Skip to main content

Choose the insurance you want on need basis

Tax Saving Mutual Funds Online

Current open Infra Bond Application form

 Buying a car? Your dealer will choose your auto insurer. Going on a holiday? The price includes the cost of travel insurance. For several years now, Indians have been sold insurance bundled with other products or services. Even home loan customers are sometimes forced to take a loan protection term cover. But the insurance regulator is not happy with this combo selling. In a discussion paper released this month, the Insurance Regulatory and Development Authority (Irda) has expressed concerns that this bundling forces consumers to buy products they don't want and allows dealers to push policies that earn them better commissions even though they might not suit the buyer.


   The lack of transparency in such products has got Irda worried about these policies. When the insurance cover is clubbed with another good or service, the buyer doesn't get to know how much he has paid for the insurance. Be it the charges of the cover or the features of the policy, it is difficult for a buyer to know if he's getting his money's worth. Car insurance that comes with a new car. "Many dealers offer the first year's insurance for free or for just one rupee. But this is not true and the cost of the insurance is actually built into the car price. So, you don't know if you are paying the correct price," he says.

Does the customer know?

The transparency of charges is not the only thing that has Irda frowning over these bundled covers. The regulator is also concerned that when one cover is bundled with another good or service, people may not understand the policy that they have bought.


   Take the health covers that come bundled with credit cards. Though people think that they are covered for hospitalisation, most such covers are only protection against loss of income due to hospitalisation. So while you would pay almost as much as any proper health cover, you get only a fraction of the protection

Forced selling

Forced selling is another concern raised by the insurance regulator. When a dealer has an upper hand in providing you a particular good or service, he can also force you to buy insurance from a certain company. This is particularly true of tour operators who bundle travel insurance in the total cost of the package. With a bundled cover, there is no opportunity to compare a policy with other options available in the market. So, you do not get a chance to select the best insurance offer. Nobody has the right to force customers to buy certain plans.

Confusing the buyer

The practice of highlighting the insurance cover to sell other products has also come under the scanner. Some mutual funds are offering life insurance if you continue your SIPs in select funds for the agreed tenure. However, Irda is not happy that the fund houses are putting too much stress on the insurance component. Insurance is only a fringe benefit while the core product is the SIP in the mutual fund. By harping too much on life insurance, they will confuse the investor and make it difficult for him to differentiate between the core and the incidental product.


   Bundled policies are also not good for the insurance industry. When there is a distribution nexus between the insurance companies and dealers, the company may agree to accept all damage claims. So while the dealer benefits with car repairs, the insurance company would actually bleed. The industry is already bleeding and I don't see why they would want to continue with such practices. Maybe this is why the regulator is looking to curb these policies.


   However, not all bundled covers are unsuitable, and hence it would not be advisable to completely abolish such plans. "Some bundled covers like term plans with critical illness covers or travel insurance with tickets are quite good. So, Irda must segregate the good from the bad and come up with more stringent regulations. These insurance covers are not bad per se. Irda is only concerned about the way they are distributed.


   Irda needs to ensure two basic things. The first is transparency in these covers. Secondly, it should not be mandatory to purchase these covers. The regulator has asked for comments on the discussion paper till 15 March before it takes a final decision on the matter.

 
 
---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

 

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

 

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

 

These Application Forms can be used for buying regular mutual funds also

 

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. HDFC TaxSaver
  2. ICICI Prudential Tax Plan
  3. DSP BlackRock Tax Saver Fund
  4. Birla Sun Life Tax Relief '96
  5. Reliance Tax Saver (ELSS) Fund
  6. IDFC Tax Advantage (ELSS) Fund
  7. SBI Magnum Tax Gain Scheme 1993
  8. Sundaram Tax Saver

Popular posts from this blog

Tata Mutual Fund

Being a part of the Tata group, the fund has the backing of a very trusted brand name with strong retail connect. While the current CEO has done an excellent job in leveraging the Tata brand name to AMC's advantage, it is ironic that this was just not capitalised on at the start. Incorporated in 1995, Tata Mutual Fund remained an 'also-ran' fund house for around eight years. Till March 2003, it had a little over Rs 1,000 crore in assets and 19 AMCs were ahead of it. But soon after that the equation changed. It was the fastest growing fund house in 2004 and 2005. During these two years, it aggressively launched six equity funds, two debt funds and one MIP. The fund house as of now stands at No. 8 in terms of asset size. This fund house has a lot to offer by way of choice. And, it also has a number of well performing schemes. Tata Pure Equity, Tata Equity PE and Tata Infrastructure are all good funds. It also has quite a few good debt funds. The funds of Tata AMC are known to...
Read more

UTI Mutual Fund

Even though only a few of UTI’s funds are great performers, this public sector fund house has many advantages that its rivals do not. It has a huge base of retail equity investors and a vast distribution network. As a business, it looks stronger than ever, especially in the aftermath of credit crunch. UTI is, by a large margin, the most profitable fund company in the country. This is not surprising, since managing equity funds is more profitable than debt. Its conservative approach and stable parentage is likely to make it look more attractive to investors in times to come. UTI’s big problem is the dragging performance that many of its equity funds suffer from. In recent times, the management has made a concerted effort to improve performance. However, these moves have coincided with a disastrous phase in the stock markets and that has made it impossible to judge whether the overhaul will eventually be a success. UTI’s top performers are a few index funds, some hybrid funds and its inf...
Read more

Salary planning Article

1. The salary (basic + DA) should be low. The rest should come by way of such allowances on which the employer pays FBT and you don't pay any tax thereon. 2. Interest paid on housing loan is deductible u/s 24 up to Rs 1.5 lakh (Rs 150,000) on self-occupied property and without any limit on a commercial or rented house. 3. The repayment of housing loan from specified sources is also deductible irrespective of whether the house is self-occupied or given on rent within the overall ceiling of Rs 1 lakh of Sec. 80C. 4. Where the accommodation provided to the employee is taken on lease by the employer, the perk value is the actual amount of lease rental or 20 per cent of the salary, whichever is lower. Understandably, if the house belongs to a family member who is at a low or nil tax zone the family benefits. Yes, the maximum benefit accrues when the rent is over 20 per cent of the salary. 5. A chauffeur driven motor car provided by the employer has no perk value. True, the company would...
Read more

8 Investing Strategy

The stock market ‘meltdown’ witnessed since the start of 2005 (notwithstanding the recent marginal recovery) has once again brought to the forefront an inherent weakness existent in our markets. This is the fact that FIIs, indisputably and almost entirely, dominate the Indian stock market sentiments and consequently the market movements. In this article, we make an attempt to list down a few points that would aid an investor in mitigating the risks and curtailing the losses during times of volatility as large investors (read FIIs) enter and exit stocks. Read on Manage greed/fear: This is an important point, which every investor must keep in mind owing to its great influencing ability in equity investment decisions. This point simply means that in a bull run - control the greed factor, which could entice you, the investor, to compromise with your investment principles. By this we mean that while an investor could get lured into investing in penny and small-cap stocks owing to their eye-...
Read more

Debt Funds - Check The Expiry Date

This time we give you an insight into something that most debt fund investors would be unaware of, the Average Portfolio Maturity. As we all know, debt funds invest in bonds and securities. These instruments mature over a certain period of time, which is called maturity. The maturity is the length of time till the principal amount is returned to the security-holder or bond-holder. A debt fund invests in a number of such instruments and each of these instruments would be having different maturity times. Hence, the fund calculates a weighted average maturity, which would give a fair idea of the fund's maturity period. For example, if a fund owns three bonds of 2-year (Rs 30,000), 3-year (Rs 10,000) and 5-year (Rs 20,000) maturities, its weighted average maturity would be 3.17 years. What is the big deal about average maturity then, you may ask. Well, knowing a fund's average maturity is important because it tells you how sensitive a fund is to the change in interest rates. It is ...
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now