Managing Your Health Insurance Premium Costs

February 23, 2014 1 Comment


wealthymattersA more equitable health insurance market is leading to a heavier burden on younger ,healthier policyholders.Many health insurance policyholders have seen their premiums go up 15-35% in this financial year, as insurance companies, including public sector firms, revise their premium rates.

The new health insurance regulations implemented by the IRDA in October last year,including the abolition of claim-based loading and the introduction of the lifelong renewability clause,are some of the main reasons why premiums have risen sharply.The first refers to the practice of increasing subsequent premiums for those who make claims. The lifelong renewability clause  is to ensure that older people with health issues  continue have access to health insurance.Apart from this, the new health insurance guidelines also allow insurance companies to raise premiums only when a policyholder moves to a new age band. Moving away from claim-based loading and mandating lifelong renewability means that younger people pay more. There is some cross-subsidisation otherwise it becomes impossible for senior citizens to afford health insurance.Most claims come in the age group above 60 years but companies cannot load premium beyond a point for this age group. Read more of this post

Filed under Paper Assets, Tool Kit Tagged with , , , , , , , , , , ,

Thumb Rules For Cement Stocks

February 14, 2014 Leave a comment


wealthymatters

The growth in cement demand is usually 1.28 times the GDP growth rate in India.

ACCs average EBIDTA/tonne is Rs 727

Filed under Paper Assets Tagged with ,

Gift Deed Or Relinquishment Deed?

February 5, 2014 2 Comments


wealthymattersWhen it comes to transferring property, a sales deed may not always fit the bill, especially if you want to pass it on to relatives. In such cases, instruments like a gift deed or relinquishment deed can come to your rescue. However, blindly choosing either can lead to problems.You must understand the purpose of each document before getting it drafted. Know the benefits as well as drawbacks of each.

Gift deed

This document allows you to gift your assets or transfer ownership without any exchange of money. To gift immovable property, you just have to draft the document on a stamp paper, have it attested by two witnesses and register it. Registering a gift deed with the sub-registrar of assurances is mandatory as per Section 17 of the Registration Act, 1908, failing which the transfer will be invalid. Besides, such a transfer is irrevocable. Once the property is gifted, it belongs to the beneficiary and you cannot reverse the transfer or even ask for monetary compensation.

However, if you want to gift movable property like jewellery, registration is not compulsory. At the same time, a mere entry in an account book is not sufficient to establish a transfer. Apart from physically handing over the property, you need to back it with a gift deed. The process is slightly different if you are gifting company shares. You have to fill out the share transfer form and submit it to the company or registrar, and the transfer agent of the firm. Once again, get a gift deed drawn and executed to complete the transfer, but the document need not be registered. Read more of this post

Filed under Alternative Assets, Paper Assets, Precious Metals, Theory, Tool Kit Tagged with , , , , , , , , , , , ,

The Privileges Of PE Investors

January 19, 2014 2 Comments


wealthymattersImagine an initial public offering of shares from company,promising an average 15% return after five years of listing if the market returns are not higher. The question that will arise is whether it is an equity issue or a bond issue. By any definition it could be inferred as a sale of fixed income security and not equity.

It is investment into securities with such properties that has been happening for years and masquerading as private equity. Last week the Reserve Bank of India yielded to the long pending demands of the foreign private equity investors that the central bank legitimize put and call options in an equity investment contract. But the industry is still unhappy.

The issue is that such derivative contracts are legal so long as there is no assured return. Private equity investors say that this puts them at a disadvantage. But isn’t every equity investor at the same disadvantage? Is it not risk taking that gives such out sized returns? Equity investments are the riskiest form of investment and one could lose to the last paisa. But there is also an opportunity to earn many times the principal investment. This is one reason why the Securities & Exchange Board of India insists on the disclaimer ‘equity investments are subject to market risk’ on any public communication about an IPO or a mutual fund scheme. If this is the kind of risk that the less financially literate take in equity investment, then private equity investors are indeed a privileged lot with the assurances of  the mandatory return clause.This is a way of guaranteeing risk free high returns. Read more of this post

Filed under Alternative Assets, Paper Assets, Theory Tagged with , , , , , ,

FundsIndia.com Review

January 1, 2014 2 Comments


wealthymatters

I came across FundsIndia a couple of months ago,via their extensive ads on Indian financial blogs.A bit of asking and I found out that they were mutual fund distributors.At the time I was like ho-hum,they are another of the lakhs of mutual fund distributors/agents around,perhaps a bit bigger than many others but probably no worse and maybe even better than many.

Personally I am bargain-minded ,so spartan servicing works for me.Also I tend to invest for the long term and small amounts compounded over the long term cause sizable differences in returns ;so I am fanatic about expenses.So direct investments in mutual funds are my thing-Link.So I knew I was never going to use their services to buy mutual funds.But I considered them as perhaps being useful for people who like to indulge in full service and are willing to pay for it.I even considered carrying their ad on wealthymatters. Read more of this post

Filed under Paper Assets Tagged with , , , ,

← Older posts

Newer posts →