Becoming a crorepati is generally a lifelong dream for most people, but it is not as unattainable as it may seem. Given the right combination of patience and commitment, you can easily hit the 1 crore mark before you choose to retire. Assuming you are just starting out in your career, this plan for the distant future requires a solid long-term strategy to help you achieve your objective.

However, chalking out a strategy is only one part of the process. It is the actual follow through that distinguishes wealthy investment gurus from aspiring investors. So, what are the steps you can take to reach this goal as early as possible? Let’s discuss them here.

1. Assess Your Present Situation

The first step is to map out the distance to your destination. So, before you start making any concrete decisions, first consider your current net worth. For example, if you already have a net worth of Rs. 20 Lakhs, and you are aiming to become a crorepati in 20 years, you need to invest an average of 13,000 per month at an interest of 8% per annum, to meet your target.

It is equally important to assess your age, income, expenses, and family situation at this point. This will allow you to set a realistic time-frame for achieving your goal.

2. Start Investing Immediately

Investments may be a secondary source of income, but they are the primary source of wealth creation. Once you have charted a fair timeline and a realistic savings amount, start investing the money immediately. The sooner you begin, the more time you will have to build a sizeable corpus for the future. This will result in one of two things – you’ll either be able to retire earlier than expected or save more money than planned thanks to the compounding effect.

3. Spread Out Your Investments

You can make smart decisions and investments, but that doesn’t guarantee it will be your big ticket to wealth. When it comes to creating a cache this big, you will need to take a fair amount of risk. Aside from real estate, which requires large capital, you should consider putting your money in mutual funds, retirement accounts, and ULIPs. The best ULIP plan is one that provides maximum growth opportunities and adequate coverage along with some much-needed flexibility. It is ideal for individuals who are willing to invest long-term. You can even buy ULIP online if you want to skip the hassle of physical forms.

4. Save First, Spend Later

Contrary to the norm that exerts ‘saving money after expenses are paid’, it is a better idea to do the exact opposite. First, save a fixed amount every month as per your goal, and then move on to your expenses. This will acclimatize you to the habit of setting aside a predetermined percentage of your income and help you live within the confines of a budget. That doesn’t mean you can’t indulge yourself once in a while, but remember, a target like 1 crore requires some sacrifices.

By taking these steps and focusing on your goal, nothing can stop you from becoming a crorepati before retirement and living the rest of your life in carefree comfort and luxury.

Life is uncertain. One cannot rule out the probability of an unfortunate event of death. Though you may not have control over every imminent uncertainty, you may secure your financial well-being through a term plan.

Understanding term policies

Before purchasing such a policy, it is imperative to know what is term insurance and the benefits of such a policy. A term plan is the simplest form of life cover, which provides coverage for a pre-determined term. In case of an unfortunate event during the policy term, your loved ones are entitled to receive the sum assured amount. Such plans do not have a maturity benefit.

Term plans – Protecting your big plans

Through a term insurance plan, you may meet your short-term and long-term goals rather easily. Such a type of cover is an excellent choice for individuals in their family formation years when the need for protection is the greatest. A term cover allows you to invest in high levels of coverage at an affordable price, thus making it a perfect product for your insurance needs.

Following are five major reasons why a term plan aids in protecting your big plans.

1. Financial security

This is one of the most important advantages of a term plan. In the case of an untoward event, your family is well protected against various financial obligations. They may use the received sum assured amount to fulfill their big plans such as higher education, meeting wedding expenses, purchase of an asset, or even meeting funeral expenses. They may continue meeting lifestyle expenses without any financial constraints. Purchasing such a plan, therefore, provides peace of mind that their needs will be taken care of even in your absence.

2. Great choice for single parents

Many single parents are burdened with finances and therefore avoid investing in a life cover. However, the truth is that your child solely depends on you. You need to ponder over the fact that they may be left financially crippled if you are not around them tomorrow. Term plans, given their affordable nature, is an ideal option for single parents. With the help of the death benefit amount, your children may continue living their life and achieving their dreams.

3. Conversion to a life policy

In certain cases, you may convert your term policy to a whole life policy and start building cash value. This not only aids in supporting your dependent but also helps in building savings. You may use the amount in whatever way you seem fit such as meeting your retirement goals, estate planning, down payment for a new home, or a cushion for emergency expenses.

4. The benefit of additional coverage

Riders, also known as add-ons, provide additional coverage at an extra premium. These riders supplement your existing term plan and allow you to enjoy a customized cover, as per your needs and requirements. Some of the common term riders include critical illness rider, waiver of premium rider, accidental death rider, accidental disability rider, and income benefit rider, among others.

5. Tax benefit

Term plans are an excellent instrument to lower your tax liability. The premium paid towards your plan is eligible for tax deduction under Section 80C of the Income Tax Act, 1961. You may enjoy a maximum deduction of up to INR 1.5 Lakh from your taxable income and save a significant amount of money.

A term cover has numerous benefits. It offers the much-needed protection for all your big plans in life. You may, therefore, purchase a term plan at the earliest and usurp the many benefits such a policy has to offer.

With slow-paced earnings and fast-growing expenses, people are always seeking different ways to effectively boost their wealth. While there are several options available in the market to do so, investing in a vehicle like life insurance can help accelerate the process.

Life insurance not only includes extensive life cover for the insured but also financial security for the beneficiaries, in case of the policyholder’s untimely demise. And, if planned properly, the other life insurance benefits can further allow one to amass more wealth.

Having said that, let’s take a look at some of the wealth building benefits of life insurance:

1. Guaranteed protection

The most salient feature of life insurance policies is that they include a savings component called cash value. Along with payments made on your policy, this value increases. The premium you pay is divided and distributed into the death benefit, administration and investment fund, with most of it going towards the investment fund.

In time, as the investments flourish, so does the value of the policy and thereby, the policyholder’s wealth. But most importantly, much like your bank, these policies provide guaranteed protection to your investment and payouts.

2. Instant availability of cash

The untimely demise of the sole breadwinner in a family can result in a major financial crisis. During such a time, the life insurance cover provides the beneficiaries with some much-needed cash required to help cover all the incurred expenses. Further, the assured cash value can help the family sustain their standard of living, and live free from any financial burden whatsoever.

3. Exemption from taxes

Amongst the several benefits offered by life insurance policies, this one qualifies as one of the most prominent ones. In compliance with Section 10 D of the Income Tax Act, the funds accumulated from such policies are non-taxable. Moreover, even the fund growth isn’t subject to taxes, thereby increasing the cash value of the funds over time.

4. Elimination of Debts and Liabilities

During a policyholder’s demise, the dependents may be faced with numerous liabilities or unpaid debts. Acting as a strong financial tool, life insurance can help alleviate these pending debts and liabilities, such as a child’s college education, marriage expenses etc.

Given these life insurance benefits, procuring a life insurance online or even through an agent could make for a healthy investment. It can also help increase your wealth prudently. Thus, it would be wise to learn all about life insurance and effectively build your wealth.

The direct answer to the question in the title is yes. However, things are not that simple. It is better to acquaint yourself with the intricacies involved with car modifications and car insurance to understand their correlation in detail.

Read ahead to know more about the same.

What is car modification?

A car comes with a certain type of wheels, accessories, engine, etc. When you change such factory-made components by adding or removing certain parts, it is termed as car modification. Such car modifications are often related to performance enhancement or aesthetics.

How does car modification affect insurance?

Car modifications are almost always related to enhancing the car’s value. Be it tinkering with the engine or changing the interiors, modifications increase the car’s value. An increase in car’s value will increase its insurance premium as well.

Factors affecting a car’s Insurance Premium

In order to understand the correlation between car modifications and car insurance premium, it is important to know which factors affect a Comprehensive plan’s insurance premium. Here’s a handy list.

• Engine’s Cubic Capacity – As mentioned in the car’s registration certificate.
• Fuel type of the car – Whether it is a fuel-driven or CNG-driven car.
• PIN code – The location where you drive/register the car.
• Claim history – Number of claims raised in the past.
• Add-on covers – Additional covers chosen while purchasing the insurance policy.
• Car’s Insured Declared Value [IDV] – IDV can be referred to as the approximate current market value of the car. However, it shouldn’t be considered as the car’s resale value. IDV is the value the insured person receives in case the car faces total loss [irreparable damage/theft].

Factors, Modifications, And Insurance

From the points mentioned above, here’s a list of the factors that increase the car insurance premium with respect to modifications.

Engine’s Cubic Capacity

The Insurance Regulatory and Development Authority of India [IRDAI] states the insurance premium of a Third-party Liability component based on the car engine’s cubic capacity. If a modification increases the engine’s cubic capacity, the premium will increase accordingly.

Insured Declared Value [IDV]

Certain external and internal modifications to the car will increase its IDV. Such modifications that increase the IDV will increase the car insurance premium.

Accessories Cover Add-on

A basic Comprehensive plan will not cover the extra-fitted accessories. Thus, they need to be insured with the help of the Accessories Cover. If you opt for an Accessories Add-on for the extra modifications in your car, your insurance premium will increase.

Inform the insurer

You should inform your insurer about the technical and aesthetic changes you make in your car. Consider this example for better understanding – Suppose you modify your car after you have purchased the policy and have not informed your insurer about the same. In case the car is involved in an accident and you raise a claim, the insurer will inspect your car before settling the claim.

At that time, the inspector will find out that the modifications were not disclosed. Such non-disclosure can lead to claim rejection. Thus, it is beneficial for you to disclose the modifications made to your car to avoid any surprises related to claims settlement.

Contacting the Insurer

Whether you have opted for offline vehicle insurance or online vehicle insurance, you should contact the insurer as soon as you make any modifications to your car. As mentioned above, such changes will increase car insurance prices, but that shouldn’t stop you from getting in touch with your insurer. You can call or email your car insurance company to inform them about the change in your vehicle. They might send an inspection team to gauge the modifications and change the car insurance prices accordingly.