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

How to Avoid Insurance Claim Rejection of Your Car

These days denial of insurance claim on motor vehicles is getting increasingly common. They constitute to the majority of consumer cases in consumer forums and courts. Here we are covering the important points you should keep in mind while purchasing insurance for your vehicle and while you make a claim.

Provide authentic documents.
While purchasing insurance most of the customers negotiate for discounts which results in agent or executive suggesting unfair means to get the same. One such common method in vehicle insurance is a fake No Claim Bonus (NCB) certificate while purchasing a new insurance policy. The insurance agent believes it and gives you a 20% discount.
But if unfortunate events happen and you put a claim on your new insurer he does all the checks including your NCB claim on the previous policy. And this is where they would find a reason to reject. Remember, Insurance companies usually do not do these checks while selling you the insurance (which they should ideally do) and trust you for all that you say but they check every single document when it comes to passing a claim. Looking from economic perspective this makes sense too! So if we give wrong information or fake document to purchase a policy then we are actually buying a piece of paper of no value.

Do not lie to claim investigation officer.
This is most important; tell the exact incidence, even if you think that a slight modification would save you lots of questions or money. Remember claim officers inspect 10 – 15 cases a day and are well experienced to identify the truth. On finding things fishy they may submit a negative report.

Purchase commercial insurance
If your vehicle is used commercially. Its only slightly expensive (about 8 – 10%) but in the unfortunate condition will get you the claim. And people who use popularly commercial vehicles like Indica DLE, Tavera, Qualis, TATA Sumoetc. need to patient for getting claims as more than usual investigations are done for such vehicles under private motor vehicle insurance.

File your claim and keep communicating
File your claim and keep communicating with your insurer while they process it in order to assist them if something is missing or incomplete and henceforth avoiding any rejection. Also it is advisable to maintain a photocopy of all the documents or written communication that you do.

How to dispute an Incorrect Charge?

Online Shopping, Chargeback Rights & How to Dispute a charge?

What if goods or services I ordered are delivered defective, old or not delivered at all?

Well for those who do not know MasterCard and Visa have chargeback policies in place to prevent such frauds over internet which are applicable in India in similar fashion as they are applicable in developed nations.
If the merchant doesn’t provide you with the goods and services promised within specified time here is what you need to do.

1. Send e-mail or letter to merchant describing the order you placed and problems that you are facing with that and ask him to resolve it within specified time.
2. Keep a copy of the communication that you do.
3. If merchant does not resolve the problem and provide you with what was promised then ask him to refund your money.
4. If merchant refuses to return the money or does not respond to your communication at all. Contact your credit card company and tell them you would like to dispute a charge on your account.
5. Give your information to the credit card company over the phone. Some companies will send you a form to complete, sign and return. These forms often require an explanation of the situation, as well as copies of any receipts. Charge dispute forms are also available on websites of many companies. You can fill that form and send it to the address mentioned directly via registered post or courier. We have included dispute a charge form of ICICI Bank, HDFC Bank and HSBC Bank here.
6. Wait to hear the resolution. Your credit card company is obligated to respond to you within 30 days of receiving your completed form.


Chargeback is not limited to online shopping.
When you get your card statement you should examine it thoroughly to identify any incorrect charges. There could be multiple reasons of incorrect charges. Few are listed below.

1. Neither incurred nor authorised the above transactions
2. Charged twice or thrice for the same transaction
3. The transaction amount incurred different from amount charged.
4. Hotel reservation was cancelled on time but you have been billed a No-Show Charge.
5. Already paid the transaction amount by other means and the evidence is available.
6. ATM Transaction attempted did not dispense or partially dispensed cash (copy of ATM slip attached).
7. Never received the ordered merchandise.
8. Cancelled the transaction(s)/returned the goods, but did not receive credit/refund for the same.
9. Received defective merchandise/goods and had returned the goods to the merchant which he accepted.
10. Cancelled Membership/Subscription/Booking but still being charged.


In all the disputes cited above you would be required to provide supporting document.
It is advisable that you keep transaction related documents like charge slips credit notes, bill or e-bill etc till you are satisfied with the goods and see the correct charges appearing in the statement.
When you file a dispute the charge would be reversed by the bank immediately on receipt of the complaint. You typically get 60 days from statement to file such a complaint. The issuing bank then pursues the matter with the merchant and based on the final decision you get a complete waiver of the charges or are asked to pay the reversed amount in a specified time.
Do not give up if your dispute gets denied. Determine if there is additional information you can provide. Ask your credit card company about your options.

For More inofrmation on Credicard policy visit RBI
http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=2627&Mode=0

For filing complaint against credit card company, click on below link
http://www.rbi.org.in/scripts/helpdesk.aspx



"Every credit card (CC) holder should be aware of CHARGE BACK;
the only protection for customers.

What is 'charge back' and how does it work?
If a customer is unhappy with a purchase thru CC, s/he can demand for 'charge back' so that banks will reverse the amount billed on CC. That is, bank will cancel that purchase & will not pay the amount to merchant. Net result is customer need not pay for that faulty product or unsatisfactory purchase. The charge back can be claimed within 180 days of the purchase date."

Post Office Savings Schemes

This section of InvestInn offers information about various savings and investments plans available to residents of India via. Indian Post offices. These schemes are popular among each and every section of society as they offers higher returns without any risk loss. i.e. Guaranteed returns.

Current Small Savings Schemes With Main Features

1. Post Office Time Deposits
2. Post Office Recurring Deposits
3. Post Office Monthly Income Scheme [Post Office MIS]
4. National Savings Certificates [NSC]
5. Kisan Vikas Patra - [KVP]
6. Public Provident Funds [PPF]
7. Deposit Scheme for Retiring Government Employees.
8. Deposit Scheme for Retiring Employees of Public Sector Companies.
9. Postal Life Insurance

1. Post Office Time Deposits

Post office Time deposit scheme is a type of fixed deposit account offered by Department of post, Government of India at all post office. This saving plan is best for those investors who want to deposit a lump sum for a fixed period. Investor gets a lump sum (principal + interest) at the maturity of the deposit, where rate of interest on investment depend on the term of deposit.

Who can open

• A single adult or two adults jointly,
• A pensioner to receive/credit his monthly pension,
• Group Accounts by Provident Fund,
• Superannuation Fund or Gratuity Fund, Authority controlling funds of the Sanchayika. Public Account by a local authority/body,
• Institutional Accounts by the Treasurer of Charitable Endowments for India, Trust Regimental Fund & Welfare Fund,
• A cooperative society / cooperative bank or scheduled bank on behalf of its members, clients or employees
• Gazetted Officer in his official capacity.
  [ Non Resident Indian / HUF can not open the account. ]
  

Nomination facility
Nomination facility is available under Post office Time Deposit scheme.

Amount Required
Minimum amount required: Rs.200/-. Maximum Amount : No Limit

Time / term of investment
Time Deposits can be made for the periods of 1 year, 2 years, 3 years and 5 years.

Interest Rates

Period of deposit--- Rate of Interest per cent/ per annum
1 YEAR ----------------6.25
2 YEARS ---------------6.50
3 YEARS ---------------7.25
5 YEARS ---------------7.50

2. Post Office Recurring Deposit Accounts

Who can open :

• A single adult or two adults jointly,
• A guardian on behalf of a minor or a person of unsound mind; or
• A minor who has attained the age of ten year, in his own name.
  

Where can be opened :
At any post office.

Maturity
Period of maturity of an account is five years.

Deposits
Sixty equal monthly deposits shall be made in an account in multiples of Rs. five subject to a minimum of ten rupees.

Defaults in deposits

• Accounts with not more than four defaults in deposits can be regularized within a period of two months on payment of a default fee.
• Account becomes discontinued after more than four defaults.
  

Interest & Repayment on maturity

• On maturity of the accounts opened on or after 1st March, 2003, an amount (inclusive of interest) of Rs. 728.90 is payable to a subscriber of Rupees: Ten denomination account.
• Amount repayable, inclusive of interest, on an account of any other denomination shall be proportionate to the amount specified above.
  

Pass Book
Depositor is provided with a pass book with entries of the deposited amount and other particulars duly stamped by the post Office.

Premature closure
Premature closure of accounts is permissible after expiry of three years provided that interest at the rate applicable to post office savings account shall be payable on such premature closure of account.

Continuation after maturity
Permissible for a maximum period of five years.

3. Monthly Income Scheme [Post Office MIS]

Who can open
A single adult or 2-3 adults jointly.
More than one account can be opened subject to maximum deposit limits.

Where can be opened
At any post office.

Maturity
Period of maturity of an account is six years.

Deposits
Only one deposit shall be made in an account.

Deposit limits
Minimum: rupees one thousand.
Maximum: rupees three lakhs in case of single and rupees six lakhs in case of joint account. Deposits in all accounts taken together shall not exceed Rs. three lakhs in single account and Rs. six lakhs in joint account. The depositor’s shares in the balances of joint accounts shall be taken as one half or one third of such balance according as the account is held by 2 or 3 adults.

Interest

• Interest @ 8 per cent/ per annum, payable monthly in respect of the accounts opened on or after the 1st March, 2003.
• In addition, bonus equal to ten per cent of the deposited amount is payable at the time of repayment on maturity.

Pass Book
Depositor is provided with a pass book with entries of the deposited amount and other particulars duly stamped by the post Office.

Premature cloasure
Premature closure facility is available after one year subject to condition.

Closure of account
Account shall be closed after expiry of 6 years, bonus equal to ten per cent of deposits shall be paid alongwith principle amount.

Income Tax relief
Income tax relief is available on the interest earned as per limits fixed vide section 80L of Income Tax, as amended from time to time.

4. National Savings Certificates [NSC]

Who can purchase

• An adult in his own name or on behalf of a minor,
• A minor,
• A trust,
• Two adults jointly,
• Hindu Undivided Family.
  

Where available
Available for purchase/issue at Post Offices.

Maturity
Period of maturity of a certificate is six Years.

Nomination / Transferability

• Nomination facility is available.
• Certificates can be transferred from one post office to any other post office.
• Transfer from one person to another person permissible in certain conditions.
  

Denomination / Deposit limits

• Certificates are available in denominations (face value) of Rs. 100, Rs. 500, Rs. 1000, Rs. 5000 & Rs. 10,000.
• There is no maximum limit for purchase of the certificates.
  

Interest/maturity value

• With effect from 1st March, 2003, Maturity value a certificate of Rs. 100 denomination is Rs. 160.10.
• Maturity value of a certificate of any other denomination shall be at proportionate rate.
• Interest accrued on the certificates every year is liable to income tax but deemed to have been reinvested.
  

Premature encashment
Premature encashment of the certificate is not permissible except at a discount in the case of death of the holder(s), forfeiture by a pledgee and when ordered by a court of law.

Place of Encashment/discharge on maturity
Can be encashed/discharged at the post office where it is registered or any other post office.

Income Tax relief

• Income Tax rebate is available on the amount invested and interest accruing every year under Section 88 of Income tax Act, as amended from time to time.
• Income tax relief is also available on the interest earned as per limits fixed vide section 80L of Income Tax, as amended from time to time.

5. Kisan Vikas Patra [KVP]

Kisan Vikas Patras (KVPs) are available at all Head Post Offices and authorized post offices throughout India. The KVPs are measured as the most safe investment tool, as it has the backing of the Government of India. The principal is assured (guaranteed) and it is deemed to be a safe avenue for investing your money. KVP is suitable for an increase in investment as it accumulates money at a fixed rate, and money doubles at the end of the specified period. It is for those looking for guaranteed returns.

Who can purchase

• An adult in his own name or on behalf of a minor,
• A minor,
• A Trust,
• Two adults jointly.

Where available
Available for purchase/issue at Post Offices.

Maturity amount / period
With effect from 1st March, 2003, invested amount doubles on maturity after Eight Years and Seven months.

Nomination
Nomination facility is available.

Denomination / Deposit limits

• Certificates are available in denominations (face value) of Rs. 100, Rs. 500, Rs. 1000, Rs. 5000, Rs. 10,000 & Rs. 50,000.
• There is no maximum limit for purchase of the certificates.
  

Tax Benefits
No income tax benefit is available under the scheme. However the deposits are exempt from Tax Deduction at Source (TDS) at the time of withdrawal.

Premature encashment
Premature encashment of the certificate is not permissible except at a discount in the case of death of the holder(s), forfeiture by a pledgee and when ordered by a court of law.

Place of Encashment/discharge on maturity
Can be encashed/discharged at the post office where it is registered or any other post office.

6. Public Provident Funds [PPF]

Who can open account under the scheme
An individual :

• in his own name,
• on behalf of a minor of whom he is a guardian,
• a Hindu Undivided Family.

Where to open an account

• at designated post offices throughout the country and
• at designated branches of Public Sector Banks throughout the country.
  

Maturity period

• The account matures for closure after 15 years.
• Account can be continued with or without subscriptions after maturity for block periods of five years.

Nomination
Nomination facility is available.

Deposit limits

• Minimum deposit required is Rs. 500 in a financial year.
• Maximum deposit limit is Rs. 70,000 in a financial year.
• Maximum number of deposits is twelve in a financial year.
  

Loans
Loans from the amount at credit in PPF account can be taken after completion of one year from the end of the financial year of opening of the account and before completion of the 5th year. The amount of withdrawal cannot exceed 40% of the amount that stood to credit at the end of fourth year preceding the year of withdrawal or at the end of preceding year whichever is lower.

Withdrawal
Premature withdrawal is permissible every year after completion of 5 years from the end of the year of opening the account.

Transferability

• Account can be transferred from one post office to another post office,
  from a bank to another bank; and
• from a bank to post office and vice-versa.
  

Pass Book
Depositor is provided with a pass book with entries of the deposited amounts, interest credited every year and other particulars duly stamped by the post Office.

Interest
· Interest at the rate, notified by the Central Government from time to time, is calculated and credited to the accounts at the end of each financial year. · Present rate of interest is eight per cent / per year since: 1st March, 2003.

Income Tax relief

• Income Tax rebate is available ‘on the deposits made’, under Section 88 of Income tax Act, as amended from time to time.
• Interest credited every year is tax-free.

Komal Jeevan

'KOMAL JEEVAN' introduced w.e.f. 14th November, 2002. This is a money back plan with guaranteed addition and payment of premiums ceases on the policy anniversary immediately after the child attains 18 years of age.

The Komal Jeevan plan is specially made for the children between age of 0 to 10 years. This paln guarantees a return @ 7.5 % p.a on Sum Assured. Premium payments are limited upto the 18 years of the child. Special Benefits can be added to the policy to ensure FINANCIAL SECURITY of your child even in your absence

This policy is suitable for parents who wants to secure money for there children’s higher education. It can be availed by parents having children aged between 0 to 10 years.

Features

• Parents can propose the child's life.


• Risk under this plan will commence either after 2 years from the date of commencement of the policy or from the policy anniversary immediately following the completion of 7 years of age by the child, whichever is later. No medical examination of the life to be assured would be required under this plan.


• Premiums are payable upto a term equal to 18 minus the age of the child at entry.


• In most cases, Father would be the proposer. But, if Mother has an income of her own, can also propose the policy. If both parents are not alive legal guardian can propose.


• Policy can be gifted by grand parents, elder sisters or brothers and uncles both from paternal or maternal side, by taking a single premium policy for love and affection. In such cases also, the policies will be proposed by father, mother or legal guardian.
  

Benefits

1. Installment Benefits:

The Sum assured under this plan will be paid installments at periodic intervals provided the policy is in force for full sum assured as under:

1. 20% on policy anniversary after completing age 18
2. 20% on policy anniversary after completing age 20
3. 30% on policy anniversary after completing age 22
4. 30% on policy anniversary after completing age 24

2. Guaranteed additions:

Payable along with sum assured either on death within the term or on policy anniversary after attaining age 26 years. The policy has to be kept in full force at Rs.75 per thousand for each policy year to receive this benefit.

3.Death Benefit:

1.In case of death of life assured before the commencement of risk, the policy is cancelled and premiums paid are refunded.
2.After the commencement of risk, if the life assured dies before policy matures, full sum assured plus guaranteed additions are payable without deduction of earlier installment benefits paid.

4.Loyalty Additions:

Special benefit on maturity - Loyalty Additions depending on policy duration and sum assured are paid on maturity.

5.Premium Waiver Benefit:

Premium Waiver Benefit available with some extra premium amount.

6.Term Rider Benefit:

Term Rider Benefit can be availed by the proposer to the extent of 20% of the basic sum assured under the policy not exceeding Rs.1,00,000/-. The benefit will be payable in case the proposer dies before the policy anniversary on which the child is 18 years last birthday.

Restrictions

1. Children (both boys and girls) from 0 to 10 years of age are eligible.
2. Minimum Age at Entry : 0 years
3. Maximum Age at Entry : 10 years
4. Maturity Age : 26 Years
5. Mode of Premium : Single Premium, Yearly, Half-Yearly, Quarterly, SSS.
6. Minimum Sum Assured Rs.1,00,000/-
7. Maximum Sum Assured Rs.25,00,000/- within the overall permissiable limit of Rs.50,00,000/-
8. Policy will be issued only in multiples of Rs.25,000/-
9. Loan against the Policy is not available.

Exclusions

Suicide: This policy shall be void if the Life Assured commits suicide at any time on or after the date on which the risk on the policy has commenced but before the expiry of one year from the date of the policy. In case of death due to suicide during this period, the Corporation will not entertain any claim by virtue of this policy except to the extend of a third party's bona fide beneficial interest acquired in the policy for valuable consideration of which notice has been given in writing to the office to which premiums under this policy were paid, at least one calendar month prior to death.