Health insurance is a cause of concern for everyone. With rising medical inflation and annual hike in health insurance premium, quality healthcare seems to be a distant dream, except for the elite who can afford the expensive hospital treatment or pricey health insurance premiums, the activists said.

Interacting with Mr. Hari Narayan on the forum, Mr. Harsh Roongta, CEO, Apnapaisa.com raised a very pertinent point of standardization of policy wordings in policies by all insurance companies with particular reference to exclusions and pre existing diseases as customers find it very difficult to interpret.

The Forum revealed that one of the most common issues insurers face are rising health insurance premium, inability of senior citizens’ to increase sum insured, TPA (third party administrators) and intermediary issues and restrictive mediclaim policies. This was followed by perpetually discussed topic of claim rejections. There were complains that more and more claims are getting rejected for impractical reasons and cashless facility restricted to few hospitals.

On this Mr. Hari Narayan pointed that the system was working well, by and large. He pointed out that last year out of the 47 lakh claims received, 9.4 lakh claims were rejected. He pointed out that 80% of the claims are met and the industry has paid out as much as Rs. 5,885 crore. More than half the claims were settled within 30 days. He pointed out that the most frequent claims are from fever due to unknown origin followed by cataract.

He asserted that sensible universal health cover for masses is certainly a possibility in India. The government-initiated products like RSBY (Rashtriya Swasthya Bima Yojna) has done well for the masses with premium as low as Rs. 400 per family for a cover of Rs. 30,000 sum insured. They cover primary and secondary health care. Arogya Shree is another success story in Andhra Pradesh which covers tertiary health care i.e. covering only if any procedure is performed. A product, which is a combination of two can be promoted to masses for bulk penetration. This can be offered to certain section of society at nominal cost.

The other half of the population, which is at a higher income level can buy this product at a higher rate, which will still be much lower than an individual mediclaim product. The product may be up to certain sum insured. If anyone needs higher sum insured, they can buy ‘top-up’ policy to cover over and above the sum insured, which is offered by this mass product, Mr. Hari Narayan informed.

The last question of the forum came from Mr. Roongta who asked why critical illness policies are so sparingly available. And if available they are for very low sum assured, what to say of the fact that these are very difficult to get.

To this Mr. Hari Narayan agreed and said yes the critical illness policies are critical for citizen’s well being and these will be looked into.

While launching this facility Shri R.M. Malla, CMD, IDBI Bank said that “IDBI Bank has become the first Bank in the country to offer two way quotes to retail investors directed towards popularizing retail participation in the Government Securities market. Now with two way quotes, retail investors have an easy entry and exit route when they invest in Government Securities. Retail Investors could consider keeping a part of their investment portfolio in G-Secs, bringing stability in their investment income as well as contribute towards Nation Building”.

On this occasion, Shri Melwyn Rego, Executive Director, IDBI Bank, stated that “Investors would benefit by investing in G-Secs which are the most secured investments with liquidity and adequate returns as compared to any other investment in the country.”

But before going ahead one need to understand the broad features of this product and compare it with what is offered by the Reliance Mutual Fund. The ICICI is better than Reliance as it offers higher life cover, life cover continues after investment of 3years SIP and discontinued thereafter. The highlights of the ICICI Pru’s SIP insure are as under:

 The plan is offered to all major individuals whose age at entry is below 46 years and will continue till age 55 years.

 Insurance cover will be available to first/sole unit holder and not to second and third unit holder.

 The minimum SIP amount is Rs. 1,000 per month.

 The 1st year cover will be 10 times of monthly SIP, 2nd year it will be 50 times of monthly SIP and 3rd year onwards, life cover will increases to 100 times of monthly SIP. 100 times means less than 9 times of yearly SIP. Reliance calculates life cover differently. In case of Reliance the Amount of life cover available at any time is equal to the aggregate balance of unpaid instalments. So practically this wants to ensure that the investor at least get the amount equal to his principle investment planned anytime in case anything happens to the investor.

 Maximum sum assured offered to an individual across all funds is 20 lakhs. Reliance gives maximum cover of Rs. 10 lakhs sum assured across all funds.

 Life cover ceases if SIP for 3 years are not paid. After 3 years of SIP the life cover will continue but sum assured will come down to value of accumulated units subject to 100 times of monthly SIP instalment and also subject to maximum of 20 lakhs.

 The Insurance cover will cease in case of redemption or switch out of units whether partial or full before completion of SIP insure tenure.

 There is exit load of 2% in case of Reliance for premature redemption whereas the same is mentioned at 1% in ICICI Pru SIP insure if redeemed with in 1st year. The exit load of 1% is applicable even to SIPs without insurance. One needs to check how the charges of insurance will be recovered. Will it be charged on the basis of insurance cover provided to each unit holder or will be charged to the scheme.

 In case of death of the first/sole holder, the fund value with the sum assured will be paid to nominee. But in case of Reliance the no money is paid immediately on the death. Instead the sum assured is added to accumulated investments under the scheme and maturity value is paid at the end of tenure opted.

 In case of ICICI pru the death claim will not be paid in case of death due to suicide in the first year of cover. However Reliance has a permanent exclusion in case of death due to suicide.

 The death claim will also be not paid in case of death within 45 days from the commencement of the SIP instalments except for death due to accident. The said period is 90 days in Reliance.

 Death claim has to be submitted to Life Insurance Company directly and AMC will not entertain any request for claims. Therefore it is important for you to know who life insurer is.

 There is a separate form where in investors have to give additional details required for life insurance cover. One has to be very careful and it is always advisable to disclose all the material facts in the form.

As a matter of principle we strongly advise our clients against mixing investment and insurance. The major drawbacks in SIP insure is risk cover stops in case of withdrawal or switch (partial or full). Review of investment performance is always an integral part of financial planning and should be done once in a year. You may have to book partial profit to switch to debt or may have to withdraw your fund for any reason. If risk cover stops in such situations then it has no meaning. That’s why we advise our client to go for online term plan for insurance need and keep investment need separately.

A Will forms a part of your estate planning. People generally get confused and assume Estate planning as Real Estate planning. Not many know that Estate planning entails planning of distribution of all your assets to your family/legal heirs in the event of your death. The assets may include immovable property like your house, property, land or movable assets like your investments (Shares, Mutual Fund units, Bank account), household items, jewellery or any other such assets which you may have.

Why should you to make a Will?

· To ensure that to your loved ones inherit your wealth as per your wish: If you haven’t made a will then, you cannot be sure that all your assets will be distributed to the people as per your wishes ; in case of your death. This problem occurs generally incase of movable personal assets, where you cannot provide for nomination/beneficiary like investments and insurance, which may cause disputes about ownership of these assets which you would never wish to happen. If you wish to bequeath asset to a minor, then you can appoint a guardian for the same.

· If you do not want distribution of your wealth as per the respective Succession Act: If you die without making a will, i.e. you die “in-testate”; then all your assets are distributed to your legal heirs i.e. spouse and children equally as per the provisions of Hindu Succession Act for Hindus and Indian Succession Act for people other than Hindu. as per the Indian Succession Act. However a Will overrides all the nominations, except for nomination in physical shares.

· Succession to your business: If you have a business and you want some one to continue or you wish to wind up the business after your death, then you can mention it in your will. Thus making a will enables, that no third party can or has right to intervene your business after your death. Moreover it ensures that the assets held under the business are handed over to the right person.

When should you make a will?

People generally think that they should make a will after they retire. But, you don’t know how long will you live, hence it is never early or late as such when you decide to prepare a will. Thus, you should make a will after you own any assets whether movable or immovable. Since, will is a revocable document, you can also alter your will as many times as you wish to. You can add new assets in your will and also change the beneficiary anytime. Any adult can make a will so the legal age for making a will is 18 years. So, there is no specific age for making a Will.

How to prepare a will?

A will can be made on a stamp paper or even on a plain paper. It can be written in any language, you wish to write. Please note there is no specific format for making a will. First of all you should prepare a list of assets, that you own. Then you should prepare a list of people (including legal heirs and relatives), whom you wish to bequeath these assets. Once both the lists are ready you should name the persons who will inherit the respective assets. At least two persons must sign the will as witness, in token of acceptance of the fact that the executant has signed it in their presence. Witness has to be an adult; thus a minor cannot be a witness to a will. You need to appoint at least one person as executor of the will, who will execute the will after the death. The executor has the right to distribute the assets to the beneficiaries as per the intention mentioned in the will. It is not necessary to register a will; however, it is always advisable to get it registered. A will can also be notarized.

Just like you do your financial planning for your family’s future and goals, it is equally important to ensure that your assets, even after your death; are inherited by the person whom to wish by creating a will.

So, by now I am sure you have got an idea how easy, useful and important it is to make a will and would be willing to prepare a will at earliest.

You know now that if you have a will to make the will, there is a way to make it.

I believe this justifies the saying “ Where there is a will, there is a way”!

The RBIs recent announcement of repo rate cut of 50 bps has also failed to boost the sentiment of the market. Looking at present economic and political conditions in India, it is for sure that this volatility is likely to remain for some more time into the future. There are both internal and external factors confirming the same trend.
1) Crude oil price is still hovering above $ 100 per barrel which will not ease the inflation pressure.
2) Rupee has again crossed high of 53 against dollar and experts predict that it may touch 55 in coming months.
3) The GDP growth forecast for year 2012-13 is 7.6% but experts feel that it may go below 7%.
4) The situations in USA and European markets may lead to more selling pressures from FIIs.
5) Budgetary deficit is also an area of concern and we have to see how the disinvestment targets are met
6) We have not seen major economic reforms in the UPA II regime. The Government has missed this opportunity while presenting the 2012 budget.
7) The next budget is likely to be populist budget looking at the fact that the general elections are to be held either at the end of 2013 or early 2014.
8 ) Loss of congress in UP and other major states will force them to compromise on economic issues.
9) There is lack of political will and unless we see major reforms volatility is likely to continue.

Than what should average investors do in the current market situation? Before coming to solution one must try to understand equity as an asset class before investing. You cannot expect overnight profit from equity. You must invest as per your asset allocation. Your time horizon for investing in equity should be more than 5 years. You must also review your investment portfolio periodically and rebalance the portfolio. Never try to time the market and “always stay invested is the success mantra” for investing in stock market. If you understand the basics than this volatility in stock market will never affect you. Equity has always out performed against all other asset class in the longer run. One can expect 15% plus return from equity, which the equity has already delivered over long period.

SIP in mutual fund is the best solution for investing in equity for the long term in a volatile market scenario. By investing through SIP you reap the advantage which is known as rupee cost averaging. , This lowers the average cost of your holding. Secondly if you invest through SIP, you do not have to worry about daily volatility of the market and thus do not have to time the market. Since SIP can be done with as small an amount as five hundred rupees you can start with a small saving also and get the advantage of power of compounding.
It is also advisable to get a financial plan made from professionals who is not bundling the same with execution. The financial plan will tell you which of your investment is long term and which is short term. Once you are confident that your investment is for longer period of time, this volatility will not affect your decision to continue your investment and SIPs in equity.

The bank aims to grow its number of branches to 125 in the next three months, and to about 300 over the next three years. Ratnakar Bank also seeks new business opportunities by launching several new products across various verticals. To fulfill this objective and gain a competitive edge, the bank intends to leverage best-in-class banking practices on a new-age technology platform.

Mr. Vishwavir Ahuja, Managing Director and CEO, Ratnakar Bank informed, “ In the transformation of the bank to a vibrant new-age entity, technology will play a critical role. Since we have least legacy we believe that bringing in the latest technology will become one of our key differentiators. We are one of the first few banks that will install the latest version of Finacle from Infosys. This aids our technology strategy and with this we future proof our core banking system.”

Ratnakar Bank’s upgrade from the legacy banking system to a new-age platform will help it effectively overcome the challenges of managing operational change. It will also enable the bank to have a 360 degree view of customer relationships which in turn would improve customer experience and enhance loyalty. This alliance will also facilitate seamless integration between all the banking channels, including online, mobile and branch thus enhancing operational efficiency and lowering transaction costs. Finacle will help the bank enhance its speed to market, in terms of product/service delivery, by supporting its expansion across both urban and rural markets of the country.

Manasije will be working closely with Damien over the next few months to ensure a seamless transition and would assume the position of CEO of Max Bupa thereafter. Manasije will report through the Chairman, Mr. Analjit Singh to the Board of Directors of Max Bupa and work closely with the management of Max India and Bupa Plc Max Bupa operates in a fast growing Indian health insurance industry which has had a compound annual growth rate of 37% over the last five years. In comparison to many other countries, health insurance is under-saturated in India, with current penetration levels below 5%. Health Insurance is thus expected to grow rapidly, and is expected to become an Rs.28,000 crore market by 2015.

Manasije Mishra’s appointment provides a strong signal of Max Bupa’s commitment to the business and desire to accelerate its vision of becoming a high growth player in the health insurance market.

Prior to his appointment with Max Bupa, Manasije Mishra was the Managing Director and CEO of HSBC InvestDirect where he successfully integrated the newly acquired company, IL & FS Investment, with the HSBC Group. He has also served as the Sales and Marketing Director for Canara HSBC OBC Life Insurance Company; Head of Strategy & Business Development and Global Head of Non Resident Indian Services for HSBC. He joined the HSBC Group in 1989 and has extensive domestic and international experience in Retail Banking, Operations, E-commerce, Trade Finance, Treasury and Financial Control. He was also a trainer at HSBC’s management training centre in the UK.

“Serving international diasporas including overseas Indians is an important reason Western Union’s network has expanded rapidly around the world,” Kiran Shetty, Regional Vice President and Managing Director, India, said: “We are grateful to our 11 million Indian customers and their families for their trust and custom over the past decade.”

The company’s 100,000th location in India is Dena Bank’s Sandhurst Bridge Bank branch in Mumbai, India.

“We are delighted to offer Western Union services to our customers and moreover; honored that the inclusion of our branch has helped to top this momentous milestone for Western Union, said Smt. Nupur Mitra, Chairman & Managing Director, Dena Bank.

Western Union services are offered through Dena Bank via Weizmann Forex, the company’s Principal Agent.

Western Union is currently expanding its portfolio of financial services. The network spans more than 200 countries and territories, and is a centerpiece of Western Union’s strategy to provide mainstream financial services – cash, card or digitally-based – to underserved consumers and businesses globally.

The credit policy can definitely mean lower EMIs for existing home loan consumers but may not be in the way that they think.  Contrary to popular opinion a decrease in Repo rates does not automatically translate into decrease in loan rates. Off course the consumers can be forgiven for forming this erroneous opinion that home loan interest rates are automatically linked to Repo rates because in the past 3 years the interest rates have mostly always gone up in line with increases in Repo rate by RBI. So obviously they have a legitimate expectation that the interest rates will decrease now that RBI has bought down the Repo rate.

But this expectation may not be fulfilled. We may see banks announce some token interest rates cuts on loans but the cuts are likely to come from decreasing spreads over the Base rate rather than a drop in Base rates themselves. In plain English it means that only new home loan consumers are likely to benefit from this decrease rather than the old consumers.

There is another provision in the policy however that is likely to benefit existing home loan consumers if they are willing to be a little pro-active. After waiting for the banks to adopt the policy voluntarily (banks like Axis, ICICI and SBI did do so) RBI has, at last, decided to issue mandatory guidelines abolishing pre-payment charges on all floating rate home loans.  Readers will be aware that National Housing Bank (NHB) had already taken this step quite some time back and so as far as floating rate home loans are concerned pre-payment charges are now history whether the lender is a Housing finance company (HDFC, LIC Housing Finance, etc. ) or a bank (Axis, Citibank, ICICI, HSBC SBI, Standard Chartered, etc. ). Most existing floating rate customers are paying anywhere between 11.50% to 15% interest rates on their home loans versus the 10.50%-10.75% being charged to new consumers by the same lenders. If you request them they will drop the interest rates for you too. But don’t expect them to drop interest rates without your asking for the reduction. So get rid of your inertia and demand the lower interest rates from your existing lender and if they don’t give it just shift your loan. You don’t need to do any fancy calculations. With pre-payment charges gone and processing fees being nominal it will make sense if you are paying anywhere more than 10.75%.

The other fall out of the credit policy is that we are likely to see an attempt to drop deposit rates. The scope for cutting deposit rates is rather limited given the lower than  expected growth rates in bank deposits and the fact that the interest rates on small savings instruments such as Time and recurring deposits from Post offices as well NSC and senior citizen saving schemes as well as PPF have been fixed at a fairly high rate for this financial year. If sufficient deposits do come in at the reduced rates we might get to see a reduction in Base rates as well. But the process is not a quick one and will take some time. If inflation is not controlled the decrease in Base rates may not take place in the near future.

I hope I am proven wrong but meanwhile brace yourself for a rough ride and ensure that you are not paying anything more than you need to.