LIC's New Plan - JEEVAN VARSHA

Life Insurance Corporation of India (LIC) has launched a close ended guaranteed addition money back plan 'Jeevan Varsha' and expects healthy response.

“After the huge success of Jeevan Astha which closed recently, the corporation has launched another guaranteed product. This is a regular premium money back policy, having premium payment mode such as yearly, half-yearly, monthly.

The plan would be made available for sale only between 16 February and 31 March, 2009.

Jeevan varsha plan is available with two policy terms of 9 and 12 years. The policy will offer Rs65 per Rs1,000 sum assured and Rs70 for a 12 year term.

Any person who has completed 15 years of age can buy this policy. The maximum age at maturity will be 75 years. The plan has provisions for loan, surrender and revival.

LIC officials said, though guaranteed addition in Jeevan Varsha is lower than Jeevan Astha, the internal rate of return will be similar to it taking into consideration all factors.

For more details of the plan, pls contact VCare Financial Solutions 9869629086 or write to us on vcarefinsol@gmail.com

Importance of Insurance

Insurance is an important component of any sound financial plan. Different types of insurance protect you and your loved ones in different ways against the cost of accidents, illness, disability, and death. Insurance decisions you make should be based on your family, age, and economic situation. There are many forms of insurance and, unfortunately, no one-size-fits-all policy. In finance sector there are many companies provides you different types of life insurance services and plans among them some would be really provides you sufficient coverage against investment.

But why should you take up insurance and why should you spend money on buying the policy. It is certainly true but it is not for a life insurance is always used. It can be a operative source of investment, credit provider etc So the policy holders should make a proper decision about it. Apart from Tax benefits that it provides it also safeguards your loved ones in the event of any unforeseen happenings. No matter which type of policy you choose to take out, make sure to read the fine print before deciding on a policy or service. If you feel that some of the conditions can’t be suits, there is little point in having the policy, as the end result may be that your family will not receive any benefits upon your death. Make sure that you understand what is, and is not, covered by the policy.

As of today people are hell bent on getting themselves insured from some major reputed insurance company or the other. The LIC (Life insurance corporation) has the maximum amount of investors. Life insurance is universally acknowledged to be an institution, which eliminates 'risk', substituting certainty for uncertainty and comes to the timely aid of the family in the unfortunate event of death of the breadwinner.
By and large, life insurance is civilisation's partial solution to the problems caused by death. Life insurance, in short, is concerned with two hazards that stand across the life-path of every person:
1. That of dying prematurely leaving a dependent family to fend for itself.
2. That of living till old age without visible means of support.

Life Insurance Corporation (LIC) has different plans and services that are catering to a wide range of customers. All one has to do is to pay the required premium as per the service/plan. It could be yearly, half-yearly and even monthly. Getting yourself insured is extremely important. Whether there is a robbery or an uncanny mishap or about securing your financial future, if you are insured you remain safe.

For more information contact VCare Financial Solutions 9869629086 or write to us on vcarefinsol@gmail.com

Principal Emerging Bluechip Fund

Mutual Fund on Monday launched the Principal Emerging Bluechip Fund, an open ended equity scheme, which will predominantly invest in small and mid cap companies to tap high growth opportunities offered by such stocks.

The fund opens for subscription on September 22 and will close on October 20. This fund will be benchmarked to the CNX Midcap Index. The scheme will offer both growth option and dividend option. For the purpose of maintaining liquidity or tap market opportunities the fund’s portfolio may also include large cap stocks.

The subscription for the scheme shall be allowed during the NFO at Rs 10 per unit and thereafter at NAV based prices upon re-opening for subscription. There is no minimum redemption amount. The minimum application amount is Rs. 5,000.

There is an entry load of 2.25 per cent, if investment is less than Rs 5 crore. However, there is no entry load for investment of Rs 5 crores and above, as well as for direct investments. There is an exit load of 2.25 per cent if redeemed before one year from the date of allotment.

Asset allocation pattern is as follows:
equity & equity related instruments of mid cap companies 65 per cent - 95 per cent
equity & equity related instruments of small cap companies 5 per cent - 15 per cent
equity & equity related instruments of companies other than mid & small cap companies - 0 per cent-30 per cent.

The AMC reserves the right to invest in equity derivatives, not exceeding 50 per cent of the net assets and in foreign securities and derivatives subject to certain statutory regulations.

Said Rajat Jain, chief investment officer, Principal Mutual Fund, “For a long term investor, mid and small cap stocks are a good bet as they offer higher growth opportunity. Mid caps can be volatile; however volatility can be neutralised by a longer investment horizon without significantly impacting the return expectations. In the current scenario quality mid caps are available at reasonable valuations even after factoring in the current volatility in the business environment and we intend to capitalise on such opportunities through this fund.”

The fund will be managed by Pankaj Tibrewal.

Invest urgently, Contact VCare Financial Solutions - 9869629086 or write to us on vcarefinsol@gmail.com

Life Insurance - A Need

One of my good friend had a small argument with me, that she would not "invest" in Term Plan of Insurance, because she will not get any "returns" out of it. I believe "investing" in a term plan looked a very unprofitable thing to her as she never gets back the money she paid as "premiums" , if she survives.

With respect to Term insurance , she understood the fact that her family will get the money from insurance company in case of her death, but she was concentrating on the fact that she would not get back anything if she survives. What is the return in that case? Nothing !!! , and looked like some one is fooling you with a product called "Term Insurance" , where you are "investing" premiums to get nothing at the end.

Let me now tell why this happens and some give you some insight on this matter.

I have already talked earlier in my last post "Life Insurance and how to go about it" , about Term Insurance . Let me now take more deep dive into it and talk about the reasoning part.

I will first talk about fundamentals of Insurance and then talk about Endowment Policies and why are they popular, and what people don't realise about them. and how Term insurance is the right thing for most of the people.

Basics of Life Insurance

What happens in a average family : There is someone who earns and his family comprises of wife , kids , parents . if not all there is a subset of these family members. The head of the family earns and his family lives happily. All the expenses are met from the earnings of this main member , most of the time the husband. Now consider this person dies in an accident or for that matter because of any event. What happens? What happens to his family members other than the psychological trauma . If they don't have money to take care for them selves ,either some one from family have to take up the job and start working which may not be possible for them, or They have to decrease their standard of life to maintain the expenses . They are now totally unsecured from future's point of view. In short they are totally messed up , which should not have happened. I gave this detailed explanation for the circumstances because i wanted you to understand how bad can happen and proper measures must be taken care for this.

What is the Solution?

Adequate Coverage !!! , this cant be compromised... You must have a backup plan which can give your family the same kind of income which confirms that they are not short of money in case the main earner is gone. If there are some debts like Home Loan , or any other tasks which need money apart from regular income , the cover must be good enough to cover that too..

For example : Robert has a family expenses of 25,000 per month and there is a Home loan of Rs 25 lacs to be paid within 10 yrs. He is 27 yrs old. He has a wife , 2 kids and parents. All of them are dependent on him financially. He has investments of 5 lacs. Now in this case. In case he dies , who will take care of Home loan, how will provide them enough money to live life comfortably. They need 25k * 12 = 3 lacs per year. which they can get per month if they have 35-40 Lacs of money . If they put this in bank , they will get Rs 25,000 per month as interest which they can use. Considering inflation it will not be enough after some years , but lets leave it now for this example. Add home loan of 25 lacs to this 40 lacs and what we come to know is that this family must be covered with minimum Rs 65 lacs . Rs 75-80 Lacs is a decent cover for this family. Now if he takes a cover of 80 lacs for his family, from that day he can happily live all his life without any tension , thinking what will happen if he is not there. He will be attain peace of mind , and not be worried for it. He must get a lot of internal peace because his Family is protected with a good enough cover to take care for them . And this is what you get in "return" from Insurance. No monitory return can give you more satisfaction than peace of mind.

So before doing anything else , his first step is to give adequate cover to his family and that's the most important responsibility for him as a Husband , Father , Son . He must understand that this is not an investment for monitory benefit later in his life , but its for his family happiness and future.

One point to remember and not forget is that this is the minimum cover required for family and anything less than this will be taking risk with family future.

Term Insurance Policies
Lets discuss the features of Term Policies with respect to above example.

Cheap Premium : The premium is very low for Term insurance Policies. For above example . The yearly premium for Rs 75 lacs cover for 25 yrs is just Rs 20,000 yearly or just 1,600 per month !!! . This is in any way affordable for most of the people. Its providing the fundamental requirement of Good cover and low premium and if you think of returns , Good cover and low premium can themselves be seen as good enough return. You family protection at low cost is the return you get.

Opportunity to invest rest of the money in High return Investments :
With term Insurance you save a lot of money in premium and now you can invest this money as per your wish in high return instruments , anyways in Endowment policies you put money for long term and you get it after so long time. So you can now always put your saved money in things which are long term investment products and return great returns.

One of those things is Equity Diversified Mutual funds and Direct Equity (depending on persons ability and interest). In long term Equity Diversified gives fabulous returns (15-20 yrs) and the risk is minimised because of long term. And if you consider India growth story , it looks great in long term , hence Equities for long term is the most obvious choice . They will give you return of 15%+ CAGR. (15-20 yrs)

Also it will be flexible , you can not invest for a year or two , if you want to use the money for your family vacation or some important event.

Conclusion :
Insurance is not an investment product , its a Protection instrument for your Family or any one your want to cover. There are other products for your investments .

Let your finances be the way you want your life to be , SIMPLE !!!
Don't mix Insurance and Investments.

Contact VCare Financial Solutions : 9869629086

IDFC launced Strategic Sector (50-50) Equity Fund

IDFC Mutual Fund has launched an open-ended scheme - IDFC Strategic Sector (50-50) Equity Fund.

The fund will invest up to 50 per cent of its assets in a chosen sector that is positioned for high returns, while the balance amount may be invested in companies across market capitalisations and across sectors, a news release from the company said. This scheme may also invest in debt and money market instruments. This fund will be benchmarked against the Nifty.

If you analyse the market data over the years, you will note that there has been one sector that has predominantly outperformed the market. The Strategic Sector (50-50) Equity Fund is an innovative product that aims to generate long-term capital appreciation by investing in spotting the leading sectors for each year.

IDFC mutual fund which recently took over Standard Chartered Mutual Fund has decided to launch a scheme based on this called IDFC Strategic Sector (50-50) Equity Fund.

The said equity fund, would invest 50% in one sector while the remaining funds will be pumped-in a diversified portfolio.

IDFC Mutual Fund Investment Head Rajiv Anand said, every year the sector that performs is different and the fund managers of the scheme will try to identify which sector is likely to dominate in that year and will invest in them.

Meanwhile, a study done by Citigroup found that gains made by individual sectors were far greater than the capital market.

“In 2001, it was the auto sector that scored highest gains and outsmarted the Nifty index for that year. In 2002, it was energy sector, in 2003, it was metal and in 2004, it was real estate.
Incidentally, the outperformance has almost always been by a wide margin,” Citigroup added.

Anand said as per the Citigroup study, the gains made by even the second and third best performing sectors also were way ahead of gains made by the Nifty.

The wide-based Nifty index went up by 55% during 2007 while metal sector shares went up by a whopping 193% in the same year. In 2005, Nifty was up by 36% while real estate shares were up by 289%.

Fund category :Equity - Diversified

Scheme plan :Growth, Dividend

Scheme type :Open Ended

Launch date :August 28, 2008

Fund closes : Sept 18, 2008

Fund manager :Mr. Kenneth Andrade

Initial Price :Rs 10/-

Min investment :Rs 5,000/-

Entry load :2.25 %

The scheme will charge an entry load of 2.25 per cent in case of investments of less than Rs 5 crore, while there is no entry load for investments of Rs 5 crore and more.

So, take the opportunity & start your investments in IDFC Strategic Sector (50-50) Equity Fund.

Contact VCare Financial Solutions on 9869629086 / 24371526 or write to us on vcarefinsol@gmail.com

ICICI Dynamic Fund - Dividend declared - 20%

Dear All,
ICICI Dynamic Fund has declared 20% dividend. Record date is 22nd August 2008. Dividend Yield - 10.79
So hurry up invest urgently.
Contact VCare Financial Solutions - 9869629086 or write to us on vcarefinsol@gmail.com

Fixed Maturity Plan

Fixed maturity plans (FMP) are closed-end debt funds that aim at generating returns that are indicated at the time of launching the scheme. Mutual funds are not allowed to launch assured return schemes. FMPs, therefore, only indicate the likely returns. FMPs can generate predefined returns because of the way their portfolio is constructed. They invest in debt securities which mature around the tenor of the fund. Since the instruments are held to maturity, there is no risk of the value of the security being affected by interest rate movements and fund managers are able to give returns indicated at the time of investing.

FMPs come with various maturities. The popular tenors are of one month, three months and a little over a year. As closed-end funds, FMPs cannot accept any fresh investment once the NFO is over. To help investors deploy their available funds and reinvest money from maturing FMPs, mutual fund houses launch a continuous series of FMPs. The NFO is generally open for two to three days and the minimum investment is usually kept at Rs 5,000. Since investors cannot withdraw their money till the maturity of the scheme, they need to choose a fund with a tenor that matches their investment horizon.

Expense ratio. This varies from 0.25 to 1 per cent for FMPs. The prevalent yield minus the expense ratio can be considered as an indicative return from the FMP. The expense ratio is mentioned in the offer document.

Why FMP?
FMPs are similar to bank fixed deposits (FD) in features such as fixed tenor and indicative return. But they do not guarantee returns like FDs do. So, why should an investor choose an FMP over an FD? The answer lies in the tax efficiency that FMPs bring to their returns.

The example given in the table shows that while FMP attracts the dividend distribution tax (DDT), FD is subject to income tax. Since DDT is lower than the income tax rate, FMP gives a higher post-tax return than FD.

FMPs with maturities of greater than one year provide capital gains efficiency by structuring the tenor in such a way that investors benefit from double indexation. For example, by holding the FMP launched on 30 March 2008 for a little more than a year (370 days) till it matures on 4 April 2009, an investor gets to use the cost of inflation index applicable for the years 2007-2008 (year of purchase) and 2009-2010 (year of redemption). The tenor of the fund and the date on which it is launched allows double indexation, thus reducing the capital gains tax applicable on the returns.

FMPs suit investors who have a fixed investment horizon and would like to know the likely returns. The tax advantages make them superior to FDs. The only caveat is that investors need to evaluate the credit risk involved in the securities that the FMP is likely to invest in.






1 Dividend distribution tax
2 Assuming the FMP distributed the entire Rs 350 as dividend

Source : Outlook money