Prajna Capital - An Investment Guide

Rights of a consumer   Just like any other policy, a medical insurance plan is a plan which is a mutual contract between a buyer that is you and the insurer. It is imperative to understand all the terms mentioned in the document.   A contract issued for an insurer is a contract made in good belief; however, if one is not willing or fails to disclose any requirement asked by the insurer, then the policy is liable to go in vain.   For instance, many agents or brokers would ask you questions such as the condition of your present health, pre-health conditions and so on. However, if you suffer from any kind of kidney problem and you have not disclosed this to your insurer, then your insurer would certainly not take into account any costs that you ask for treatment of your kidneys. One must judiciously read all the exclusion and valid expenses compensated prior to the course of treatment in their health insurance plan.   In cases, where your claim is not being accepted or is incre...

  Stay invested for the long-term to reap the rewards This is largely a mid-cap oriented fund, though currently half its portfolio of 54 stocks are large-cap stocks. The fund grabbed attention in 2009 by out performing the category by 30 percent, delivering 112 per cent returns. Says Sankaran Naren, CIO—equity, ICICI Prudential Mutual Fund; "The fund benefited from allocation to pharma, but what propelled the out performance was the high exposure to mid- and small-cap stocks."   The fund has been a patchy performer since inception and has had some great runs as well. For instance it had a good run between 2003 and 2005. But by end 2006, the fund tanked, when it had less than 5 per cent exposure to large-cap stocks, at a time when large-caps were rising. Again, it failed in 2007 when its sector bets failed. The fund was holding 20 per cent in FMCG and healthcare while it remained underweight in metals and energy sectors, in which the respective indices delivered 121 per...

The most frequently asked question is to do with House Rent Allowance (HRA). Typically, the employee receives a certain amount of HRA. He either already owns a flat or is about to buy one. Consequently, he is concerned that on account of the ownership flat, he may lose the HRA deduction. Or, the other way around — since he is receiving HRA, the concern is that he may not be eligible for home loan deductions. This week, let us find out whether these fears are justified — however, for that we need to first understand how HRA actually works. HRA is basically an allowance. It forms a part of your taxable salary. It is not mandatory for the employer to give you HRA, it depends upon company policy. If your employer does provide HRA, you will receive it no matter whether you own a house, don't own a house, pay EMI, don't pay EMI, whether you pay rent or live with your parents or whatever. In other words, HRA, like your Basic Salary, is received every month, regardless of your pers...

AS PER the proposal in the Union Budget last year, investment up to . 20,000 in infrastructure bonds is eligible for tax exemption under Section 80CCF .   Individuals can now invest up to 20,000 in these bonds in addition to the 1 lakh limit available under Section 80C, 80CCC and Section 80CCD. Earlier this financial year, IDFC, L&T Finance came out with public issues while IFCI issued these bonds on a private placement basis. Now, IDFC has decided to offer the second tranche of these bonds to the public. In the first tranche, the company has already raised 471 crore in November 2010. The Product: The bonds offer two investment options. The face value of each bond is . 5,000 and one can apply for a minimum of two bonds. The bonds have a tenor of 10 years and a lock-in period of five years. At the end of five years, you can sell on the stock exchanges, or you can buy them back. While Series 1 carries an 8% coupon, payable annually, Series 2, is a cumulative option where 8% will...

DSP BlackRock Mutual Fund has announced the launch of DSP BlackRock FMP- 12M- Series 13. The New Fund Offer (NFO) will be open for subscription from February 2, 2011 to February 3, 2011. The minimum investment in the scheme would be Rs 10,000 and in multiples of Rs 10 thereafter. It would offer Growth and Dividend Options.

DSP BlackRock Mutual Fund has announced the launch of DSP BlackRock FMP- 3M- Series 29, a close ended income scheme with a maturity profile of 3 months from the date of allotment. The fund will be open for subscription from February 2, 2011 to February 3, 2011 .The minimum investment in the scheme would be Rs 10,000 and in multiples of Rs 10 thereafter. It would offer Growth and Dividend Options.   The scheme will be listed on NSE.

Thanks to the Insurance Regulatory and Development Authority ( Irda ), customers now know the various charges insurers levy on unit-linked insurance products ( Ulips ). Irda had tightened Ulip norms in September this year. Yet, most people investing in are unaware how the total charges add up. Premium Allocation Charge ( PAC ) is a common charge that buyers look out for. They would easily fall for products which do not have any premium allocation charge. Yet, an insurance company will compensate its absence by levying a Policy Administration Charge . As a rule, policy administrative fee is a fixed sum like Rs 40 per month. As the name suggests, it should be charged on the expenses incurred to service a policy and should, consequently, not have anything to do with the amount of premium paid. Yet, some insurers link it to the premium paid. Some link it to the first annual premium, if the premium varies each year. Now, there are two problems. Take this example. If the annual premium...