Jeevan Saral

Jeevan Saral Plan 165 and Jeevan Saral Plan 185

Plan Details:

This plan is appropriate for employees seeking life cover through Salary Savings Schemes. This is an Endowment Assurance plan where the proposer has simply to choose the amount and mode of premium payment. The plan provides financial protection against death throughout the term of the plan. The death benefit is directly related to the premiums paid. The Maturity Sum Assured depends on the age at entry of the life to be assured and is payable on survival to the end of the policy term. It also offers the flexibility of term and a lot of liquidity.

Eligibility:

Minimum Age: 12 Yrs (completed) Maximum Age: 60 Nearest Birthday Term: Minimum 10, Maximum:35 Age at maturity: Maximum 70 years

Premium:

Minimum premium: Rs 250 per month for entry age upto 49 years and Rs.400 per month for entry age 50 years and above. The premium shall be in multiple of Rs.50 per month.
Premium Mode:Yearly, Half yearly, Quarterly and Monthly under Salary SavingScheme.

Survival Benefits: The sum payable at maturity however differs for different entry ages and terms. On Maturity the individual will receive maturity sum assured, plus Loyalty additions, if any.

Death Benefit: 250 times the monthly premium together with loyalty additions, if any, and return of premiums excluding first year premiums and extra/rider premium, if any, is payable in lump sum on death of the life assured during the term of the policy.

Maturity Benefit: The Maturity Sum Assured plus Loyalty additions, if any, is payable in a lump sum. Accidental Death and Disability Benefit

Supplementary/Extra Benefits: These are the optional benefits that can be added to your basic plan for extra protection/option. An additional premium is required to be paid for these benefits.

Surrender Value: Buying a life insurance contract is a long-term commitment. However, surrender values are available on earlier termination of the contract. The surrender value will be the greater of the guaranteed surrender value and special surrender. The plan also allows for partial surrenders.

Guaranteed Surrender Value: The policy can be surrendered after it has been in force for at least 3 full years. The Guaranteed Surrender value will be equal to 30% of the total amount of premiums paid excluding the premiums for the first year and all the extra premiums and premiums for accident benefit / term rider.

Salary Trend in India, How much you can expect!

Indian IT professional’s salary increase one of the highest in world

According to recently released 2007 salary survey, typical Indian software professional got an average salary increase of 18.7% in 2007, an improvement over 18.3% increase recorded in the previous year.
This is revealed by a nation-wide survey carried out by IDC India for CyberMedia group’s flagship publication, covering 2,806 IT professionals. This number is one of the highest in the world. Compare this to roughly 2.7% to 3.3% average salary increase in US.

Employee Break-up by Salary and Experience

The average annual salary drops from Rs 5.7 lakh to Rs 5.4 lakh, despite the average hike touching 19.8%, with aggressive hiring of freshers at basic salary levels
(Dataquest survey)

Difference between Gross Salary and Net Salary

Gross Salary is inclusive of all the remuneration payable to an employee.
while Net salary is only the take-home salary. i.e, Gross salary earned minus the deductions towards ESI, EPF, PT, Insurance etc..

Cost To the Company (CTC): all the expenses to calculate the CTC of an employee i.e.

1. All the components of the salary.
2. All the perks that are being given for the candidate (i.e) - bonus, incentives, reimbursement of medical/telephone/petrol, benefits extended thro' various schemes like housing/vehicle/furniture/ A/C/ etc....
3. All the contributions that the company makes for the employees like PF,SUPER ANNUATION, GRATUITY,MEDICAL INSURANCE, ETC. should also be included in calculating the CTC of an employee.


Take Home Salary
Take a simple example of take-home salary calculation. For this, from the gross package one has to deduct professional tax, income tax, mediclaim premium, investment in tax saving instruments and provident fund contribution from the total salary
As you can see when Total salary increases Percantage of Actual or Take home salary goes down.

So take care when you discuss your CTC with HR.


Latest salary package for freshers in MNC...

Figure in Lacs/Annum

Accenture------------------------2.1
Adobe----------------------------5.7
Amazon--------------------------5
Attrenta--------------------------8
Caritor ---------------------------2
CISCO----------------------------4
Computer Associates------------4.5
CTS-------------------------------2.1
DE Shaw--------------------------6
Deloitte---------------------------7
Fiorano ---------------------------5
Flextronics (HSS) ---------------3
Google ---------------------------12
GE --------------------------------3
HCL ------------------------------2
Hexaware -----------------------2.1
IBM ------------------------------5
Impulsesoft ---------------------4.5
Interra Systems ----------------4.6
Induslogic -----------------------4.2
Infosys Systems ----------------1.8
Kanbay --------------------------3.25
Kritical ---------------------------5.6
MBT ------------------------------2.5
Microsoft ------------------------7.8
Mindtree ------------------------3
Motorola ------------------------3.6
Nvidia---------------------------2.1
Oracle ---------------------------4.2
Patni(PCS) ----------------------1.7
Perot ----------------------------2.5
Polaris ---------------------------2
SAP Labs ------------------------4
Samsung ------------------------4.6
Satyam --------------------------2.25
STM -----------------------------4.5
Sun Microsystems --------------5.0
Syntel ---------------------------2.05
Tata Elxsi -----------------------1.9
Tavant --------------------------3.6
TCS -----------------------------1.8
T-Mobile ------------------------8.0
Trilogy --------------------------7.5
Verizon -------------------------3
Virtusa --------------------------2.4
Wipro ---------------------------2.1

This is not a conclusive / affirmative data. This is just provided for reading purpose., no claims, guarantees on the accuracy of the above data is given.

Should I Buy Real Estate or wait?

"Is now a good time to buy real estate?"

The short answer is, "it depends." People are either optimistic or pessimistic about their personal financial life and they are the same way about more macro economic topics like housing and jobs. Each month, surveys are conducted to measure Consumer sentiments to try and get a reading on the likelihood people will purchase in the near future.The topic of real estate is a pretty split camp. There are rational and compelling reasons to be optimistic or pessimistic about housing and it doesn't really matter what part of the country you live in.

Reasons to be pessimistic about real estate

1. House prices are falling in parts of the country. Why buy in a declining market?
2. Cost of ownership on a monthly basis is higher than renting.
3. Taxes and home owners insurance are too high.
4. Prices of homes are too high.
5. Houses take time to sell. With less people being able to buy, it will take even longer.
6. When I will be back in India (Duration in USA)

Reasons to be optimistic about real estate

1. Real estate is a relatively safe investment over the long run.
2. Prices continue to appreciate in 2/3rds of major metro areas.
3. Interest rates are at near historic lows.
4. Buy now while mortgages are still relatively easy to get.
5. Everybody needs a place to live. Why not own it and get the tax break associated with ownership?

The one thing has changed about real estate over the past nine months is Nobody would recommend buying a home without financial reserves. In the recent past, house prices were shooting up so quickly, it was impossible to save enough money fast enough to even out. During this time, getting into a house at any cost was a smart move. Everybody don't believe that same philosophy still holds true.

Experts think 20% appreciation will continue to hold up. It is no longer smart to pay anything to get into a house and it is no longer smart to purchase homes with no financial reserves.If the "credit crunch" we're seeing now turns out to be more than a passing trend, it can have a major impact on the entire economy. It all goes back to whether you're an optimist or a pessimist. Expert believe this will be a lasting trend. Financial markets are resilient and innovative and predict the mortgage of choice for most Americans will soon be FHA. Yes, this subprime backlash will soon be remedied by the most classic of saves, the government bailout.

News said that Washington DC is being strongly lobbied to raise FHA loan limits to match conforming. This means that except in the highest priced States and neighborhoods, FHA loans will be just as competitive and available as any other option. With mortgage insurance and the backing of the US government, there won't be a bank that will be afraid to make this loan and there won't be an investor who won't buy it.

To answer the original question, "Should I buy real estate now?", so It depends on if you have reserves. If you're an optimist, You should have six months of reserves in cash, CDs or savings that will pay all your mortgage and other monthly obligations if you lose your job, or have to make a major repair to the home. Reserves also allow a seller to hold out a maximize their sales price in a less demanding market.

Economic pessimists shouldn't buy unless they have a year of reserves for the same reasons. For everyone else who would someday like to own a home, now is the time to start saving and reducing your debt. With home prices stabilizing, for now the best action you can take is to save money.

Basics of Mutual Fund

A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal
A mutual fund is a professionally-managed form of collective investments that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities. In a mutual fund, the fund manager, who is also known as the portfolio manager, trades the fund's underlying securities, realizing capital gains or losses, and collects the dividend or interest income.
The investment proceeds are then passed along to the individual investors. The value of a share of the mutual fund, known as the net asset value per share (NAV), is calculated daily based on the total value of the fund divided by the number of shares currently issued and outstanding.

You could make money from a mutual fund in three ways:

1) Income is earned from dividends declared by mutual fund schemes from time to time.
2) If the fund sells securities that have increased in price, the fund has a capital gain. This is reflected in the price of each unit. When investors sell these units at prices higher than their purchase price, they stand to make a gain.
3) If fund holdings increase in price but are not sold by the fund manager, the fund's unit price increases. You can then sell your mutual fund units for a profit. This is tantamount to a valuation gain.


What are the different types of Mutual Funds?

Mutual fund schemes may be classified on the basis of their structure and their investment objective

A. By Structure

1. Open-ended Funds
An Open-ended Fund is one that is available for subscription all through the year. These do not have a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value (NAV) related prices.

2. Close-ended Funds
A Close-ended Fund has a stipulated maturity period, which generally ranges from 3 to 15 years. The fund is open for subscription only during a specified period. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the Stock Exchanges.


B. By Investment Objective

1. Growth Funds
The aim of growth funds is to provide capital appreciation over the medium to long term. Such schemes normally invest a majority of their corpus in equities. Growth schemes are ideal for investors who have a long-term outlook and are seeking growth over a period of time.

2. Income Funds
The aim of Income Funds is to provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds, corporate debentures and Government securities.
Income Funds are ideal for capital stability and regular income. Capital appreciation in such funds may be limited, though risks are typically lower than that in a growth fund.

3. Balanced Funds
The aim of Balanced Funds is to provide both growth and regular income. Such schemes periodically distribute a part of their earning and invest both in equities and fixed income securities in the proportion indicated in their offer documents.
This proportion affects the risks and the returns associated with the balanced fund - in case equities are allocated a higher proportion, investors would be exposed to risks similar to that of the equity market.
Balanced funds with equal allocation to equities and fixed income securities are ideal for investors looking for a combination of income and moderate growth.

4. Money Market Funds
The aim of Money Market Funds is to provide easy liquidity, preservation of capital and moderate income. These schemes generally invest in safer short-term instruments such as Treasury Bills, Certificates of Deposit, Commercial Paper and Inter-Bank Call Money. Returns on these schemes may fluctuate depending upon the interest rates prevailing in the market.
These are ideal for corporate and individual investors as a means to park their surplus funds for short periods.

C. Other Equity Related Schemes

1. Tax Saving Schemes
These schemes offer tax rebates to the investors under specific provisions of the Indian Income Tax laws. (ELSS) and Pension Schemes

2. Index Schemes
Index Funds attempt to replicate the performance of a particular index such as the BSE Sensex or the NSE S&P CNX 50.

3. Sectoral Schemes
Sectoral Funds are those which invest exclusively in specified sector(s) such as FMCG, Information Technology, Pharmaceuticals, etc. These schemes carry higher risk and restricted to specific sector.


What are the benefits of investing in a mutual fund?

The benefits of investing in mutual funds are as follows -

1. Access to professional money managers - Experienced fund managers using advanced quantitative and mathematical techniques manage your money.

2. Diversification - Mutual funds aim to reduce the volatility of returns through diversification by investing in a number of companies across a broad section of industries and sectors. It prevents an investor from putting "all eggs in one basket". This inherently minimizes risk

3. Liquidity - Open-ended mutual funds are priced daily and are always willing to buy back units from investors. This mean that investors can sell their holdings in mutual fund investments anytime without worrying about finding a buyer at the right price.

4. Tax Efficiency - Mutual fund offers a variety of tax benefits. Please visit the tax corner section or consult your tax advisor for details.

5. Low transaction costs - Since mutual funds are a pool of money of many investors, the amount of investment made in securities is large. This therefore results in paying lower brokerage due to economies of scale.

6. Transparency - Prices of open ended mutual funds are declared daily. Regular updates on the value of your investment are available. The portfolio is also disclosed regularly with the fund manager's investment strategy and outlook.

7. Well-regulated industry - All the mutual funds are registered with SEBI and they function under strict regulations designed to protect the interests of investors.

8. Convenience of small investments - A mutual fund on the other hand allows even individual investors to hold a diversified array of securities due to the fact that it invests in a portfolio of stocks. A mutual fund therefore permits risk diversification without an investor having to invest large amounts of money.


What are the different plans that mutual funds offer?

Mutual Funds offer various investment options. Some of the important investment options include:

1. Systematic Investment Plan (SIP)
The investor is given the option of preparing a pre-determined number of post-dated cheques in favor of the fund. The investor is allotted units on a predetermined date specified in the offer document at the applicable NAV.

2. Systematic Encashment Plan (SEP)
As opposed to the Systematic Investment Plan, the Systematic Encashment Plan allows the investor the facility to withdraw a pre-determined amount / units from his fund at a pre-determined interval. The investor's units will be redeemed at the applicable NAV as on that day.

3. Growth Option
Dividend is not paid-out under a Growth Option and the investor realizes only the capital appreciation on the investment (by an increase in NAV).

4. Dividend Payout Option
Dividends are paid-out to investors under the Dividend Payout Option. However, the NAV of the mutual fund scheme falls to the extent of the dividend payout.


What are the types of risks?

For mutual fund investments, risks would include variability, or period-by-period fluctuations in total return. The value of the scheme's investments may be affected by factors affecting capital markets such as price and volume volatility in the stock markets, interest rates, currency exchange rates, foreign investment, changes in government policy, political, economic or other developments.

1. Market Risk: At times the prices or yields of all the securities in a particular market rise or fall due to broad outside influences. When this happens, the stock prices of both an outstanding, highly profitable company and a fledgling corporation may be affected. This change in price is due to "market risk".

2. Inflation Risk: Sometimes referred to as "loss of purchasing power." Whenever the rate of inflation exceeds the earnings on your investment, you run the risk that you'll actually be able to buy less, not more.

3. Credit Risk: In short, how stable is the company or entity to which you lend your money when you invest? How certain are you that it will be able to pay the interest you are promised, or repay your principal when the investment matures?

4. Interest Rate Risk: Changing interest rates affect both equities and bonds in many ways. Bond prices are influenced by movements in the interest rates in the financial system. Generally, when interest rates rise, prices of the securities fall and when interest rates drop, the prices increase

5. Investment Risks: In the sectoral fund schemes, investments will be predominantly in equities of select companies in the particular sectors. Accordingly, the NAV of the schemes are linked to the equity performance of such companies and may be more volatile than a more diversified portfolio of equities.

6. Liquidity Risk: Thinly traded securities carry the danger of not being easily saleable at or near their real values. The fund manager may therefore be unable to quickly sell an illiquid bond and this might affect the price of the fund unfavorably. Liquidity risk is characteristic of the Indian fixed income market.

7. Changes in the Government Policy: Changes in Government policy especially in regard to the tax benefits may impact the business prospects of the companies leading to an impact on the investments made by the fund.

ULIPS are a long term Investment

I have recently come across agents selling ULIP's as three year plans. You might hear them ask you to invest for just three years and then reap the benefits.
All this in my opinion is miselling. Investing in ULIP's work only if your investment horizon is more than 10 years.

Below is an illustration of returns from HDFC Unit Linked Endowment Plus based on term of the plan.
These illustrations are for a 34 year male. Assuming returns of 10% per annum the following is what the figures look like.

Term : 3 years
Premium : Rs.25,000 per annum
Sum assured : Rs.1,25,000
Total premium paid : Rs.75,000
Fund balance at the end of 3 years : Rs.68,976
Net return on investments : Loss of Rs.6,024 on principal

Term : 10 years
Premium : Rs.25,000 per annum
Sum assured : Rs. 1,25,000
Total premium paid : Rs.2,50,000
Fund balance at the end of 10 years : Rs.3,17,657
Net return on investments : 7.17%

Term : 15 years
Premium : Rs.25,000 per annum
Sum assured : Rs. 1,87,500
Total premium paid : Rs.3,75,000
Fund balance at the end of 15 years : Rs.7,37,790
Net return on investments : 8.07%

Term : 20 years
Premium : Rs.25,000 per annum
Sum assured : Rs. 2,50,000
Total premium paid : Rs.5,00,000
Fund balance at the end of 20 years : Rs.13,01,447
Net return on investments : 8.43%

Term : 25 years
Premium : Rs.25,000 per annum
Sum assured : Rs. 3,12,500
Total premium paid : Rs.6,25,000
Fund balance at the end of 25 years : Rs.13,01,447
Net return on investments : 8.62%

Clearly, if you look at the net returns, investment in ULIPs only work if you plan to stay invested for long term. If someone is selling you a ULIP for a time frame of 3 to 5 years, it will not work. All he is doing is mis-selling

Investment returns for government issued bonds is also around 8%. After investing for 20-25 years we get around 8.5% interest rate.


Tips

• Do not exit before the Ulip matures.
• If you need to withdraw, do it partially, and only if there's an emergency.
• Take 100 per cent equity exposure when the maturity is over five years away.
• Review you life cover needs and increase the cover, if required.
• Use top-up facility to deploy surplus funds.

What should you do in case of a road accident?

If there is an accident causing injury or damage to any person, animal, vehicle or property, the driver of that vehicle should render all possible help to the injured.

He should also report the matter to the nearest police station, within 24 hours of the occurrence of such accident. According to the provisions of Section 134 of the Motor Vehicles' Act, the driver/owner of the vehicle involved in an accident is responsible to convey the injured to the nearest hospital or clinic. The doctor so approached shall be duty bound to render necessary medical aid or treatment without waiting for any procedural formalities.

Here are some Do's and Don'ts, in the event of an accident

Do's

• Keep calm
• Switch off the car engine
• Apply parking brakes
• Switch on hazard warning lights
• Cordon off the area of accident
• Help the injured
• Take down the names and addresses of the witnesses and registration numbers of the vehicles involved
• Report the matter to the police and
• Take down the name and the number of the policeman who arrives at the scene

Don'ts

• Do not panic
• Do not argue with any one and
• Do not handle the injured unless it is necessary as a life saving measure