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Tuesday, 20 November 2012

Advantages of Life Insurance

Life Insurance provides the dual benefits of savings and security. The following benefits explain
why this investment tool should be an integral part of your financial plans.

Advantages of Life Insurance

Risk Cover - Life today is full of uncertainties; in this scenario Life Insurance ensures that
your loved ones continue to enjoy a good quality of life against any unforeseen event.

Planning for life stage needs - Life Insurance not only provides for financial support in the event
of untimely death but also acts as a long term investment. You can meet your goals, be it your
children's education, their marriage, building your dream home or planning a relaxed retired life,
according to your life stage and risk appetite. Traditional life insurance policies i.e. traditional
endowment plans, offer in-built guarantees and defined maturity benefits through variety of
product options such as Money Back, Guaranteed Cash Values, Guaranteed Maturity Values.
Protection against rising health expenses - Life Insurers through riders or stand alone health 
insurance plans offer the benefits of protection against critical diseases and hospitalization expenses.
This benefit has assumed critical importance given the increasing incidence of lifestyle diseases
and escalating medical costs.
Builds the habit of thrift - Life Insurance is a long-term contract where as policyholder, you have
to pay a fixed amount at a defined periodicity. This builds the habit of long-term savings. Regular
savings over a long period ensures that a decent corpus is built to meet financial needs at various
life stages.
Safe and profitable long-term investment - Life Insurance is a highly regulated sector. IRDA,
the regulatory body, through various rules and regulations ensures that the safety of the
policyholder's money is the primary responsibility of all stakeholders. Life Insurance being a
long-term savings instrument, also ensures that the life insurers focus on returns over a long-term
and do not take risky investment decisions for short term gains.
Assured income through annuities - Life Insurance is one of the best instruments for retirement
planning. The money saved during the earning life span is utilized to provide a steady source of
income during the retired phase of life.
Protection plus savings over a long term - Since traditional policies are viewed both by the
distributors as well as the customers as a long term commitment; these policies help the
policyholders meet the dual need of protection and long term wealth creation efficiently.

Growth through dividends - Traditional policies offer an opportunity to participate in the
economic growth without taking the investment risk. The investment income is distributed
among the policyholders through annual announcement of dividends/bonus.
Facility of loans without affecting the policy benefits - Policyholders have the option of taking
loan against the policy. This helps you meet your unplanned life stage needs without adversely
affecting the benefits of the policy they have bought.
Tax Benefits-Insurance plans provide attractive tax-benefits for both at the time of entry and
exit under most of the plans.
Mortgage Redemption- Insurance acts as an effective tool to cover mortgages and loans taken
by the policyholders so that, in case of any unforeseen event, the burden of repayment does not
fall on the bereaved family.

Contact No : 8714476620

Plan your tax in advance

     Tax planning is very important...... To reduce your tax liability you should invest in instruments that offer you an additional Rs. 1,00,000 tax benefit in addition to basic tax relief. Well, a life insurance policy offers you one such avenue to claimNotification to an insurance company that payment of an amount is due under the terms of the policy. tax benefits and also offers you and your family protection against any unforeseen circumstances.
      If you make your investments at the beginning of the year, and then take into account the tax deductible, you can easily decide your monthly and yearly expenses. It is clever to consider tax planning within the scope of your financial planning as neither one can be considered in isolation.

      Life insurance policies can be useful tax planning tools, because the policy holder is eligible for tax benefits under the Income Tax Act 1961 (Act). Though there are multiple modes for saving tax, life insurance is one of the most effective tax planning instrument. Plans from Bajaj Life Insurance can be used for protection, long term savings and tax planning. There are two kinds of income tax benefits available to individuals with respect to long term savings being made in Life Insurance policies:

  • Deductions

Tax Slabs

This explains how the various tax brackets in India work and how much tax relief we are all eligible for. The new tax structure was initiated on 1st April 2012.
The tax structure is as follows:

Tax slabs for Financial Year 2012-2013 (Assessment Year 2013-2014)
For Individuals below 60 years of age

Income Level

Tax Rate
Upto Rs. 2,00,000Nil
Rs. 2,00,001 - Rs. 500,00010%
Rs. 500,001 - Rs. 10,00,00020%
Above Rs. 10,00,00030%

Tax slabs for Financial Year 2012-2013 (Assessment Year 2013-2014)
For Senior Citizens aged 60 years
or above but less than 80 years
For Very Senior Citizens aged
80 years or above
Income Level

Tax Rate

Income Level

Tax Rate
Upto Rs. 250,000Nil--
Rs. 250,001-Rs. 500,00010%Upto Rs. 500,000Nil
Rs. 500,001-Rs.10,00,00020% Rs. 500,001-Rs.10,00,00020%
Above Rs. 10,00,00030%Above Rs. 10,00,00030%

Surcharge on Income Tax:
There is no surcharge on Income Tax for the Financial Year 2012-2013 for Individuals.

Education Cess & Secondary & Higher Education Cess on Income Tax
Education Cess @ 2% & Secondary & Higher Education cess @ 1% will be payable on the amount of income tax.

Service Tax

All premiumA regular payment made to the insurance company to keep the policy in force.s and charges are subject to applicable taxes including service tax, education cess and secondary & higher education cess as applicable under the prevailing tax laws. With effect from April 1, 2012, Service Tax Rate has been changed to 3.09% on first year premiumA regular payment made to the insurance company to keep the policy in force. and 1.545% on subsequent year premiumA regular payment made to the insurance company to keep the policy in force. for traditional endowment & annuityA contract sold by a life insurance company that provides fixed or variable payments to a recipient, either immediately or at a future date. products and 12.36% for ULIP, Term, Health products & Riders.

  • The above are extracts from the Income Tax Act’1961. Please note that tax laws are subject to change and hence before placing reliance on the above, the latest version of the above section should be checked. It should also be noted that the change in tax laws could have retrospective effect also.
  • This information should not be construed as expert tax, legal or investment opinion from Bajaj  Allianz Life Insurance Company Limited. Bajaj Allianz Life Insurance Company Limited would not be responsible in any manner for decisions made on the basis of above information.
  • Please consult your tax advisor for claiming tax benefits on insurance products.
  • Please note that the revised tax benefits and slabs presented in the Union Budget 2012 shall be applicable post Finance Bill 2012 gets passed and is enacted as law.

Contact No. : 8714476620

Tuesday, 6 November 2012

Retire Rich

After Retirement, your regular income may stop but your expenses would not.  In fact, they might increase.

Are you covered?


Why do I need a Retirement Plan?

     We work hard throughout our lives so that we can live comfortably during the best years of our life. Actually, the 'best years' begin when we are through with all our responsibilities of life.

After retirement, your regular income may stop but your expenses would not. In fact, they might increase.
Imagine a situation where you have a regular flow of income, even after retirement. A retirement solution would not only help you with a regular inflow of money but would also maintain your existing lifestyle so that you can Retire Rich.

    You may or may not have a retirement plan through your employer. If you don't have an Employer-Sponsored Retirement Plan, you will need to focus on funding your retirement. Also look at other post retirement benefits that you might receive like – health expense cover for an army officer, fixed pension for a government employee, etc.

    However, relying completely on the benefits made available by the employer or the government may leave you in a difficult position as these have their own limitations. Also, the unexpected expenses that may arise are not covered by these securities. 

 How Much  Will I Need?

  • Decide the Age at which you want to retire
  • Decide the Annual Income you’ll need for your retirement years
  • Add up the Current Market Value of your Savings and Investment 
  • Estimate for your Future Health Expenses 

Cash Rich

     At retirement what we look at is financial security. A flow of guaranteed income provides that financial security.

     Bajaj Allianz CashRich plan offers guaranteed cash back of 5% of sum assured per year along with a cash bonus, which would be your regular income.

Key features

  • Accumulated compound reversionary bonus on completion of premium payment term.
  • Cash Back benefit of 5% of the sum assured plus cash bonus, if any declared every year, during the cash back period end.  
  • Sum Assured plus terminal bonus, if any on maturity of the policy.
  • Select your policy term from 10 years to 65 years depending on your financial need.
  • Select your limited premium paying term (PPT) from 5 years to 30 years, in multiple of 5 only.
  • Pay your future premiums in advance and get benefit of appropriate discounts.