Health insurance policy: All you need to know about sub – limits

You can never take your health for granted. At some time in your life, your health can take a turn for the worse. This can be due to genetic conditions or acquired ones. But no matter the risk and eventuality of you falling sick, you need to stay protected, regarding finance.

This is where the health insurance comes into the picture. A health insurance plan will help you ensure that you are financially taken care of when you fall sick, without putting a burden on your current savings. But when you are selecting any health insurance plans, you must look out for certain factors, namely sub – limits.
By definition in the legal sense of insurance, the limitations in an insurance policy apply to the amount of coverage available to cover a specific type of loss. The sub – limit is a part of the limits which would otherwise be applied to the loss.

How do sub – limits work?

We can take it through an example. Mrs Saini needed to undergo treatment to get rid of kidney stones, which would have amounted to Rs. 25,000. She already had a health insurance cover of Rs. 2 lakh, and hence was covered for the treatment. She got the acknowledgement from her insurance provider and underwent the required surgery. However, due to a few complications, she needed to undergo an additional kidney stone removal surgery which would have amount to Rs. 75,000. However, as per her policy conditions under the sublimit condition, there were limitations in terms of treatment costs for specific illnesses. She was viable only for 25% of the sum assured in her health insurance cover. Since she had already claimed Rs. 25,000 in her previous she was only viable for an additional Rs. 25,000. The remaining Rs. 50,000 she had to pay from her own funds.

What is the solution to such policies?

In order to avoid such sub – limits on any of your healthinsurance plans, you will need to first check if your health insurance is under the category of the old policies or under the new one. If it is under the old plan, switch to a new generation healthinsurance plan. In the old health plan, look out for the sub-limits policies, which you can compare to the new plan. In the same way, look out for sub – limits in the new plan. If you can avoid eradicating the sub – limits, ensure it is at a minimum level. While you may end up paying anextra premium for this sake, at least you will avoid the situation where you will be forced to compromise on your treatment if the situation ever arises.

In most cases, if you claim your insurance at least once in your life, you will recover the major part of your premium paid over the decades. While you may feel that you would lose several benefits by moving to a new generation plan, you can be well assured that you will still get the best of your tenure benefits.
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Life insurance plans: Mistakes you need to be avoid

As an earning member of the family, not only will you be paying off your bills and debts, but will also be the financial foundation for the other members of the family. In the event you pass away, this foundation can be affected, leaving a financial burden on the other members of your family. During this time, your family members may not have the financial ability to earn sufficient or even any funds to replicate your earnings, leaving them financially unstable.

However, with life insurance, you can offer your family the financial stability they require, in the event your death occurs. In this way, you can be well assured that your family is well taken care of, leaving you with a stress-free life. But before you opt for any of the life insurance plans, there are certain factors you need to be aware of. For one, you need to be aware of the possible mistakes that can happen when you apply for the insurance. Given below are some of them:

I don’t require insurance because I’m young: Youngsters who have just started earning may depend on their parents or siblings for the more complex financial requirements. However, the basic purpose of the life insurance is to ensure that your family members are not put in a situation where they are in a financial crunch, in the event of a death of the earning member. In this case, life insurance works as the ideal income replacement tool. You will first need to estimate the size of your financial liabilities, which has not been provided for otherwise. You will need to estimate then the shortfall in the savings in matching these requirements and adequately get a life cover. Opt for a plan that offers you a high cover at a low cost.

Treating insurance as an investment: Life insurance may be perceived as an endowment, money back offers, or market linked investments. These products have an element of insurance, with the potential to deliver returns. However, in reality, the life insurance policy will only offer you return through mortality charges. In other words, it offers a low investment chance. You only need to treat insurance as a means of financial protection over an investment product.

Exiting the policy at the wrong time: Circumstances may arise where the policyholder would want to exit the policy before the maturity is met. Exiting the insurance plans before a few years left to maturity, may not be the right decision. The reason behind is that the surrender cost will still exist, although it may be lower to the exiting charge in the initial years. Once the policy is bought, it should be continued till maturity, to optimise the cost benefits of the life insuranceplan.

What are the reasons you should invest in an insurance policy?

Investing ininsurance can be one of the best and most important financial decisions that you can make in your life. In reality, insurance policies will come down to the fact that it is one step close to the ideal protection, care and safeguard for your own future. Although it is a highly debatable topic, you can benefit from so much, with the right insurance plans. Given below are some of the most important and convincing reasons as to why you need this financial protection.

Security and Assurance: When you think of insurance, the first advantage you will think of is the security for your family and the loved ones that it offers too. insurance policies you need to be aware of. You can be well assured that there will be enough security cover for you and your family in the event any uncertain situations will arise.

Issues of debt: If you have any debts that you need to pay off, your insurance will ensure that your debts will be paid fully. No individuals wish to pass their burden off to their family members if they are unable to pay it off themselves due to unavoidable circumstances. With the right insurance plans, you opt for; all your financial debts will be paid off with ease.

Retirement plans: Once you retire, your monthly source of income will come to an end too. Very often, this may be a source of worries and tension for several individuals. However, with the right insurance plans, you can be assured ofan income that will satisfy your basic requirements, without any worry or stress. All you need to invest in a pension plan, wherein which as the end of your retirement, you can enjoy the fruits of your labours.

Long term plans and dreams: Why should you let your dreams or hopes come to your end just because you have retired? By using the funds you have earned from your life insurance, you can always fulfil your lifelong hopes, plans and dreams. Whether you want to open a small business or purchase a new home, you will get all the financial support you want through the right insurance plan.

Put your business worries away: The insurance, apart from benefiting your family, will also ensure that your business plans are executed with ease. There are several policies that will provide you with the protection for your business for a fixed term, especially during the event of your death.

Invest for tax saving: One of the several reasons as to why individuals prefer to invest in life insurance is due to the tax benefits one can get after investing. Irrespective of the plan you have to opt for, you can save animmense amount of tax with the different policies
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3 prepaid travel card facts you need to know

Travelling around the world will offer you plenty of benefits. For one, you get to explore and experience new places. You also have plenty of opportunities to meet new people as well as make priceless memories.

However, while you may be able to plan your dream trip, there remains the fact that you need to pay the substantial amount on your dream trip. This is where the travel card plays an important role. With this prepaid card, you can load the required funds on the card and use it for all your financial requirements before and during the trip.

But before you apply for any of the travel cards, here are a few facts you need to know:

Funds on your cardare safe even if the lending institute shuts down: Plenty of banks and financial institutes offer prepaid travel cards to their consumers. In the event the financial lender who provided you with the card shuts down, you need not worry. When you load cash onto your prepaid card, your funds will go into a ring-fenced account. It will be separated from the prepaid card provider’s account. However, it is best that you keep this card only for emergency expenditures or immediate cash spendings rather than a place to store heaps of it.

You must report your card if it’s lost or stolen: Anytime you use your card, you risk losing it or getting it stolen. In the occasion is does, it is best to report it to the lender, who will take immediate steps to block the card. In this way, you will not lose out on any funds. However, you will need to apply and pay for a replacement travel card as soon as possible. Ensure that your prepaid card is contactable. If it’s stolen and used for small fraudulent transactions, then it the concerned lender will be able to track it. Additionally, it is worth alerting the local security service if there’s been a theft. This will help you recover or claim any losses on your travel insurance, as you can provide the incident number.

Providers tend to charge their own exchange rate: Unlike specialists credit cards such as Mastercard’s or Visa’s which have fixed exchange rates, others may not have the same system. In other words, anytime you use a travel card provided by a private institute, you may be charged for an exchange rate that is higher than the base rate. The typical rates used as in the exchange rate for such institutes will normally be between 1 to 2.5%. The best way to get the best out of the exchange rate is to make a comparison between the spot rate and the prepaid card’s own rates. Using this, along with the other additional charges, you can work out the best rates that will suit you even when you are abroad.

Is the debit card the new cash system today?

There are plenty of banking cards available, namely, the ATM card, credit card and the debit card. Each of these cards has different features and can be used for different options. However, amongst these options, the debit card is one of the most favourable options.

Even then, most individuals barely use this card, other than to withdraw funds. While it can be used to withdraw funds, it can also be used to make an online transaction. Additionally, it offers several similar safety features, such as the PIN input, and the embedded chip system which encrypts your transaction data.
However, with the recent implementation of the demonization move by the government, more and more individuals are using the debit card for other purposes. Statistics have indicated that, ever since the move by the government, the usage of debit cards has increased almost 100%.
Here are the reasons why you should use the debit card:

You need to reduce your credit card debt: Using a credit card offers you plenty of financial flexibility, but the fact remains that you need to repay back the borrowed funds. This is often a big responsibility as very often, many of the card owners are behind on payments. Additionally, there is also the inclusion of interest rate on the amount borrowed. Any delay in repayment will increase the overall amount that needs to be found. Therefore, to reduce the reliance on the credit card, the debit card makes for a great alternative.

You get perks for paying debit: The ATM card does not offer reward points, whereas credit cards are not the only one who do so. Several merchants and retailers are offering incentives to consumers who pay off their purchase with a debit card. This is because the credit card attracts a processing fee, which merchants would love to avoid by switching to the debit card. Keeping with this trend, most lenders have also offered reward point systems for debit card users.

You will avoid any unnecessary fees: Several banks waive monthly checking fees, especially for account holders who opt for debit purchases each month. In other words, if you favour your other banking cards too much, it could mean you forfeit an opportunity to avoid this fee.

Save time: The problem with ATM cards is that it can be used only for one purpose. With the credit card, it will take time for the payment to be registered, this, in turn, will lead to several delays. In this way, you can save considerable time on all your transactions, especially if you need to get them done on an urgent basis.

Get a better foreign exchange: If you are a frequent traveller abroad and need to access physical funds urgently, you can opt for using a debit card over the credit card. This is because, you are more likely to withdraw funds from the foreign local ATM at a wholesale exchange rate, as compared to a percentage one.
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Are you aware of the risks associated with forex trading?

The forex market is one of the largest investment markets in the world. This is a liquid market is a place where currencies are traded, either for trade or business purposes. One of the main aspects of this international market is that there is no central place for foreign exchange. Rather, the currency trading is done electronically or via networks between traders from around the world, rather than on one centralised exchange. It is open throughout the day and at most five and half days a week, with the trading happening the major financial centres of several global cities.

As you can see, the foreign exchangetrading offers plenty of return with the right investment strategy. However, while the market does offer you plenty of benefits, there remain the risks. By being aware of it, you can ensure that you make the most of your investment while ensuring that you get optimum returns without considerable loss. Here are a few risk factors you can take into consideration:

Leveraged trading carries a high risk:You may have heard how trading with a leverage can be aprofitable route to stretch your capital. As a trader, you have the option to leverage the funds within your account and generate larger profits in accordance to the amount you invest. But while you may have an advantage, it also comes with a potential risk. With this foreign exchangetrading, your losses can also be greater than the total margin held. Hence, the reason why the leverage is often referred as a double-edged sword. But there are few steps you can take to mitigate these risks. You can identify the potential places where you can incur significant losses, especially when trading on a margin. Ensure you have a risk management plan such as the stop losses in place to prevent excessive loss.

Risks of Forex trading in multiple markets: There are plenty of forex trading around the world. By having a broad focus on several markets can lead you to miss out on the best opportunities. This normally occurs due to lack of focus. The best way to avoid this is to create a trading strategy that includes a narrow focus on a few markets. This will go a long way to monitor a suitable volatility. You can start with a shorter watch list of the forex markets. Focusing on the most liquid and volatile markets with tights spreads will be the ideal place to start.

Risks associated with a margin closeout: A margin closeout occurs when your account falls below the 50% mark of the initial margin. All your open positions will be immediately liquidatedin accordance with the current forex rates. This helps prevent any possibility of loss which exceeds your investment. In fast moving forex markets, your losses can exceed your capital. In multiple open trades, the risk of margin closeout will be high, due to the inability to follow several open positions simultaneously. To avoid this, you can reduce your account leverage; you impose a higher margin requirement on each trade. This keeps you further away from the possibility of a margin closeout.
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Demat account: Common FAQ’s answered

The stock market is one of the many potential places to invest your funds. Investing in the stock market is often risk, but it also offer plenty of high returns. With the right management and planning, you can take advantage of the stock market to secure your financial position and earn an income.

But in order to do so, you will need to open a demat account. But what is a demat account? This account is like a bank account that will hold your stocks and shared. Any shares and securities you purchase or sell are held in a dematerialized form in this account. As of now, it is mandatory for you to open a demat account, in order to carry out any transactions in the stock market. Once you have opened the account, you can easily purchase or sell your shares as required.

Given below are some of the FAQ’s and their respective answers about the demat account:

How to open a demat account?

Know you know what is a demat account, you now need to know how to open it. In order to open a demat account, you would first need to get in touch with the registered depository participant. This entity functions like a bank or broker. In order to get the list of registered DP’s you can check online. Once you access their website, you can easily download or collect an account opening form from the office or website. Once you fill out the form and submit it, it will usually take a week or two for you to open the account. Ensure that you add a nominee when doing so.

What are the charges that are levied on the demat account?
In most cases, the account opening charges will vary from institute to institute. Certain private banks do not charge an opening fee, while others may do so. However, certain institutes do offer a refundable fee. The other types of fee charged include annual maintenance free, custodian fee and transaction fee.

What is a depository?

The depository is an organization that is charged to hold securities such as your shares, debentures, bonds, government securities, and mutual funds amongst many others. It holds your shares and stocks in an electronic form. The securities are held at the request of the investors through a registered Depository Participant. This DP will also provide services related to the transactions in securities.

What is dematerialisation?

Dematerialisation is the process wherein which, the physical certificates of your investments are converted into an electrical form. It is then credited into the account that is held with your DP.

Can you open multiple demat accounts?

You can open several accounts under the same name, or with different depository participants. However, you will need to fill the KYC form for every account you will need to open. You will also need to submit certain set of documents pertaining to the KYC form that includes your proof of identity, address and PAN card.
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