Buying a ULIP? Scan the charges that you will have to pay

Usually , when unit-linked insurance plans (Ulips) are discussed, the talk veers more towards the higher upfront charge for premium allocation than other categories. The rest of the charges like policy administration , mortality and switching are often not seen as components that could significantly push up costs.

Recently, insurers and policyholders expressed concerns when the Union Budget extended the service tax net to include components like premium allocation and policy administration charges in Ulips.

 Existing charges seldom attract such attention

However, existing charges seldom attract such attention. Many tend to assume that since all companies have to follow the cap on Ulip charges put in place by the Insurance Regulatory and Development Authority (Irda), these are uniform. So, they feel, there is very little to evaluate in terms of charges while comparing policies to identify the right one. But, this is not the correct approach.

Understanding the intricacies of various categories of charges that you will pay over the entire term of the policy will help you make a better decision . Here are the major ones:


Premium allocation charge


This charge is the focus of attention of both policyholders and insurance agents. It often overshadows other charges built into the policy. Several life insurers promote some of their Ulips as the ones with the highest premium allocation - in other words, the lowest allocation charges in the initial years.

While this may be true, it does not necessarily mean that the total charges under the product are low. In very simple terms, with the total charge being capped, a customer will, by and large, find that the total charges will be within the limit (and the year-wise sub-limits ) set by Irda.

However , high premium allocation initially does not necessarily mean the total charges are low. A customer should always calculate the composite charge over five years while making a comparison. The overall charges remain the same over a period of time, but in the initial years, some companies deduct lower premium allocation charges and make up for it by keeping the policy administration fee high.

Policy administration charge 

This lesser-talked about charge has seen a steady rise in some policies since the ceiling on Ulip charges was introduced in September 2010. Nowadays, the premium allocation charge is low. Some policies state that no allocation fee will be levied after five years.

The catch here is that the policy administration charge keeps going up by say 5% every year, which will compensate for the decreasing allocation charges. The combination of total charges may vary, but they have to abide by the limit on Ulip charges.

Hence, the need to closely study the entire charge structure and you should not ignore this seemingly-small element. Concentrating only on the charges during the first few years while comparing policies could lead you to assume that the one the levies a lower fee upfront presents a more cost-effective option. 

Mortality charge

This is the amount deducted from your premium to arrange for your life cover. Typically, it is arrived at by factoring in your age, mortality tables used by the industry and also the company's own claim experience for the category.

Though the mortality charges for a simple term plan and a Ulip should be the same, some insurers levy differential rates. That is, the mortality charges in a Ulip are hiked as they need not conform to the charges cap imposed by Irda. Some insurers have increased mortality charges.

This factor can be considered while choosing one insurer over the other. As the benefit illustration does not take the Insurance Charge into account, sometimes insurers increase the charges for such benefit. The client needs to be careful and may compare insurance charge levied by different insurers separately.

Fund management charge  

As per Irda's cap on Ulip charges, life insurance companies cannot impose fund management fee of more than 1.35% per annum.

Guarantee charge

Again a component that does not fall into the charge-ceiling ambit, it comes into play in case of Ulips of the highest-NAV guarantee variety . This also means that insurers are free to levy a guaranteeing fee they deem fit. It is usually in the range of 0.40%-0 .75% per annum .

Given that offering this kind of guarantee results in the fund being debt-heavy , it may not be a great proposition for a customer who is high on risk return expectation . However, it does offer comfort and protection to policyholders with nominal returns. 

 Surrender charges

Irda has laid out guidelines on the maximum surrender charges that can be levied by life companies. For instance, if you surrender a Ulip in the first year, the charge will be 6% (of annualised premium or fund value), subject to a maximum of Rs 6,000. Similarly, limits have been put in the place for the next four years too. No surrender charges will be applicable after five policy years.

Switching charges

All Ulips offer policyholders an option to switch - that is, shift their money - from one fund offered by the company to another. Majority of Ulips offer funds ranging from only equity to pure debt and combination's of these asset classes.

Usually, a certain number of switches - ranging from four to 12 in a policy year, depending on the company and the product - are allowed free of cost. If you wish to exercise the option beyond this limit, you will have to shell out switching charges, which could go up to Rs 100-500 per switch, again subject to the company's charge structure. 

Miscellaneous charges

This is a relatively smaller element in the charge structure. It gets activated if, for example, you decide to change the mode of premium payment from yearly to quarterly.

Finally, bear in mind that since all companies have to adhere to the cap on charges, the total charges over the policy tenure will be the same. Therefore, you would do well to focus on the sum total, rather than charges being imposed in the initial years.

Charges can be levied in different combination's, but the customer should only be concerned with the overall costs. They simply need to look at the benefit illustration to ascertain the total charges payable over the life of the policy. 

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Use in-built insurance cover to protect your credit cards

Thanks to the convenience they offer , many well-heeled Indians stuff their wallets with a plethora of cards these days. In addition to plain-vanilla cards, there are the co-branded ones promising offers and reward points for shopping, fuel recharge, air travel and much more.

The temptation to make use of the cards, therefore, is hard to resist . At the same time, this tendency to hoard cards also makes you vulnerable to the threat arising out of stolen cards. For instance, the stolen card can be used to swipe while making purchases at merchant establishments or cloned (duplicated).

Some card issuers offer in-built insurance cover 

Acknowledging this lurking danger , some card issuers offer in-built insurance cover against such frauds, particularly for holders of high-end credit or debit cards. Offering a zero-liability cover with premium category debit cards too is becoming common.

Several banks including ICICI Bank, HDFC Bank, Axis Bank and HSBC are offering this feature now. This facility, for which the debit card holder does not have to incur additional charges, undertakes to reimburse fraudulent purchases made by swiping a stolen debit card at point of sale terminals. In most cases, ATM and online transactions do not fall in the ambit of this protection. The extent of the cover, de-pending on the bank, ranges from Rs 1-2 lakh.

Then, there are specialised covers , like the ones offered by CPP Assistance Services (the group insurance cover is provided by Bajaj Allianz). It can be purchased directly from this company as well as through banks like Citi Bank, Axis Bank, ICICI Bank and HSBC who have tied up with CPP.


Stolen credit card? Inform CPP through its toll-free number


In the event of your card being lost or stolen, you need to inform CPP through its toll-free number. You do not need to inform individual card issuers about the loss. Depending on the plan selected, the cover could go up to Rs 1 lakh prior and Rs 20 lakh post-intimation .

You may have to shell out an annual fee ranging from Rs 995 to Rs 1,295, depending on the cover chosen . However,the plan does not cover online frauds.

 Risk of card frauds in the online space has come down

Also, it is activated only if the card is lost or stolen. But largely, the risk of card frauds in the online space has come down due to the Reserve Bank of India's (RBI) insistence on two-factor authentication for such transactions. Tata AIG General Insurance too has stepped into this space and is offering fraudulent charges cover. Here, your card is insured against the misuse of credit or debit cards.

The protection is extended for up to 12 hours prior to reporting the loss. Again, frauds pertaining to cash advances made using the card will not be covered.

In short, while these products seem like the perfect solution to the ever-present risk of frauds, it is best to go through the list of exclusions (conditions under which your loss will not be reimbursed) before buying one. 

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Herbal Minerals: Potassium Health benefits of potassium

“Herbal minerals” is certainly not the term used in science or medicine, but it may help us a little when trying to learn more about the most important minerals and micro elements that can be found in foods or herbs we use to support the functions of our body. We’ll start with potassium, one of the most important and essential minerals that plays a great role in metabolism, various processes on cellular levels and many other aspects. Health benefits of potassium vary: from maintaining the function of our nervous system to regulating our body’s water balance.

The recommended daily dose of potassium  is about 3500 mg: that much is required for usual people, but for athletes and those who lead a very active lifestyle the daily dose can be a little higher than the stated above. Potassium can be easily absorbed by our body but it can not be stored for long time.  Natural sources of potassium include primarily foods like green leafy veggies, bananas, apricots, potatoes, raisins, sunflower seeds, oranges, kiwis, soy beans, pumpkin, mushrooms, whole grains and many more. You can receive good amounts of potassium by consuming milk, fish and red meat as well. Herbal sources of potassium include such medicinal herbs and plants as nettle, sage, red clover, scullcap, hops, plantain, horsetail, cantip and others.

Potassium is one of three electrolytes (along with sodium and chlorides) which are vital for our body. First of all, this mineral regulates the function of our nervous system: it ensures normal transmission of signals from the brains to the destination points, and also it ensures proper electrolyte balance. Potassium is an essential mineral to support muscle function in the body, and also it works with sodium to maintain a proper water balance in the body.

Herbal minerals like potassium can assist in lowering blood pressure, lowering the risks of stroke, assist detoxification and improve the function of kidneys. Health benefits of potassium include improving metabolism and preventing hyper-acidity. For proper function of our main body systems, it is important to support necessary levels of potassium with certain levels of vitamin B6 and sodium. Potassium deficiency can be displayed by the symptoms like a lack of coordination, fatigue, cramps, diarrhea, retarded bone growth, confused mind, hypertension, and even certain heart irregularities. To enjoy the most of the above stated benefits of this mineral, add  natural sources of potassium  to your daily diet, and stay always healthy!

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Health Benefits Of Walking

It is not a revolutionary idea that regular exercise and a healthy diet are two piles of a successful weight management program. However, as the U.S. Surgeon General report on physical activity and health in America suggests, more than 50% of modern American people are not involved in any sort of regular physical activities. Why not to try walking, one of the easiest and the best ways to maintain good health? It is known that walkers have reduced risks of many killing diseases like cancer, stroke or heart attack. Therefore, regular walking is a great natural way to longevity and excellent health.


Studies carried out under the sponsorship of British Heart Foundation, US Dept of Health and other world’s leading health care organizations have revealed the following health benefits of walking.

• This type of physical activity assists in lowering LDL cholesterol (known as “bad” cholesterol) and increasing HDL cholesterol (known as “good” cholesterol) levels in our blood, this way improving lipid profile of blood.
• Due to the above mentioned effects, regular walking is linked to lower chances of serious cardiovascular diseases like coronary heart disease, myocardial infarction, stroke and so on.
• Health benefits of walking also include improved circulation and lower blood pressure.
• Walking helps us in more effective weight management by lowering the amount of body fat.
• In particular, walking can help you improve your waistline and the shape of your legs.
• Also, it is considered to be among the most effective activities which can help in reducing cellulite.
• Regular activities like walking can assist in increasing bone density, this way lowering our chances to have osteoporosis and other related health problems.
• Walking is connected with reduced risks of such disease as non insulin dependent diabetes.
• At the same time, walking also reduces risk factors for development and progress of type 2 diabetes.
• Health benefits of walking embrace all positive effects of this type of activity on your respiratory system as walking is considered to be a great breathing exercise.
• Walking is an excellent stress management technique, which can be used to reduce both acute and chronic stresses.
• This type of physical activities is an amazing tool for combating depression and related symptoms.
• Studies has shown that walking helps in normalization of our bowel movement, this way preventing colon cancer.
• Walking is a great tool for bladder function control.
• Health benefits of walking include lower risks of osteoarthritis and better condition of joints.
• Walking can help in pain control by stimulating endorphin production in your body.
• Walking on a regular basis can be a brilliant opportunity for you to meet other people and make new friends, this way improving your mental health.
• It is a great opportunity to develop coordination and flexibility.
• According to the reports of US Dept of Health, regular walking is liked to improved general health, as well as to lower mortality in people of all age groups.
• Finally, walking if cost-free, easy and very pleasant activities for those who want to spend their free time with a great purpose!

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Weight Loss Time Trouble

It turned out that a strong desire to eat something delicious overwhelms dieters not at night, as many think, but in the afternoon – at about 15.30.

This conclusion was made by the British researchers with the participation of a dietician Linda Obyrne. They were watching a group of volunteers consisting of 1250 people who are on a diet. The purpose of the research was to find out why and when people lost control indulging in culinary excesses.

It was found out that 62% of people violated the established ration in the middle of the afternoon, 22% – late at night, and 16% – in the morning. 56% ascribed his failure to stress, 26% – to boredom at work, while 8% said that their colleagues brought to office all kinds of delicious things that undermine the spirit of those who are on a diet. In general, the information gathered allowed us to calculate the most dangerous time for a diet – 15:23. if you want to lose weight, be especially vigilant after 3 p.m.

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New Weight Loss Secret

Chronic lack of sleep and a lot of stress are the most serious factors of overweight. People who have little sleep and live in constant tension, are not likely to lose weight even on the most effective diet and fitness program.

The specialists at Yale University (USA) were watching 472 overweight people for 26 weeks. Everybody under test sat on a low calorie diet rich in fruits, vegetables and grains, and did fitness at least 3 hours per week. On average, the volunteers lost 7 pounds, but those who got not enough sleep and were often nervous, mostly lost only 3.5 pounds and less. The most successful in slimming were those who slept 6-8 hours and had a low stress level.

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Ugadi Celebrate the New Year with gold

It is believed that Lord Brahma started creation on this day - Chaitra suddha padhyami, which is observed as Ugadi. The festival also marks the beginning of the spring season and is considered to be the auspicious time to purchase gold.

 Ugadi is celebrated in its full fervour across South India. Ugadi is the New Year in Deccan India - a festival that celebrates the onset of spring and a time of the year that is marked with growth, prosperity and well-being of its people.  Ugadi marks the celebration of new life in South India. It’s known as Ugadi in Karnataka and Andhra Pradesh and as Gudi Padva in Maharashtra. Ugadi is taken from the word Yugadi which means beginning of a new age. It is celebrated throughout the Deccan region. For centuries, India has witnessed a deep-rooted emotional bond existing between gold and the numerous religious and festive occasions, the country loves to celebrate.

The relationship is one of celebration, prosperity, continuity and strength. Irrespective of geography and festivals, gold continues to be at the heart of every celebration.  The World Gold Council has always endeavored to promote Ugadi amongst the natives of Karnataka and Andhra Pradesh. They organize various events to promote the festival and its ritualistic association with gold, imbibing the cultural significance among the people. To add a golden glow to the festivities this New Year, WGC has created festive zone in the stores to showcase new gold jewellery for the festival.

 Ugadi is all about the hopes and joys of celebrating the advent of spring, New Year and new beginning for people in Karnataka and Andhra Pradesh. It is about giving a prosperous and auspicious start to the New Year with the purchase of new gold. To this effect, jewellers bring out fresh collections of gold jewellery to engage the attention of potential buyers. New designs in traditional gold jewellery are also brought out to engage new buyers. The markets definitely witness an upsurge in the demand for gold during the festival.

During this time you will also women dressed to their best soaking in the festive spirit. They are seen with jasmine flowers woven in clusters and adorning their braids with a touch of gold which accentuates their beauty. Women also buy gold jewelery to add to their already enviable collection. Various designs of solid gold jewelery and temple motifs find favour with the women during this festive season.

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What is body-con Dress?

One of the hottest trends this season is the bodycon dress, which is the abbreviation of ‘body conscious’, read tight body hugging style bandage dress. This flattering Herve Leger dress has paneled angles that give it a shapely, form-fitting bodice look. The bright color comes with substantial knit and has a tonal strap that reaches across the back shoulders so that your outfit remains slip-proof.

You can pick a bodycon outfit in almost anything ranging from tight figure hugging pencil skirts to the snug, high-waist jeans. It is all about silhouette and showing of your best assets. However, the entire look can be a faux passe if you flaunt the wrong accessories.

Don’t be scared of experimentation. But pick something that your body is comfortable with it. Jessica Alba swears by Spanx. You can also try a black body con dress because black creates a slimming affect. Now, there are a few factors to keep in mind when you pick these outfits to stay high on the fashion-quotient.

• Try playing out with proportions. If you are heavier on the thighs and butts, opt for loose fitted jeans or pick a dress that hugs the top. If you have a slender lower bottom then pick shapes and styles that hug the bottom. Pair it with loose and colorful tops and tanks to work the balance. Boyfriend jackets work well here too.
• Play with proportions. As I’ve stressed in previous articles, if you’re wearing a tight item of clothing, it’s a good rule to balance it out with an item that’s not as form fitting. Wearing a tight skirt? Try a colorful, loose-fitting tank top for balance.
• Choose bodycon outfits as per occasion. For instance, this Halogen pencil skirt comes with panels to create an always-appropriate silhouette. It has a four-way stretch weave to give you enough flexibility. The high waist skirt can be paired with a formal shirt during the day and a shimmery tank for evenings.
• Don’t show off too much at one go. It just makes you look like a fashion victim. If you are wearing a cleavage showing top, avoid very short bottoms or tight bottoms. Instead wear a turtle neck or high button blouse to look classy.

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Policy Rate Hike- Impact on Home Loan Minimum

The inflation rate has been high over the last few quarters. There are many factors behind this. The government and the Reserve Bank of India (RBI) are taking cautious steps to control the rising inflation rate while ensuring minimum impact on the economic growth rate. The RBI has implemented monetary policy tightening steps many times over the last one year.

However, the inflation rate is still not under control due to the rising commodity prices in the international markets - crude oil, coal, nonmanufacturing products etc. An uncontrolled inflation rate has an adverse impact on the overall economy, and therefore, the RBI is trying to keep it under control.

When the RBI increases its policy interest rates, it signals rise in the costs of funds for commercial banks. The banks pass on the additional costs to the borrowers (individual as well as corporate borrowers) by increasing their base interest rates.

When the banks increased their base rates, interest rates on various loans (home loans, consumer goods loans, automobile loans etc) go up automatically. The interest rates on loans are directly or indirectly linked to the base rates. The interest rates on new loans will also go up as they are linked to the base rates.

The RBI has done a good job of implementing the monetary tightening measures in small, staggered steps and has ensured a minimal impact on borrowers and businesses. The RBI has increased the policy rates eight times since the last five quarters.

The rate hikes are implemented in the smallest possible steps at regular intervals. This way, the rate hikes has increased the interest burden on corporate as well as individual borrowers gradually and not sharply. It is therefore manageable and the EMIs don’t shoot up for home loan borrowers.

Quick Bytes:

• The rising inflation in the past few months has made the RBI implement many monetary policy tightening steps.
• Factors such as rising commodity prices in the International Market is a major cause for Inflation.
• While implementing the monetary tightening measures. RBI has taken small steps to ensure minimum impact on borrowers

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Title Insurance makes property transactions safer for investors

Owning a property is everyone’s dream, may it be a person earning a humble living or someone who is rich. It is the predominant goal of a middle-income person while he plans for his family and arranges his life for a comfortable living.

The realty sector is in a nascent state as was in the US a century ago. Americans had to deal with ‘conveyancers’ for the real estate transactions and title insurance changed, corrected and coordinated various loopholes in America’s land and title Laws. It overcame many issues that were rampant in the US like defective titles, forgery, and frauds in realty transactions.

An overview of the title insurance in the US and its process can be drawn in simple terms. A person who opts for a title insurance policy will generally cover these items though there are variations in types of policies.

Preliminary search:

Usually, a preliminary search (for title) does an in-depth analysis to declare a title as ‘free and clear’. It includes search in US citizens’ public records for vesting information, legal description of property (residential/commercial), map of the property, property tax-paid status, any liens on property, covenants applicable, judgments and encumbrances associated.

Title insurance policy creation:

The title insurance companies, hence, assure that if they miss any information that may result in financial loss, they will undertake the same.

Claim settlement:

Settlement of claims is done in these instances:
Loss or damage as a result of defect in title
Mistakes made during a title search
(unpaid property taxes, missed interest from a heir, unpaid tax liens etc)
It’s not an alien concept and can be easily seeped into the current system in India.

Why we need title insurance for all property transactions:

Registration of property:

Its thumb rule is that properties should be registered, which will determine or trace the history of ownership of property, which is referred as ‘title’ in the US or European countries. Moreover, relevant documents like mother deed, encumbrance certificate, tax (Khata) certificate, NOC etc will be required for the registration process and to prepare the authenticated sale deed in the Indian context. This process is mandatory and can be quicker with title insurance, where the title experts will conduct a thorough search to obtain the details of the property records.
A cue to the search is the most recent sale deed and a back-dated search to obtain the source of the property ownership.

Safer realty transactions:

For small, medium or large property dealers, there is always a risk involved when a part or entire property is under a different owner than the one they purchased from. It is becoming rampant with many unregistered properties and unauthorised acquisition of land in a few regions in India.

Flaws in land and property laws will continue to be a debatable issue but title insurance system can cover this loophole, where there will be a clear distinction between a legal or illegal property. The government is already in the process of digitising the land records which is the first step towards seamless property transactions.

Rapid urbanisation:

For more than a decade now, urbanisation has been following an accelerated pace. With industry, not just IT/ITeS, growing, other sectors are gaining global attention too. Recession around the world did hit India to some extent but the industrial experts were positive that it would not be for a long time. Now, as the world economy and India recoup from recession, there is an increasing demand for residential and industrial properties across India.

With the current system of tracing the ownership or other property details, there is scope for frauds. Title insurance will be mitigate these risks that can result in legal transactions while we fuel urbanisation.

Assurance to the property:

Industrial experts in the title insurance domain do a detailed search and will cover any future losses that may arise if they miss elements that question the authenticity of the property, like lack of clear ownership history, delinquent tax, incomplete documentation or unregistered property. This is a one-time cost as title insurance is paid once along with charges as applicable. Indian consumers, being more traditional compared to the West, will find it beneficial to pay a title insurance premium rather than go through the hassles of legal tangles in case of defective title.

There is a great need to have title insurance in India to change the modus operandi of property transactions. The digitisation of land records, Government’s amendment to Land Titling Bill 2010 and fair acceptance of title insurance by the realty players can bring about a facelift to the realty sector. Foreign investors will be willing to invest their funds in the realty sector. The absence of title insurance has been a concern.

Quick Bytes:

• This Insurance Scheme will entail a thorough search by experts from the industry, thereby making it easier for the investor to buy a property with a clear and marketable title.
• With rapid Urbanization and demand for property on the increase across the country, this scheme will be more than welcome.
• The computerization of land records will help in the title insurance process.

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