’t have control when they have card, and end up spending more. My logic is all about having a discipline. If in case you cannot control your urge, use debit card instead.

Happy Savings!!!

Financial Planning Report – too complicated!


We are living in a world where “complicated” sounds great than “simplicity”. As “complicated” contains big data, fancy graphs, unheard terms & jargons, multiple pages and finally a confused look on our face. What do I do now? On the other hand, when we have “simplicity”, usual remark… I can do it myself. 😉

I am referring to a customer’s “Financial Planning Report” or a “Wealth Management Report”.

Whether you have seen one or someone trying to show you one (sell)… believe me, it’s like reading a multi-page research report and finally you asking this question again, what do I do now?

Idea of any report is to make you take decision, and when it comes to financial report, that too on your hard-earned money, it should be able to answer same in simple language, like whether they will have enough money, and if not what should they do about it, or on what next?

I guess, our dear friends, the financial planners,have been hoodwinked into believing that “complicated” is good.Part their fault, & part customer mind-set, as “simplicity” means, I’ll do it myself. It’s also ridiculous to think that they can accurately forecast each item of income and expenditure for the next 10, 20 or even 30 years.

My understanding; what one sees or gathers from these complicated reports, can be easily delivered thru a couple of simple excel spreadsheets and a hand-held calculator, which can create lifetime cash-flow models with numbers pretty close to those churned out by these complicated reports.

My logic of a report; to convey the meaning in the most simplest way, such that one can take an informed decision. I as a customer doesn’t want to see tables & data, one can keep same as annexures (as its required), but show me analysis & graphs, which I can relate & act upon.

When we started, our only challenge was to bring simplicity to the world of complicated investing, financial planning or even wealth management.

To know how a customer thinks, read my blog: “client priorities – client first”

Women’s day – Let’s Stop “Girls Can’t Do” Stories


International Women’s Day (IWD), originally called International Working Women’s Day, is celebrated on March 8 every year. In different region’s the focus of the celebrations ranges from general celebration of respect, appreciation and love towards women for their economic, political and social achievements. (as per Wikipedia)

Benetton, known for its wacky campaigns, has come out with a thought provoking campaign again, why ask or cry for equality with men, just go and grab it yourself lady. Similar stories are now emerging on age old fairy tales, where princess is waiting for a prince for upliftment or change, and our little girl is asking, why she has to wait? & why she cannot do it on its own?


#*X – The most dreaded three letter word


I know what you are thinking. STOP. I am talking about TAX 😉

It is, as a matter of fact, the most dreaded word currently, since demonetisation. But from our parlance, where most of us fall under the mass-market or mass-affluent or even higher category, why worry?

We should only look at, how much more can one save, against annual earnings. Here again, it’s so simple that we run to CA’s or Tax consultants to understand same & decide.


Client Priorities – Client First

Customer priorities

In a recent study by Investor’s Research Inc., clients were asked what their priorities were with their financial advisor***. Here were their top six priorities:

1. Understand my situation
2. Educate me
3. Respect my assets (no matter how small)
4. Solve my problem – don’t sell me product
5. Monitor my progress
6. Keep in touch

*** From the book, Story selling for financial advisors, by Scott West & Mitch Anthony

Very simple & heartfelt.
I guess, most of us fall in the same line.

It’s no surprise and a great honour for us at today. Why?
As we have designed & built our platform, process & advisory based on above philosophy.


Why a term insurance policy is the best life cover option?

Life Insurance

Gautam, a 28-year-old IT professional, has got married recently. His parents are financially dependent on him. He saves Rs.15,000 each month. He thinks his insurance requirement would be Rs. 50 lakh. For the term insurance plan that his relationship manager is recommending, his annual premium will be Rs. 10,000, payable over 30 years.

He thinks a term insurance is a bad choice because he will not get any ‘returns’ on it. It seems unprofitable to him, as he is unlikely to get back the amount he pays as premium. Is term insurance really a waste of money? Should Gautam consider an insurance cover which provides a good ‘return’ at the end of the tenure instead?

First, Gautam needs to be educated about the concept of insurance and the purpose of buying it. The only way to do that is for him to imagine how his family would fare, if he were to pass away tomorrow. Wouldn’t it make things difficult for his wife and parents?


Ask what else (ELSS) – for tax savings schemes (80CC)


One can look at “else” or “ELSS”, for various tax saving schemes.

Where ELSS stands for “Equity Linked Savings Scheme”. These are Mutual fund schemes, which qualifies towards 80CC tax saving investment and offers one of the best returns & liquidity in the market, compared to any other schemes available.

Whichever way one wants to look at, i.e. First, “what else” or options one has on tax saving schemes? and Second, “what ELSS”, or how good they are?


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