A Financial Tip

Tax Saving scheme: LIC Insurance Premium:

·         Traditional Life Insurance sell as Hot cakes in the Month of March every Year.

·         These policies yield 5% to 6% return only, assess whether you are willing to accept.

·         It is a multi year commitment made in haste without understanding its implications….avoid if possible.

·         When closed prematurely the policy holder takes a hit; buying them for the wrong reasons.

·         Avoid buying in a hurry; assess your need for LIC cover.

·         Asses your ability to service premium full term before deciding to invest.

·         Better to stay away from life insurance policies that combine triple benefits – life insurance, investment and savings.

·         Insurance policies worth buying may be pure protection plans --- these cover risk of death and have low premium.

·         In your haste to meet the dead line of tax savings, do not sign the dotted lines of forms presented by Insurance agents, because you may not know what boxes are ticked for you by the agent.

·         Insurance policies may have worked well for your parents but in this century such policies become milestones around the neck of the buyer. In the past century investment options were less.

·         Never buy policies from an agent who is your relative or friend, it is better to help such agents with cash than commit for 15- 20 years in the policy.

·         Avoid investment in policies offering twin benefits of insurance and investment.

·         Avoid guaranteed returns policies; it comes at a higher price; PPF or Voluntary PF may be a better option.

·         In Health Insurance policy below Rs. 5 lakh, the buyer is not put through a medical test; but has to submit a health declaration. For higher amount Medical check is required.

·         Finally: “Experts say that strictness of the claim procedures is inversely proportional to the leniency of the undertaking.”

Source: ET Wealth 13-3-2017