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Questions mainly focused on term policy for children during our weekly insurance chat on Tuesday. The insurance and investment consultant Jigessh Patel dealt with all the questions deftly. Like always, he insisted on adults buying whole life policies before venturing into children's policies. Here is the transcript:
Jigessh Patel says, Hi Everyone, let's chat
VG asked, Hello Mr Patel. I'm 30, married and have one infant child. My gross annual salary is 10 lacs. I have 13 lacs of loan liabilities. I already have 25 lacs worth of term assurance from Kotak. Now I want to buy for another 50-75 lacs. Which one would you recommend? That of LIC or SBI's Shield with the 50% SA increase every 5 years option? Or any other? Thanks.
Jigessh Patel answers, Hi , I would suggest you to purchase a Whole life unit Link Policy ,with paying commitment for 10 to 15 yrs and ULIP policy from a company which gives maximum Cover againsy premium. Please compare to get best deal . You will get good returns and good cover in minumum cover and commitment
Girish asked, Sir: I have insured myself by TATA Mahalife - My premium outake is 32000 p.a.. Is it a good policy? I am also interested to go for the Pension Plan policy for my wife (24 years old) and Education Policy for my kid (3 years old). Which policy i should opt for ? Please guid.
Jigessh Patel answers, Yes TATA mahalife is Guaranteed Traditional type of policy. I would suggest you to purchase a more flexible policy ( ULIP Whole life) . Where you will get higher cover and also better returns . Your returns should be ateast 10 % from the ploicy to get a decent return afrer taking inflation into consideration. This plan will also take care of Tax free pension.
Ashish asked, Hi This is Ashish. I have 2 daughters age 3 and 1. I want to invest for their education and marriage. Which are policies that I can invest into looking at those 2 milestones.
Jigessh Patel answers, HI , Suggest you to purchase a ULIP plan with max cover in your name and you can nominate your childen . you can choose a 30 to 50 % equity option as you need in the money only after 15 years. there a lot of ULIP plan. Purchase after comparing charges and features of diff Companies
helloHK asked, Hi, I have taken 5 Lakhs Jeevan anand and 5 lakhs Jeevan chhaya LIC scheme. was it good idea or i could have opted some other options. I want to invest now but those funds who donot provide Tax rebate because I have already reached to > 1Lakh for saving under tax rebate. what are the schemes I should choose for saving?
Jigessh Patel answers, You can invest from your HUF account or from your wifes bank account to get further tax benefit. Today you should look further at Tax free Maturity.ULIP plans will get you good returns in a long run when you select correct Fund option.You can Also look at RBi bonds
Ashish asked, Hi This is Ashish. I have 2 daughters age 3 and 1. I want to invest for their education and marriage. Which are policies that I can invest into looking at those 2 milestones.
Jigessh Patel answers, Buy a ULIP plan for your daughers, with insurance cover in your name. Expected to get you more than 10 % in th elong run .traditional insurance palns ill get you max 6 to 7 % returns
ankur asked, hello sir, m an advertsing professional. Will be getting by the fag end of 2007. is it good to go for mutual funds at this time?
Jigessh Patel answers, As long as you invest in a monthly basis (SIP) Systematic Investment planning ) Your fund should be quite safe. The indian economy looks good . Mutual funds like equity are good if you look from 3 to 5 yars perspective. No one can time the market.
daya asked, Sir, I am also want to know about Education policy or, child policy for 1 yr Kid. Kindly suggest that which policy is better for Us. There are many Company in market, which are the best for Middle class family. LIC or, Pvt. Companies like Tata , ICIC, Bajaj. etc.
Jigessh Patel answers, Even the Pvt Companies are safe like banks. You need to take time and study / compare plans. Charges /features / illustartions / brochures before buying any policies. Single pay Unit link policy with 5 times cover will give you max return. Even maturity will be tax free even though it is single pay .
SunilKumar asked, Sunil says, Sir, which policy is the best for my child. She is 5 years old. I am 38 years old and wife is 30 years. Please give me a reply
Jigessh Patel answers, You havent mentioned whether you are insured well first. Even in a Childs policy , Fathers insurance charge is deducted . when you take a Waiver benefit. HDFC Young Scholar plan is good. where the insurance is only taken of the parent.
amit74 asked, Dear Sir I have a term assurance of around 7 lacs and endowment policy of around 3 lacs. alongwith 3-4 lacs in ULIP . What should I go for now.
Jigessh Patel answers, Suggest to now buy ULIP plans ,to get a higher return / flexibilty and Life cover in min premium.
sid asked, Hi Jigessh.I prefer to take Term insurance rather savings related. But the cost of it pinches a bit. Is there any way, we can save on premium and have a insurance policy. Earlier LIC used to have a policy of such kind. but not any more.
Jigessh Patel answers, All insurance poilicies. Whether it is money back . Endowment or Whole like have a Built in Term policy packaged in it. Only that you cant easily see th eRisk premium expense. Term poilicy are good , depending on your requirement.
chetu asked, Sir, How is Jeevan Ananad policy of LIC ? my age is 45. Also is it worth opting for critical illness option
Jigessh Patel answers, Jeevan Anand is a Good Whole life plan . Only the returns expected are Max Rs 50 Bonus. Todays inflation is 6 to 7 % . Your capital is likely to erode if the returns are not more than inflation rate of our country.
anirban asked, sir i am a final year msc student of statistics & informatics of iit Kharagpur with 2 papers cleared from actuarial society of India.Can you tell me what are my job prospect as a fresher.
Jigessh Patel answers, Excelllent career. Great job opportunity in India. They are ver well paid as there is a lot of shortage of Actuaries
bnsrihari asked, Hi, Iam a 35 years married with a 2 yeras kid; i already have 2 LIC policies running for last 10 & 3 years respectively(both are endowment/cashback policies); now i need more cover for myself; can i opt for Term Policy with "Premium Pay-back option"(100% or 125% premium pay-back options) offered by Birla Sunlife / Kotak?? your comments pls...
Jigessh Patel answers, Birla Term plans are the cheapest over Sum Assured over Rs 25 lakhs ,Buy Pure Term policy and invest rest in Mutaul funds on SIP basis . This combination will get better returns on you investment in the long run.
bkjain asked, Is there any insurance policy which allows me to pay one time premium [returnable] say abt Rs.30000/- to Rs.50000/- and provide me maximum insurance cover for longer period
Jigessh Patel answers, Many pvt companies have a policy with Single premium ULIP plans with option for Rs 50,000 invetment and min 5 times life cover. The returns will then be tax free.
Manoranjan asked, Why we invest in insurance. Please give me reply.
Jigessh Patel answers, Mainly for Protection of Future income to our Family. which in turn will provide for our Dreams and commitments towards our family. its like a Security for our Family, incase of the bread earners unfortunate death. Also for Desciplined savings . Tax benefits while investing. Tax free Maturity returns. Better long term sytematic savings planning. Loan or Liability protection ETC
Subbarao asked, I want to know the importance of Medical Insurance
Jigessh Patel answers, Today untimely Hospital medical expenses can create a deep Hole in our Pocket .Mediclaim Insurance policy meant to reimburse Hospital Expenses. Today medical expenses are going up every year and its better to protect our family incase of big medical expenses.
prasanna asked, sir i have taken an unit linked policy from a leading pvt scetor company i am paying rs 50000 per annum as premium i have paid only one premium as of date .. I was shown an illustration in which surrender value after three years of full premium payment was 190000. After i received the policy docuemnt to my shock i noted that the charges decutible in first three years were close to Rs 40000. Is it possible to get such a high return .. on surrender of policy kindly advice
Jigessh Patel answers, i presume you bought a ULIP policy .You can get a refund within 15 days of receipt of Policy,You can immediately go to the Insurance company and give complain and policy back OR if 15 days are passed then you can go to the Ombudsan ( Insurance Redressal body ). They will help you get the refund.
yamuna asked, being a mother (1yr kid) i want to take insurance policy for my boy. Pls advice me which type of insurance is better to take. (for instance for his higher studies after 18 yrs)
Jigessh Patel answers, You can buy a ULIP plan with balance Equity option max upto 35 % . Go go Childrens plans where the Sum asured is mimum to save on charges. You need to compare plans, as most compay plans are simlar. you need to compare the charges and fornt end loadings mentioned in the Brochures of the plans ,as the his will affect the returns. ULIP plans have better investing and liquidity benefits. Also remember to take a premium Waiver benefit , Incase you take the plan in the childrens name.
Paresh asked, I am 56 and all my earlier policies are likely to be matured in a year or two.To cover my life which type of insurance will be advisable?
Jigessh Patel answers, Kotak insurance gives term Policies entry age till 60 . You can also buy ULIP plans with 5 yers paying period. your cover will be till age 70 to 75. depending on plan selected.
Jigessh Patel says, Thank you everybody, got to go. Chat with you next week. You can also email me on jigishpatel@rediffmail.com . I will try to answer all your questions.