Term Insurance – An Overview

September 6, 2013

Term insurance is very common these days. Few years ago, when insurers were not aware with this kind of insurance schemes, they used to prefers other form of insurance in which there was a maturity benefit. But today, people are much aware and they better know value of their lives. So, many insurers are going towards term insurance. It is a life insurance which gives protection to your life for a specific period of time. You can select the policy term while taking a term insurance.

As term insurance is a pure life insurance, it does not provide any maturity benefit. This insurance gives complete risk cover to your life and provides you benefit only if you die during the insurance period. If you survive till your insurance term gets over, you will not get anything on maturity. In case, anything mis-happen occurs to you in which you die, the policy amount (risk cover) is paid to your nominee and the policy is closed.

Your policy get lapsed if you have not paid the policy premium even after the grace period. Once, your policy is lapsed, you will not get any benefit mentioned in the policy document. However, insurance companies provide you a grace period of 30 days even after premium due date. During this period, if you pay the premium, your policy remains inforced. Apart from this grace period, companies also provides you a free look period of 15-20 days after issuing a policy. During this period, if you found that policy is not matching your requirement, you can send a request to cancel the policy. After deducting a nominal charge, remaining amount is credited to your account.

A term insurance can be taken for a term of 10 to 35 years or upto a maximum of 70 years of age at policy maturity. As term insurance is a pure death benefit insurance scheme, it primarily provide financial support to your nominee. Term insurance is preferred over other insurance schemes as it is less expensive as compared to other insurance. Premium frequency can be yearly or half yearly in a term insurance. The term you select while taking a policy, your premium remains same throughout that policy term.

Mutual Fund – Systematic Investment Plan (SIP)

September 5, 2012

Mutual Fund is an investment scheme in which money is invested in the share market in multiple shares. There are various mutual funds available in the market. Mutual funds which provides tax benefit on the money invested in it, are called tax benefit mutual funds. Such mutual funds generally have a lock-in period of three years. It means you cannot withdraw your money before three years once invested. There is another category of mutual funds which does not provide any kind of tax benefit. You can withdraw your money anytime after investment. You just need to pay an exit load in these mutual funds. Exit load is a charge you need to pay while exiting from such mutual funds before one year.

Each mutual fund has a NAV (Net Asset Value) which varies as per the share prices in which mutual fund’s money is invested. NAV is also known as the per unit price of a mutual fund. NAV per share is calculated once in a day based on the closing market prices of the shares. The money which you invest in a mutual fund is converted into number of units of the mutual fund after dividing it by NAV of the mutual fund.

There are different methods to invest in the mutual funds. The best way of investment is systematic investment plan. Under this plan, a fixed amount of money is deducted automatically on a specific date from your account. This money is converted into number of units of the mutual fund as per the NAV value. It means if you are making an investment of Rs 1000 on a particular day, and NAV value of the mutual fund is Rs 20. Then total number of units purchased are 50. In other words, your money is converted in 50 units of mutual fund.

To make investment in a mutual fund, it becomes necessary to keep track on the NAV of that mutual fund which is a very difficult task. To make this task bit easier, companies has provided us SIP option. Using this option, you need to select a mutual fund, a specific amount that you want to contribute every month, and the time period for investment. At the time of taking SIP option, you can select a specific date for this investment. For example, you can select that on 5th of every month, an amount of Rs. 2000 per month is invested in HDFC Top 200 mutual fund for a period of 12 months. Using SIP option, your money is invested with different NAV in the mutual fund. You can calculate profit or loss on a specific day by dividing the number of units of mutual fund by NAV.

How to Cancel an Insurance Policy

September 5, 2012

No doubt, if you will ask people around, you will found every third person has taken an insurance policy either life or health insurance. You will be shocked when you came to know that more than 60% of these policyholders are not aware with the process to cancel a policy. This is because they rarely read policy document after taking a policy.

We get relaxed after taking an insurance policy and never read the policy document. We read it only when it comes to claim against a policy. When our claim get rejected due to a specific reason, we come to know that we were misguided at the time of taking the policy. Generally, we think to cancel a policy only when it does not fulfill our requirements or its terms and conditions does not matches the terms mentioned by the broker.

As per IRDA (Insurance Regulatory and Development Authority) guidelines, each insurance company provide a grace period of 15-20 days after issuing the policy document to a policyholder. If you are not satisfied with the policy terms or benefits, you can submit an application to cancel your policy during this time. A nominal charge of Rs 50 -100 is charged for bond/stamp paper and processing fees of the application, remaining amount is credited to your bank account or a account payee cheque is issued to you.

Whenever, you have decided to cancel a policy, you need to write an application to the same branch manager where you have submitted the application form to take that policy. In this application, you need to mention why you are willing to cancel the insurance policy. Mention the reason whether, you are not satisfied with the policy benefits or you were misguided by the agent at the time of taking the policy. Then give a request to cancel the policy.

Within a week of submitting the policy cancellation request, your policy get cancelled. Insurance company will dispatch the cheque against your policy after deducting a nominal charge of stamp paper or processing fees. Remember, once you send the cancellation request for your policy, you will not be able to get any benefit that your policy provides.

House Rent Allowance (HRA) Exemption

September 5, 2012

All the working people must aware with the term House Rent Allowance (HRA). It is part of your salary package which your employer provides. As per income tax rule in India, you can claim for  HRA exemption on the amount that you pay for your accommodation. However, income tax department have set a limit for HRA exemption as per your salary structure.

Many people who are reading this article are not aware of the method to calculate their HRA exempt. There is a general rule many organizations are using in India to calculate the HRA exemption of their employees. This rule basically comprises of three conditions:

  1. Actual House Rent Allowance (HRA) received by the employee.
  2. Excess of rent paid for accommodation over 10% of the salary.
  3. 50% of the salary for the person living in metro cities and 40% of the salary for the person living in non-metro cities.

Least of above three is takes for HRA exemption. Let us understand it with the help of an example;

Ram have a basic salary of Rs 12000 and HRA of Rs. 6000. He pay an amount of Rs 5000 as rent. In this case, HRA exemption can be calculated as:

  1. Rs. 6000
  2. 5000 – 1200 = Rs 3800
  3. Rs. 6000 for metro cities and Rs 4800 for non-metro cities.

Least of above three is Rs 3800. So, Ram will get an exemption of Rs 3800 per month on his rent paid for accommodation.

Cloud Computing – An Overview

September 5, 2012

Cloud computing is a computing model in which IT services and resources (hardware and software) are sold and delivered over the internet. Try to understand it with the help of an example; the email that you are using (Gmail, Yahoo, Hotmail and Rediffmail) helps you to store all the valuable information on the internet. You no need to worry about the software and hardware required to store these mails. You just need a computer and internet connection to access your email account.

Irrespective of the software’s installed on your computer, you can access your email on your computer. Your email is not configured on your local computer; you just access it through internet connection. All the data that you store on your email is actually stored at a server located at a single or multiple locations. It comes under a type of cloud computing known as SAAS (Software as a Service). The cloud helps you to access your information from anywhere at any time. Google doc is also an example of cloud computing where you can create a word, excel or PowerPoint document just using the internet. You no need to install MS office software on your computer. You can create your documents directly on Google docs.

On the other hand, a general computer setup requires you to be at the same location where your data storage device is placed. With cloud computing, you can access your storage device from anywhere. Your cloud service provider can have their own or rent the hardware and software necessary to run your business applications.

Cloud computing helps those small businesses that cannot afford the same amount of hardware and storage space as a larger organization can have. They even cannot buy the application software’s necessary for their business. These smaller organizations store their information in the cloud and reduce the cost of purchasing the software’s and storage devices. Using this service, the chances of wastage of storage space can be overcome as you can reduce the subscription of your storage capacity as per your business requirements.

The basic requirement is to have an internet connection to access the cloud computing. It means, if you want to access a specific document that you have housed in the cloud, you must first establish an internet connection either through a wireless or wired internet or a mobile broadband connection. The benefit is that you can access the same document from wherever you are with any device that can access the internet. These devices can be a desktop, laptop, tablet, or phone. This can also help your business to function more smoothly because anyone who can connect to the internet and your cloud can work on documents, access software, and store data. Imagine picking up your Smartphone and downloading a pdf document to review instead of getting it printed or upload it to your laptop. This is the freedom that the cloud can provide for you or your organization.

How to Save Tax Smartly

August 28, 2012

Are you planning to save tax on your income but due to lack of knowledge or poor money management not able to do so ? Don’t worry ! You are not the only one who is facing such situations. There are thousand of people who are facing the same problem. Some people take services of a financial experts to make their investment, others pay a large amount of money in the form of income tax. Both the options consumes your money.

However, many smart people plan their financial needs and make their investment accordingly. You can also set your goals and make an investment from your earning. If you starts looking for investment schemes available in the market, you will found many options. Some of the investment schemes return a good profit on your investment while some other gives you tax benefit along with a good return. Such schemes generally have a lock-in period of 3 to 15 years but the amount earned as return are completely tax free. Different investment schemes are given below:

  1. Mutual Funds – Tax saving mutual funds helps you to invest money in the market. Investment through mutual funds is one of the safe mode as the money you invest in mutual funds are invested in different shares. With a lock-in period of three years, mutual funds give a good return depends on the market situation. However, you can keep your investment even after the lock-in period. You can invest a minimum of Rs. 500 and there is no limit for maximum investment in the mutual funds. But, you will get tax benefit only upto Rs. 1 Lac invested in the mutual funds.
  2. Employees Provident Fund – EPF saving scheme is compulsory for all the salaried person. As per the government rule, as a salaried person, you need to contribute 12% of your basic salary in EPF. This contribution is deducted automatically every month from your salary. Your employer contribute another 12% of your basic salary in your EPF account. EPF gives an average return of 9.5% and the amount received from this investment is completely tax free. You can withdraw your money after leaving the job with an employer or after the retirement. You can transfer the money from your previous EPF account to the new EPF account.
  3. Public Provident Fund – It is a long term investment scheme widely used in the India. You can get your PPF account opened through post office and state bank of india. With an annual compounded interest of 8.6%, PPF account have a maturity period of 15 years, and the amount received on maturity is completely tax free. You can have only one PPF account at a time with your name. You can make a minimum investment of Rs 500 and maximum of Rs 1 Lac under this investment scheme.

You can also invest money in other tax benefit saving schemes such as NSC, ULIP, tax saving fixed deposits and life insurance.

How to Apply for PAN Card

August 28, 2012

Permanent Account Number (PAN) is a ten digit alphanumeric number, issued by the Indian income tax department in the form of plastic card. A person can have only one PAN card issued under his name. PAN card is mandatory for all the financial transactions such as sale and purchase of assets over a specified limit, getting the taxable salary, opening a bank account and investing money in mutual funds and share markets.

You must have a PAN card, if you are filing the income tax return. For a transaction of Rs 50000 or above, you need to mention your PAN number. PAN card also works as permanent ID proof. If you do not have a PAN card and want to apply for the same then here is the process: 

  1. Download or purchase Form 49A.
  2. Complete the application form in all aspects and sign it.
  3. Affix two photographs on the space provided.
  4. Sign one photograph in a way so that half of the signature appear on the form and half on the photograph.
  5. Attach an identity proof with the application form. The documents whic can be used as id proof are:
    1. School leaving certificate
    2. Matriculation certificate
    3. Degree of recognized educational institution
    4. Photocopy of passbook front page and recent transaction page
    5. Ration card
    6. Voter card
    7. Passport
    8. Driving license
    9. Credit card statement
  6. Attach an address proof with the application form. The documents which can be used as address proof are:
    1. Telephone bill
    2. Photocopy of passbook front page and recent transaction page
    3. Credit card statement
    4. Ration card
    5. Passport
    6. Voter card
    7. Driving license

Collect all the documents as mentioned above and submit the application form with a nominal fees of Rs 94 at the nearest IT pan service centre. PAN card will be issued within 10-15 days after receiving the application form.

Save Money and Get Tax Benefit

August 28, 2012

You have a good earning but still you are not able to save the money. Many people are facing such problems these days. If you are also going through such situation, then read this article carefully. I have asked few people who are running through such situation, why they are not able to save the money. People have different excuses; some says, due to increase in the price of fuel and daily households, they are not able to manage their budget. There is also a group of people who says, they have to maintain their lifestyle as per their growth.

However, saving is not so difficult as it looks. You have to make commitment to yourself, that you have to control your expenses and make some investment regularly. You need to create a budget for your monthly expenses. If you have a good track on your saving and expenses, you can manage in a better way. You can control your unnecessary expenses which helps you in saving. Buy only those things which you actually require. Avoid buying such things which you rarely use.

When you starts saving a small amount of money on a regular basis, after some time it will become your habit. In this way, you will have a good saving after some time. Initially, starting with a small amount, you can increase your saving amount later on. Saving regularly also helps you to get tax benefit on your taxable income. With regular investment, you will not get extra burden for your tax saving investment.

You can invest your money in tax saving investment schemes. In this way, you will get double tax benefit. First, you will get the tax benefit on the money that you invest and second, the amount that you will receive on maturity is completely tax free. Some double tax benefit investment schemes are PPF, EPF, and tax saving mutual funds. Each scheme have their own terms and conditions so please read carefully before investing.

Preparing Yourself for Technical Writing

August 25, 2012

Most of the reader who have recently completed their education are preparing for their interviews. Probably some of them have not decided their career option till now. If you have ever came across Technical Writing profile, this article helps you to prepare for technical writing. Remember, once you choose this profile as career option, you have to write everyday something. To provide quality documents your writing style should be very good. Follow these guidelines to improve your writing skills.

  1. Write Everyday: As a technical writer you have to write a lot on different technologies. So, to improve your writing skills and develop good quality documents, you need to practice a lot. Write everyday something on a topic or about your daily routine. This gives you a chance to think quickly while writing.
  2. Read Something Everyday: Reading is also a technique to improve your writing skills. When you read an article or document, you learn different writing styles. Everyone have their own writing style and you can learn or pick some writing styles from those documents.
  3.  Proofread: During writing, sometimes you did not remember the basic guidelines of writing and commit the same mistakes. To overcome these mistakes proofread your document after completing scripting. Make it a habit to proofread your written documents, this improves your writing.
  4.  Update your writing skills: Check out the general guidelines of writing at a regular interval. Sometimes, writing style varies for different documents. Various writing tools are available in the market. Update yourself with these writing tools to make your writing effective.
  5.  Specialize in a domain: To enhance your market values try to write on a particular subject. Expertise yourself in a subject of your choice – ranging from a software to technology. This makes you expert in a specific field or technology. I had to write a lot on Adobe InDesign, and Dreamweaver.
  6.  Be Confident: Confidence gives you the power to face a problem. Be confident while asking or answering a question. Control your emotions, and try to show your confidence on your face. While interviewing, initially, you feel that subject matter experts (SME’s) are quite complex. But keep yourself updated with latest technologies, and learn how to ask questions. Make notes, and a list of questions to ask. You get expertise in the subject as time goes.

In this way, your writing skills will be improved which helps you to shape your career.

Requirements of Technical Writers

August 25, 2012

As long as manufacturers keep producing technology oriented products, technical writers exists in the industry. Technical writers are required to explain the usage, benefits, and working of these new technologies to the end users. The requirement of technical writers is increasing everyday in the market. Technical writing is a fascinating and lucrative career option for many reasons. Technical writers have the opportunities to:

  1. Develop a wide range of information including writing, book design, graphic design, web development, training and videography.
  2. Express your creativity in a variety of media and formats.
  3. Learn new subject from the experts.
  4. Find work in almost any industry.
  5. Be involved in interesting programs throughout the product development life cycle.
  6. Start working as a business analyst after a good experience as a technical writer.
  7. Promoted to Sr. Technical writer after a good working experience in this field.

Technical writing is an emerging industry in the market. People gets aware about this profession, and looking their career as a technical writer. Technical writing becomes a well known profile in the industry. This article is for those people who are not aware of this profile.

Well, technical writer is a professional who prepare technical documents for software and electronic products (mobile, I-pod, Digital Camera, and other appliances). These technical documents include; installation guide, user manuals, troubleshooting, and device configuration. It is responsibility of a technical writer to describe all the technical aspects in an easy to understand way. User manual is provided with all the appliances or gadgets sold in the market.

Technical writer gathers information from various sources, and prepare documents accordingly. When preparing user manuals for software, writer uses the software, and gather required information. By using the application, writer will come to know various facts. In this way, author becomes familiar with the appliance, and can represent all the features in a better way. Generally, technical writer plays a major role in success of a product.

The advantage to work as a technical writer is, you get a chance to work on different technologies. As a writer, you need to prepare user manuals, installation guides, white papers, story boards, business proposals, and e-learnings. Preparing different kind of documents is a very nice experience. But while preparing these kind of documents, audience level should be clear to the technical writer. Audience are the end users who are going to use the technical documents.