The National Pension System (NPS) - Re-modified!!

A retirement plan available to the citizens of Indian starting from the year 2009, but I guess not many people have much knowledge about and how it helps in individual’s retirement planning.

Let see what this is all about!!!

What is the National Pension System?

The National Pension scheme is to promote income security at the time of retirement to citizens of India which earlier was not given much of importance. So, NPS a step forward by the Central Government is basically a voluntary contribution scheme introduced through Pension regulation authority named as Pension Fund Regulatory and Development Authority (PFRDA).

Health Insurance – should we have it or not??

We will be surprised to know that in India not more than 5% of the people have health insurance as per the sources, are rest are either unaware or not having any health insurance. The same justifies the unpopularity of the scheme. Now the question arises is what is a health insurance and should we have it or not?

Now, let’s understand what it is and why do we need it.

Surrender value calculation for Limited period premium payment in case of Term Insurance

Formula: Total premium paid (exclusive of service tax)* 70%*number of remaining complete month of cover/total policy term in months

Example: A Term Insurance policy is bought for 20 years term were the premium is paid for a limited period say, at 5 years Rs.2,00,000, and 10 years Rs. 1,00,000 of the term. If the policy is surrendered before the completion of 10 years the surrender value would be nil. But if the same is surrendered after the completion of 10 years the surrender value is as under:

Calculation: Rs.3,00,000 (Total premium paid Rs.2,00,000 + 1,00,000)*70%*50%(remaining term of the policy in percentage) = Rs.1,05,000

P.S: If the policy is surrendered within the premium payment period, no surrender value would be received.

Surrender value formula/calculation for Single premium payment in case of Pure Term Insurance

Formula: single premium (exclusive of service tax)* 70%(this percentage could vary from company to company)*number of remaining complete month of cover/Total policy term in months.

Example: A Term Insurance policy is bought for 20 years term with a single premium payment of Rs,2,00,000 and 10 years have already elapsed. Now if the policy is surrendered the the value would be:

Calculation: Rs.2,00,000*70%*50%(remaining term of the policy in percentage) = Rs.70,000

Term Life Insurance Features - Comparison

Downlaod online Pure Term Insuance comparision excel sheet of Indian Insurance companies.(LIC,TATA,Reliance,ICICI,SBI Life etc.....)

Life Protection/Pure Term Insurance is a product which gives us the ability to protect our family financially if we are not around. Life being very uncertain, a protection to our family is a must. Pure Term Insurance comes at a very affordable price which can be as low as 2500/- per annum. As the name suggest, value of the policy is only received in the event of the death of the policy holder. If the holder of the policy survives through the term of the policy, no benefit / compensation would be recovered.

     Few check points before buying a policy – 

Insurance and Types of Insurance

We earn, we save and we live our livelihood vis a vis we support our family including our parents, siblings, spouse and children. As we all know, life is very uncertain, and being one or may the only earning member of the family, it becomes utmost important that we save guard our family’s interest and its future spending, even when we are not around. 

Insurance is a product offered by banks, Insurance companies and other financial institutions in tie-ups which help us save guard our family interest and future spending. In other words we can also classify it as a risk hedging process for us not being around our family.