“Someday” Is code for “Never”

I got an interesting question in my mail box – “Can you please coach me on How can I overcome my casual approach towards my finances and live a good financial life?” 

The thing is that deep down we already know how to live a good financial life; the issue is that we are somewhere unwilling to take the required actions. Personal finance is not a rocket science; it simply has some hand full of things that you need to do. It is not about “How to” live a good financial life; it is a matter of choosing wisely and to make commitments to the actions that are required.

Delay in personal finance decisions

Someday I am going to sit with my advisor and sort out my finances,

Someday I will go for financial planning,

Someday I will do something with the idle cash that I have

Someday I will alter my investment style

Someday I will buy a term plan

Someday I will increase my investments

Someday I am going to buy my own house

Someday I am going to complete all my pending actions

Someday I will read all the nice articles that are starred in my inbox

Someday I am going to read entire article archive of Manish

And Someday I am going to organize my finances?

Give me two days and I will show you what I can do with my finances. This Someday syndrome always keeps you away from wealth creation in life. I re-collect a line from a famous movie Day and Knight “Someday. That’s a dangerous word. It’s really just a code for never” .

The code to your financial success is in your hands. Today you can choose to bring a dramatic change in the way you live your financial life. What you choose today determines the quality of your financial future. The “Someday investor” is all about hoping, wishing, desiring and wanting things to happen in his/her financial life. The truth is this really does not serve you in your financial life.

Once an old Cherokee is teaching his grandson about life –

A fight is going on inside me, he said to the boy. It is a terrible fight and it is between two wolves. One is evil – he is anger, envy, sorrow, regret, greed, arrogance, self-pity, guilt, resentment, inferiority, lies, false pride, superiority, and ego. The other is good – he is joy, peace, love, hope, serenity, humility, kindness, benevolence, empathy, generosity, truth, compassion, and faith.

This same fight is going on inside you – and inside every other person, too. The grandson thought about it for a minute and then asked his grandfather, which wolf will win? The old Cherokee simply replied, the one you feed.

What are you feeding your financial life? – “specific actions or someday actions”. Specific is being committed, someday is being casual. When you make a choice to be in action you gain leverage over other investors. The more specific you are in defining your actions the better your financial life gets. Keep feeding your commitments. Keep choosing. Keep taking actions. This blog is your sacred space, it is for you to add different dimensions to your financial life, if some conversations trigger new thoughts or actions than allow that action to happen and don’t forget to share your actions with us. Leave your questions in comments section and we will try to incorporate them in future articles.

Lastly 2011 is about to close its doors, why don’t we take this opportunity to lock our “someday” behind the doors of 2011 and step forward with commitment in our hearts. Wish you all a very prosperous 2012.

This post was written by Nandish and this post was taken from our finacial coaching blog where we keep on writing these kind of coaching conversations from time to time.

Different Kind of Loans In India against securities

What are the different types of loans you can take in India ? Do you always think about Personal loan when you want a loan? A lot of people despite having different kind of assets go for personal loan even if they have other options where they can mortgage an existing asset and take a loan at lower interest rate. In this article I will give you 5 alternatives to personal loans and tell you a little bit about each.

Personal Loan

Before we move forward let us understand a basic rule of lending. There are two kind of loans , Secured Loan and Unsecured Loan. Secured loan is a loan where a lender has access to some kind of asset so that incase you run away, he can liquidate the asset and take his full or partial money back, as there is a sense of security in secured loans, you have to pay a lower rate of interest on these loans. However an Unsecured loan is a loan where the lender has no access to any asset and incase you run away, bank has no way to get back that loan , that’s the reason you have to pay very high interest rates on these loans, Personal loan and credit card are examples of these loans. The biggest reason why someone should go for these alternative loans is that the processing of these loans are much faster and better interest rates compared to a personal loan. So now lets see some alternatives to personal loan incase you posses an asset.

1. Loan against Gold

Lets me start with the best option to take a secured loan in India. You can pledge your Gold jewellery and take a loan from Banks and companies like Muthoot Finance or Mannapuram Gold. The best thing about gold loan is that the processing is extremely fast (from few hours to 2-3 days) depending on your case. The way it works in Gold loan is like this – The higher the margin of safety you leave , the lower the interest rate. Here is an example , if you have gold worth Rs 10 lacs and you are ready to pledge it for a loan of just 5 lacs, then you are leaving a comfortable margin of Rs 5 lacs for Bank (incase you run away or gold prices decline) . So in this case you will get a very good interest rate offer , but if you take a loan which is 80% or 90% of the worth , then you will be asked for a very high interest rate. Generally the interest rate asked is between 12% – 15% .

There are no pre-processing charges or too much documentation involved in gold loan, in most of the cases the only thing required is your address and id proof. that’s all and you can get a loan within 24 hours easily .

2. Loan against your Insurance Policies (LIC/SBI)

Lets talk about LIC policies here. You can also get a loan on your LIC policy incase its eligible for loan (most of them are) . But to get loan on your LIC policy, it should have a SURRENDER VALUE, which happens only after payment of 3 yearly premiums. Only after that you can avail for a loan which would be around 90% of Surrender Value. Lets see an example – Ajay has a LIC endowment policy which has a yearly premium of Rs 50,000 . He has paid 10 years premium (total 5 lac) , the surrender value of his LIC policy is around 3 lacs at the moment. So he can get a loan of around 2.7 lacs.

One can take a loan either from LIC itself (recommended) or from banks, for which they will have to pledge their LIC policy totally to them. So incase they are not able to pay the loan, their LIC policy will be surrendered and company will take their money back. The best part of these loans is that you get it only at an interest rate of 9-10%. So if you have a LIC policy and it has a respectable Surrender Value , then you can take Loan against these policies and not take personal loan which has hefty interest rates. Check the loan amount available on your LIC policy by just sending this SMSASKLIC YOUR-POLICY-NUMBER LOAN to 56677

3. Loan against Fixed deposits

Incase you have a Fixed Deposit for long-term and would not like to break it in times of emergency, you always have an option to take a loan against that Fixed Deposit. The interest rate you will have to pay on that loan should be 1-2% higher than the interest rate earned on the FD and the loan amount available to you would be around 75% – 80% of the FD current Worth. For an example – suppose you have a FD which has its current worth at 10 lacs and you are earning 10% on that FD , then you can get around 8 lacs of loan at 12% interest rate . This is one good option incase you do not want to break the FD and also want to take a loan.

4. Loan against Property

You can also take loan against your property (Residential and Commercial) . Banks give loan upto 50% of market value of the property or 30-40 times your monthly income . The interest rate charges is in range of 13-16% depending on how big the loan is and how much margin you can leave. Loan against property is generally recommended for those who want a big amount as loan for purposes like expansion of business, wedding or some big-ticket expenses. Incase you need just 2-3 lacs of loan then it’s not recommended.

There can be processing and prepayment charges in these loan against properties (LAP) . A good place to compare the loans against property is policybazaar page . Public sectors banks like Bank of Baroda, SBI banks are known to not charge the prepayment penalties and have lower processing charges . All the loans against property comes at FIXED interest rates.

5. Loan against Other investments

Shares and Mutual Funds – There are loans offered against Mutual Funds and Shares , but there is a list of approved Funds and Shares which can get loan, also as the values of shares and mutual funds are highly volatile, there is high level of margin required on it , Means that if you have shares worth Rs 10 lacs , the amount of loan you can get is much lower than 10 lacs.

Public Provident Fund – You can get loan on your PPF account also , but there are some restrictions , you can only get loan from the 3rd year to the 6th year and the amount of loan will be only 25% of the balance in the account 2 yrs back . For example – If you want to take the loan in 5th year after opening your PPF account , then you will only get loan of 25% of the balance in 3rd year , if the balance was just Rs 2,00,00 in 3rd year, then you can only take loan of Rs 50,000 .

So I hope you have got a clear understanding of what options do you have incase you want to take loan against your assets. Note that the lower interest rates are one of the reasons why you should go for these alternative loans, but the bigger reason can be fast processing of these loans in case of emergencies.

Online transfer to your Public Provident Fund (PPF) account

Do you want to invest in your Public Provident Fund (PPF) account online without going to the bank physically? If YES, then there is a good news for you. You can transfer money to your Public Provident Fund Online netbanking. Whatever we are going to talk in this article is applicable to Public Provident fund in State bank of India. If you have a PPF account in post office of other banks , then first you will have to transfer your PPF account to SBI and then you can add your PPF account to your bank account as beneficiary and then transfer the money to PPF account anytime with a click ! .

Please note that this online transfer is possible only if the PPF account is at SBI , if it is opened at Post Office , then it would not be possible, because only SBI is authorised to get online payments for PPF.  Many people have their PPF , spouse PPF and children PPF account, they can add any number of PPF accounts for online payment.

Steps for Online Transfer in PPF account

Step 1 : Add Public Provident Fund account as Beneficiary Account

The first step is to add your PPF account to your Bank account as third-party so that you can do a money transfer to them. I am using ICICI account screenshots, but all the steps must be same for other banks also.

Public Provident Fund Online

Step 2 : Choose the SBI branch Address

Next step is to choose the exact location of the BANK where the account was open . Note that if you opened a PPF account at a SBI branch where netbanking is not available , it will not be listed.

Public Provident Fund Online

The best thing about have the bank account and PPF account linked is that you can also view the PPF details and balance at a single place .

Step 3 : Add your PPF account as the Payee Account number

The last step is to add your PPF account as the Payee Account number and then click on the confirmation link . In ICICI you will first get an activation code which you will have to put to activate the account for first time .

Public Provident Fund Online
Once you have completed these 3 steps you can see your PPF account as the 3rd party account where you can transfer the money just like you send it to any account.

Steps for State Bank of India (SBI)

Option 1 : If your PPF account and Bank account is at same branch

Incase you have your PPF account and SBI bank at the same branch, then you can see your PPF account already linked with your Bank account and you can transfer the money. Prasoon shares his personal experience

I already had an account in SBI, New Delhi. I went to SBI, Hyderabad for opening a PPF account. They asked for existing SBI account number, which I provided. Also, I submitted PAN card and Bank statement copy as proof documents. It took some 15-20 minutes to get a PPF passbook.

Now a pleasant surprise –

When I came back home and logged with my saving account user ID, I was able to see my PPF account under account section. I was able to see transaction I have done till then.

Also, there is no need to add PPF account as Third Party in this case. As the PPF account appears as separate account, I can transfer amount using fund transfer (not third-party transfer). Good thing is that, this transaction is real-time and the PPF account gets updated at the same time. Also, I am able to download statements, just like with normal account.

If you are not able to see the PPF account as “linked account” , then call customer care and ask them to activate it, if that does not work , then try to add your PPF account as the beneficiary account like I explained above . If even that does not work then try to go to your branch and then ask them to link the account to your bank account.

Option 2 : If your PPF account and Bank account are NOT at same branch

If your SBI Bank account and PPF account are not in same branch/city , then as the first step you can try to add your PPF account to your Bank account as third-party to do a money transfer. If that does not work then you can go to your Branch and ask them to link your PPF account to your bank account . Mostly this should work.

Netbanking works with all the Banks

As of now we know that this online transfer is working with ICICI , SBI , IDBI , Bank Of Baroda , IDBI bak, Union Bank of India . So with this information we can conclude that any bank which supports NEFT transaction can be used to transfer the money to SBI PPF account, by adding it as third party beneficiary. Let us know if this works for you.

But your Public Provident Fund account is not in SBI ?

Incase your PPF account is with Post Office or a non-SBI bank ,then may be its a great time to transfer your PPF account to SBI account ,all you need to do is submit a form for transfer of your PPF account. It will be one time task , so do it .

How to claim tax benefits

If you transfer the money to your PPF account online then you can do two things . First is to get your PPF passbook updated at your branch about the money transfer , you will get the PPF passbook updated and show it as your proof for claiming tax benefits. The other thing you can do is take the print out of your bank statement which will show the credit of the money to your PPF account. I am not sure but may be this is possible with SBI bank only . You can use this statement as proof to claim tax benefit.

NRI’s should make use of this online transfer facility

I think the best use of this facility can be made by NRI’s , who are already have a Public Provident Fund account , but could not go to bank branch to invest in PPF and waiting for information like this.

Just try this option with Rs 500

If you are wondering if this whole netbanking will work or not , I can tell you that there are countless number of investors already doing this and I am sure you will hear from other fellow readers that they are already doing this. It would be a great idea to test this by adding your PPF account and then test a transfer of Rs 500 and confirm once that it really got transferred .

Where you looking for information like this ? Will you test this with your Public provident Fund account and do a test transfer ! , please update your comments about it in comments section .

Thanks to Jayaprakash for sending me these screenshots and also confirming that he was able to transfer money from his ICICI bank to his PPF account.

CIBIL Report Online – Get your credit score in your email

This article will teach you how to apply for your cibil report online . Some months back, I had written an article on CIBIL report which was well taken. A lot of readers applied for CIBIL score and were shocked to see their CIBIL report was messed up because of some past sin committed in area of credit card, home loans, personal loans. A lot of you applied for CIBIL report which took some time, energy and lot of commitment, but majority of readers didn’t take any action and just told themselves “I will apply soon” .. that “soon” never happened and seems like CIBIL heard your prayers. CIBIL scores are now available online. Fill a form and make the online payment in 10 minutes, authenticate some questions and get your CIBIL score online in your email in next 4 days ! . I applied for my personal CIBIL score and I got it in just 2 days in my email . My score was 835 ! . yippee !

Procedure to get your CIBIL report online

Note that you can only get your CIBIL TransUnion Score (Including CIR) by paying Rs 450. You cant get CIR alone .

1. Fill up the online form

The first step is to fill up a form online here . It asks Name, address, Phone details along with Identity and address proof. At the end it would ask your Loan account number (credit card number in case of credit card) . Make sure you fill up the form correctly and also double-check that you are putting correct address, identity proof related number like PAN number , Passport number etc. Once you are done with this step, you move to step two, which is payment online.

CIBIL Report online

2. Make an online Payment

Once you have filled up the form, and click on “Make Payment” button, you will be redirected to the payment gateway where you can make the payment of Rs 450 by credit card, NetBanking or other ways . I would suggest making a payment using net banking , because I used credit card option myself two times and it failed , but with Net banking option, I didn’t face any issue.

Make sure you do not close the page after making the payment, it will redirect you to a CIBIL page where the 3rd step will be performed. Note that before you move to 3rd step , you will get an IDENTIFICATION ID number , please make sure you note it down properly.

Tip : The reason why we keep getting transaction failures (with payments getting deducted) is because of the way the CIBIL website handles cookies. Its always better to clear off everything in your browser before attempting to pay for your report. I found this the hard way after my payments were deducted a couple of times (1 refunded and 1 waiting for refund). Thanks to Vijay for this finding

3. Authentication

Now from security point of view, now you will have to answer 3 questions which would be related to your credit history. Once you answer these questions, your authentication will be successful and you will get your CIBIL score card in your email in next 4 days. You will get this message once authentication is successful

We will e-mail your CIBIL TransUnion Score (Including CIR) within 4 business days*. The On-Line Payment Confirmation is emailed for your record. For any queries on the status of your request, you can write to us with your Transaction Id at [email protected] after 4 business days.

You will get a receipt of payment which you can print right away and you will also get an email with PDF copy of your payment and other details.

What if authentication fails ?

Incase the authentication step fails while applying for cibil report online, don’t worry .. all you need to do is take the print out of the payment receipt (you get it in email also) , self attested photo copies of the required documents (identity and address proof) which you had put in the form in the start , and send it to CIBIL address. You should get back your CIBIL score in next 10 days.

Documents Required & CIBIL address

1. Online Payment Confirmation
2. Identity Proof – PAN / Passport / Voter’s id (Identity proof should be valid and not expired)
3. Address Proof – Bank Statement / Electricity Bill / Telephone Bill / Passport / Credit Card Statement (Address proof should be not more than 3 months from the date of application and should be in your name)


Consumer Relations – Disclosure Request,
Credit Information Bureau (India) Limited, Hoechst House, 6th Floor, 193,
Backbay Reclamation, Nariman Point, Mumbai 400 021.

Data Security ?

While CIBIL says that the whole process to apply for cibil report online is secure and there has been rigorous testing, I personally realised that it’s not 100% secure. First the email id where you want to order the CIBIL score can be any email id , all i need to know is your important documents numbers and your credit history and some numbers , which I feel a lot of people share with their close friends and relatives sometimes . So the real security would happen when you do not disclose your credit related data to anyone .

In last few months we have seen that there have been many complaints from hundreds of people on how they could not get a loan because of their low CIBIL score or some bad past record . Banks are seriously looking at these scores now and make sure you at least have a look at your CIBIL score once . So if you have any credit card or loan , you should apply for CIBIL score and have a look at it.

Try out ordering your CIBIL report online and let me know if you were successful or not . Also share your experience with CIBIL in comments section.

Personal Accident Insurance Policies in India – With Comparision

Did you ever know someone who met with an accident and he was the main bread-winner of the family? Mostly yes. A personal Accident Insurance plan is policies that cover a person from accidental death, accidental disability and several other features. There can be very bad consequences of meeting an accident like death or pause in income, ranging from a few weeks, months to even years.

A term plan can only help in death and a health plan can help in case you are hospitalized, some of these policies also offer accidental riders, but these riders are not as comprehensive as standalone Personal Accident Insurance policies have. In these articles, let’s see the benefits and features of Personal Accident Insurance policies.

Ajay was one of the best employees of his company based in Bangalore . He bought a term plan as soon as he realised the important of securing his life. He also bought a health coverage to secure his wealth (not health). He had recently bought a home through loan and he was also investing for his 2 kids future . Ajay was the only one earning in his family which also had his mother as dependent on him.

It was the last working day of the week just before Diwali holidays and he had to rush home early that day. He was as attentive while driving as he was always, but he forgot that accident happens not because you are careless , but because other can be damn careless … While Ajay was taking a u-turn another car slammed into his car which was coming with a lot of speed.

It was a serious accident and what Ajay never imagined happened ! . Both of his hands were non functional after the accident . Being a senior programmer in his company, he knew that his future is lost now . This one incident changed him life. While his income stopped, his expenses at the house, EMI etc had to still continue.

His term plan could not pay him because he was not dead. His health insurance plan covered the expenses for hospitalization, but only covered for a basic amount incase there was a temporary disablement. But Ajay case was not covered in any of his existing insurance policies. At this point in time, if Ajay had a Personal Accident Insurance Policy, it might have helped him a lot.

If you are a reader of this blog. Most probably you must be living in a big city, most probably you are salaried class and obviously you must be travelling from home to office and office to home, you will do it every day, for months and years .. that would be thousands of days. The chances of death or getting hospitalized for some illness is far lower than the chances of meeting an accident these days. So in today’s world more than a Life Insurance and Health Insurance, the first thing which you need is an accidental insurance policy and why not. Its costs so less that one can afford it very easily. You can buy a 10 lacs accidental cover anywhere from Rs 800 to Rs 1,500 per year depending on the company and benefits. But one thing is sure that it’s very cheap.

what a Personal Accident Insurance policy gives you?

Think for a moment, what all can happen if one meets an accident, what can happen, what are different kinds of end results of it? An Personal Accident Insurance policy covers almost all of them. Below is a table that gives you an idea of what kind of situations are covered by accidental policies.


1. Death In case of a death due to accident, the policy would pay 100% Sum Assured to the nominee. Some companies also pay a “Children?s Education Bonus” of 5000 or 10000 for a maximum of 2 children.
2. Permanent Total Disablement This means that in case there is a permanent total disability, in which a person is disabled for life, the SUM assured is paid to the person. Some companies also pay around 125% or 110 %, depending on the company. Example – Loss of

  1. both hands or both feet
  2. one hand and one foot
  3. one (hand or foot) and an eye
  4. loss of sight of both eyes OR speech OR Hearing of both ears
3. Permanent Partial Disablement In this case, a small percentage of SUM assured is paid on a weekly or monthly basis. For example – 1% of the sum insured is paid every week up to 100 weeks. Example below

  1. Loss of Index Finger or thumb
  2. Loss of hearing in 1 ear
  3. Loss of 1 eyesight
  4. Loss of 1 hand
4. Temporary Total Disablement This means that for some weeks or months a person is totally disabled and will not be able to work and earn money. In this case, most of the companies pay a part of the sum assured, some pay 100% and some pay 50 %, there is also a cap in this case, like a maximum 5 lacs or 10 lacs. Example below

  1. Bed rest of next 3 months
  2. Fracture in hands or legs

Other Features

  • Some companies cover claims arising out of Terrorism or acts of Terrorism
  • No health check-up required for policy issuance
  • Worldwide coverage of the policy
  • It gives coverage starting from 5 lacs to 50 lacs
  • Free lookup period of 15 days
  • 5% per claim free year to a maximum of 50%.
  • Family discount of 10%

What is not included (Exclusions)

Accidental policies do not cover Deaths or disablement because of

  • Intentional self-injury, suicide or attempted suicide.
  • Influence of intoxicating liquor or drugs
  • By committing any breach of law with criminal intent
  • Suffering from any pre-existing condition or pre-existing physical or mental defect or infirmity.
  • Aircraft pilots and crew, Armed Forces personnel and Artistes engaged in hazardous performances are totally excluded

Premiums do not dependent on AGE

The premium of accidental policy does not depend on age. So if you are 25 yrs old or 50 yrs old, the premiums would be the same, rather it would depend on your working conditions and the nature of your job. If you are a software engineer working in Bangalore, then your chances of meeting the accident are different from an army personal working in the border or a worker in a factory that has dangerous machinery. So each kind of job profiles are divided into different risk level, sometimes it’s 1,2,3 and sometimes it’s just 1,2. Risk level 1 are those who are less risky and their premiums are lower and risk level 2 are high risky category and their premiums are higher. Let me give you an example

underground mines, explosives, magazines, workers whilst involved in electrical installation with high tension supply, jockeys, circus personnel, engaged in activities like racing on wheels or horseback, big game hunting, mountaineering, winter sports, rock climbing, potholing, bungee jumping.


Risk Level 1 (Low Risk) Risk Level 2 (High Risk)
1. Doctors
2. Engineers
3. Bankers
4. Accountants
1. underground mines workers
2. jockeys, circus personnel
3. Mountaineering, rock climbing & bungee jumping,


Note that some companies have a list as 3 different risk levels – 1,2,3

Examples of some good accidental policies

Below I am listing down some of the accidental insurance policies and their different features. If you see all of them, you will realize that all the policies have something good or bad in them. This chart is made by collecting information from different portals and companies’ websites. Note that the premiums below are for Low-risk professions (Level 1)

Accidental Insurance policies in India

If you see the above table, you can see that on absolute level Bajaj Allianz seems to be the best option and it’s the recommended one. The best part is that the claim settlement ratio is high and that’s the biggest parameter people look for.

Please comment on what do you feel about Personal Accident Insurance policies and what has been your experience in that?



what a fly can teach you about Financial Planning

Why some idiots don’t Plan out things in life? – Hey, we are not saying this but it’s a message from a “one minute fly” to all of us. The fly is here to ask you one question what do you want to achieve in the one precious, unrepeatable life that you have? Really go deeper and figure out what do you REALLY REALLY RALLY want in your life. What kind of house you would like to live in? What kind of places you would like to visit? What kind of people you would like to meet?

What kind of charity you would like to do? What kind of retirement you would like to have? What kind of wild things you would like to do in your life? What kind of legacy you would like to leave?  We all have one financial life and we should make the most out of it. We tell this to all our coaching clients at the end our financial life will either will be a “warning” or an “example”. It is up to us how we create our financial life like an example.

One of the Financial coaching Principles is “Start living a good financial life rather than trying to live a good financial life”. Personal finance is not about what you are going to do next month or next year it is all about what you are doing right now. 

We would like you to watch a video and learn some life-changing lessons from it; you can learn the importance of planning from a One Minute Fly.

The video “One Minute Fly” Teaches us the true meaning of life.  It teaches us some very important life lessons on how we should live our life.  One of our clients after watching the video said “We are the same as this Fly in the video”, he is so true we are just the same.   We are here on this earth for a limited period of time and we have to do our best.  We have many things to wrap up in the one life we have.

It is therefore important to figure out the important goals of your life and start planning for them.  Let me tell you something. This life goes by so fast you cannot believe it. One day you are 25 looking forward to all that life has to offer it, and the next day you are 52. You suddenly get on the other side of those dreams, looking back and wondering where in God’s name all the time went.

You are lucky if you have more time ahead of you than behind you. If not now than when will you start planning. This is the right moment in which you can start creating your financial life. So step fully into your financial life and start making the most out of it. This is not an article, this is life,  so dust casualness and laziness from your financial life. We want to leave you with a beautiful poem from the movie Zindagi Na Milegi Dobara

If you have eagerness in your heart, it means you are alive,
If your eyes are filled with dreams, it means you are alive
Learn to be free like the wind, Learn to flow freely like the river,
Embrace every moment with open arms,
See a new horizon every time with your eyes,
If you carry surprise in your eyes, it means you are alive,
If you have eagerness in your heart, it means you are alive…

Once you are through with the video take a blank piece of paper and make a list of 100 things that you want to do before you leave this world.  It would be great if you can share some of your dreams and goals with us in the comments section. In this moment you can declare your goals with courage, play for your goals with courage and live your goals with courage. If on your own you are not confident take some professional help, spend some money on yourself and get a financial plan or get a financial coach and start taking actions and make the most of the one financial life you have.  And don’t forget to comment on what did the FLY TEACH YOU.

This article is written by Nandish Desai.

The reason why premiums of Online Term Insurance Plan are cheap !

So let’s just come to the point directly! Why the hell on this earth are these Online Term Insurance Plan premiums so cheap? Sometimes even 25-30% of what an offline term insurance plan costs.

So now, think hard! What are the factors which make Online Term Insurance Plan premiums so cheap?

Online Term Insurance Plan

You will hear most of the agents, planners and even media personalities tell you that its lower because the agent commissionis saved and other administrative costs are not present in online term plans, but that’s not the biggest reason because if agents commission is just 25% of the premiums in 1st year and there after it’s in single digits for rest of the term.

So if agents commission’s absence was the reason for lower premiums than it should be just 10-15% lower than offline term plans.

Current Online Term Insurance Plan in the market

At present, there are a total of 10 Life Insurance companies who are providing online term insurance plans and their premiums differ from each other. The cheapest premium seems to be from Aviva iLife for most of the categories.

For example for a 30 yrs old male, term insurance for 1 crore for a 30 yrs term would cost only Rs 8200.

  1. Aviva iLife term insurance
  2. ICICI iCare term insurance
  3. Kotak e-preferred Term Plan
  4. Aegon Religare iTerm
  5. Metlife met protect
  6. Future Generali Smartlife
  7. HDFC Click 2 Protect
  8. IndiaFirst anytime
  9. DLF Pramerica – UProtect
  10. Edelweiss Tokia – Life Protection

The real reason why online term insurance plan premiums are so cheap is that the segment which buys online is perceived to be less risky! It’s about the target market category. A person who is net-savvy is perceived to be less risky than a person who is not net-savvy and then it’s assumed that he will have access to better health care a better lifestyle and more chances of outliving his non-net-savvy counterpart.

So a govt employee from Jaunpur buying a term plan directly is seen differently than an IT professional from Bangalore taking an online term plan.

So on average, a person from a big city like Mumbai, Bangalore, Pune, Hyderabad and other big cities having an ability and access to buy online has a different profile, then a person who belongs to a tier-4 and tier-5 city who is not net-savvy!

Both have different risk profiles, different mortality rates and hence premiums vary a lot.

Commissions and Admin costs?

Not to forget the agents’ commissions and administrative costs which are saved when an online term plan is issued. Those also help in saving the cost to some extent. As each and every company has its own claim record, their own underwriting rules (rules to decide the premium) and depending on how aggressively they want business :), the online term plans premiums can vary a lot across insurers.

You should check this article from money life on the Term plan and their premiums pricing. So I hope you must have got a clear understanding of why Online Term Insurance plans premium is so cheap compared to other Offline Term plans.

Resolve your Consumer complaints in India in Personal Finance

Have you been mis-sold any financial product? If yes, then you must be confused about how to approach the consumer forum and talk to the company’s customer care to get justice. While there is no guarantee, neither there is any magical formula on getting justice. There are a few rules and some tips which you can keep in mind while trying to resolve consumer complaints and approaching consumer forums in India. So I asked Ankur Singla of Akosha.com, to share some tips and tricks which you can use. Akosha.com works in the area of resolving consumer complaints in India against large brands. So here is what they have to share –

Consumer Complaints in India

Customer Care escalation

If a bank or insurance company (or any other company for that matter) mis-sell a product or provides a deficient service, you are entitled to get relief from the consumer forum. Before you decide to file a complaint, make sure you have done the following –

  • Spoken to the company‘s customer care,
  • Escalated the call (simply ask the junior customer care representative that you would like to speak with his senior) and tried reasoning with them
  • Approached the industry ombudsman – our experience with banking and insurance ombudsman is mixed. Sometimes you don’t hear from them for months, sometimes they are prompt and the bank or the insurance company back down simply upon the matter being sent to them.
  • If none of these have worked for you, and you are still unhappy, you can consider approaching a consumer forum. Here is how:

Approaching Consumer Court Forum in India

Step 1

Send the company a notice. A notice is a letter, hand-written or printed on plain paper which explains what exactly happened, what you are unhappy about, what you would like the company to do and what you would do in case the company does not resolve the issue. Here are some tips on writing this letter:

1. Do not misstate facts. If there has been some lapse from your side, please expressly state it.

2. Specify all the details which would enable the company to resolve your complaint faster (who you spoke to, invoice number, request number, product id, date of purchase etc.).

3. Do not use foul language or threaten. However, be firm.

4. Provide a 15 day period for them to resolve your complaint.

5. Make sure that you mention a line to the effect that if the company fails to resolve the issue, you would be forced to file a consumer complaint and take other action as well.

6. Send this letter by registered post acknowledgment due or by courier. Make sure you tell the courier company that you would be requiring the proof of delivery (POD) from them. It usually comes to you in 15-20 days of sending the letter.

Step 2

At this stage, usually, the company will call you back or email you and start taking your complaint seriously. If they offer you relief or some kind of incentives, coupons, free products or services, do consider their offer seriously. Don’t try to over-optimize (we have had a lot of customers who ask for ridiculous amounts of compensation – which would not even be given by the consumer court forums. Therefore, the company decides to wait and let the consumer approach the forum).

There is also the possibility that the company will not reply to your notice or reply to say that they would not be able to solve your complaint. In such a case, you are left with no option but to go to the appropriate consumer forum.

Step 3

Consumer Forums are divided into 3 levels – District Level, State Level, and the National.

If the total amount involved in your complaint (worth of the goods or services and the compensation you ask for) is below Rs.20 lakhs, then you will have to approach a District Forum. Typically, you have to file your complaint at the District Forum under whose jurisdiction the company or its dealer or its authorized agent carries on business. To understand which forum you can file your complaint in; please see this article – Understanding Jurisdiction of Consumer Forums.

Typically it will take about 6-18 months to resolve a complaint through the District Forum. If the stakes involved are high, either side may appeal to the State Forum and the matter may take longer. You have the option to appear before the District Forum yourself or through a lawyer. Usually, people do not have the time to appear themselves, so they hire a lawyer. A lawyer can charge anywhere between Rs.2000 to Rs.20000 for a consumer complaint depending upon the complexity of the case, his/her experience, and your willingness to pay.

During the course of the case, you might have to appear 2-4 times in the District Forum. Don’t be intimidated by this – the judges are generally customer friendly and you are only required to state the facts.

Tips on writing the complaint

  • Here is a link to the format in which the complaint has to be written. It is pretty simple and you can do it yourself.
  • Make sure all the paragraphs are numbered and you state all the relevant facts properly.
  • Make sure you have supporting documents to prove your case.
  • Please add a simple clause saying that the consumer forum you are approaching is the correct one and has jurisdiction over the matter.
  • You can also go directly to the nearest consumer forum and ask at the helpdesk to help you with your complaint.

Once the consumer complaint is filed, the consumer forum sends a notice to the company asking them to respond to your complaint. A lot of times the company will realize that you are serious and probably, to avoid spending 10-15k on their own lawyer, simply resolve the complaint. However, in banking, insurance and financial sector, most of the large players prefer to take the customers through court and often keep appealing against successive defeats in front of consumer forums.

So, why don’t people file consumer complaints?

Despite the ease of using consumer forums, a lot of customers don’t end up filing a consumer complaint.  It’s a quick cost-benefit analysis – it sounds like too much time, money and effort to pursue it. Sometimes the stakes involved are not that great; also Indian customers have a Chalta Hai Attitude. Once their issue is resolved, they move on with their lives. However, if you are really frustrated with something, it is important to know how to file a consumer complaint.

Just like the RTI, filing a consumer complaint is a powerful tool for consumers. If you are unhappy with a product or service, just follow this process and you should come out happy on the other side.

5 important lessons from solving consumer complaints

1. As a customer you can be wrong as well. So make sure you understand the terms and conditions when you buy financial products and services. A simple Google search like “5 things to know about mediclaim insurance” could lead you to some useful articles.

2. There is no such thing as a free lunch. If something is too good to be true or sounds like a great deal, simply avoid it. It’s most likely something that will end up scamming you.

3. Escalation of your complaint to higher authorities of the company is an art. Don’t write angry emails. Don’t do a version of the Delhi-style “Jaanta Hai Mera Baap Kaun Hai”. Remember there are human beings on the other end. Write politely, reasonably and not very long emails/letters (unlike this article).

4. Some banks/insurance companies’ CEO has an escalation department of their own. So if you can find their email id or guess their email id, just copy them in. Their secretary will check it and probably your complaint will be heard quickly.

5. Prevention is the only cure. Life’s too short to waste time talking to customer care. Avoid such situations.

You can reach Ankur at Ankur @ akosha.com. Ankur is a graduate of the National Law School of India, Bangalore and worked at a corporate law firm before starting Akosha. I am sure your Consumer Complaints will be solved