The two-wheeler market is huge in India. The roads are filled with bikes and scooters. Sadly, there is a great number of accidents taking place regularly too. Even with comprehensive insurance plans in place, many people end up losing their lives and vehicles in such tragedies. How can one prevent this? The use of technology is being seen as a path-breaker here. Read on to know more.

How technology can help?

Technology can be used in the following ways to prevent two-wheeler tragedies on the Indian roads

1. AI assistance to scan phone calls – Hands-free devices are widely used by motorcycle riders to speak on the mobile phones while riding. However, there are many limitations associated with this. To begin with, most people take a few seconds off the road to see who is calling. They then decide whether or not to take a call. An accident can happen in an instant and even a second’s distraction can spell disaster. We, therefore, need an AI technology system which will read out to the riders who is calling and ask them what action should be taken. This will surely reduce the fatalities.
2. Bluetooth helmets – Many a time, the rider turns his head to listen to what his pillion is saying as the noise levels are too high. This also leads to many accidents. For this, we need Bluetooth enabled helmets that would easily pass the conversation through tech channels to both the riders.
3. Emergency assistance – Finally, technology can be used to inform the emergency services when there is an accident. The sensors should be able to pick up the clues and understand there has been a crash. As SOS call should be made automatically and an ambulance should reach the spot immediately. This is a technology that would surely prevent many deaths resulting from bike accidents.

How insurance can help?

While technology is coming up with innovative solutions, you also have to do your bit and be a responsible rider. You also need an insurance cover to ensure you and the people around you stay safe. So buy a plan and also go in for a timely bike insurance renewal to always stay covered. Bike insurance can help in the following ways:

• Third party assistance – You can get a third party bike insurance plan to cover the damages you inflict on a third party. The plan will compensate the third party for any bodily injury or property damage.
• Own damage assistance – When you buy a comprehensive insurance plan, you get the third party benefits along with a cover for your own vehicle. this is important as the vehicle stays safe and even if there is an accident, you can make a claim and get it repaired.
• Riders available – You can buy some riders when you buy a plan or go in for a bike insurance renewal. You can ask for a roadside assistance rider to help you if you get involved in an accident. The riders are only available when you buy a comprehensive cover and not with a third party bike insurance
• Personal accident cover – If you die in a road accident, your family will get a death benefit due to the personal accident clause in a two wheeler insurance policy. you will also get compensation if you are left permanently disabled after a crash.

Conclusion

Technology can indeed be used in a smart way to prevent road accidents. However, you need to be careful and ride safely too. You also need good insurance coverage to keep you safe. So buy a plan and get the bike insurance renewal done on time. You will stay covered and will be able to deal with a loss in a better manner.

Only selected people can purchase luxury cars without thinking twice because of the high cost associated with it. Others need to weigh the pros and cons of taking such a decision. Read ahead to know 7 factors to consider before purchasing a luxury car.

1. Cost of the luxury car

Luxury is subjective. Therefore, you must ascertain what luxury means to you with respect to a four-wheeler and the cost associated with it. You need to manage your finances well. For example, it can get extremely difficult to manage your expenses if you have taken a huge loan for the luxury car or paying sky-high monthly installments.

2. Mileage

Luxury cars are not known to offer great mileage. This means you will end up spending a lot on fuel. Your fuel bills are certainly going to be on the higher side as compared to an average car considering average usage. If you plan to use your luxury car a lot, it is going to burn a lot of fuel and a hole in your pocket.

3. Servicing cost

A luxury car needs to be pampered. Consider servicing as taking your luxury car to a car spa. Everything has to be proper for the car to dazzle. There’s no cutting down the servicing cost if you want heads to turn when you zoom across in your beloved vehicle. You cannot afford to skip servicing sessions or else there might be some hiccups while driving around.

4. Spare parts

Exotic cars will have hard-to-find spare parts. They will be expensive and there’s no way a luxury car can function smoothly if a low-end spare is used to replace a damaged part.

5. Drivability

Are you residing in a ‘drivable area’? Are the roads suitable enough to drive a luxury car? You need to consider the drivability factor and your location while purchasing a luxury car. A luxury car might be comfortable in traffic on the inside, but if it is heavy traffic then chances of other vehicles damaging your car’s exteriors also increase. This is a minor factor but can be a major one for those who cannot stand even a minor scratch on their vehicle.

6. Safety

Newspapers are filled with reports related to car theft. Luxury cars are attractive. Naturally, thieves are going to spot your car amidst other vehicles. This makes parking and anti-theft devices important. Also, analyzing your locality from a ‘car theft’ perspective is also a good idea before paying a hefty amount to purchase a luxury car.

7. Insurance

Whether you own a budget car or a super expensive one, it is mandatory to insure your car if you want to drive legally on Indian roads. A basic Third-party Liability policy won’t suffice for high-end cars, you will need a Comprehensive Plan. From the above-mentioned points, you might have guessed that insurance costs are also going to be on the higher side when it comes to insurance.

Car Insurance Comparison

Nowadays, it has become easy to purchase motor insurance online. However, do not forget to spend some time on car insurance comparison. You can end up saving a lot of money with a car insurance comparison. There are several web aggregators that can be of immense help while purchasing motor insurance online. Make sure to compare the coverage and benefits of the policies on offer and don’t be blinded by low insurance premium.

Make a note that merely purchasing car insurance is not enough, it needs to be renewed from time-to-time. You can keep your car insured by opting for online car insurance renewal. Insurance for luxury cars is always going to be expensive. Thus, check out offers while going for online car insurance renewal and get a sizeable discount.

With an advent of ULIPs, the question of ‘Should I invest in long term investment plans?’ has disappeared from the minds of the investors. Unit-Linked Insurance Plan [ULIP] is a plan wrapped with a combination of investment and insurance. Investment in ULIPs simply generates the possibility of higher returns as well as safer protection.

Unlike mutual funds, when you invest in a ULIP plan, an insurance company will deduct the charges which are applicable before the units are allotted. Later, the premium amount is invested in either of the three types of funds: equity, debt, or balanced funds. These ULIP charges totally depend upon the insurance companies and their plans. If you are inquisitive to understand the charge structure, go through these listed below before investing in a ULIP:

List of ULIP charges

Mortality charges

There are certain charges applicable for when you are provided with a life cover. These charges are dependent on certain factors like the age of an investor and the sum assured. Moreover, it is deducted on monthly basis. These charges are known as mortality charges.

For instance, Raj is a 30-year-old male with sum assured of Rs. 10 Lakhs and mortality charge of Rs. 2,740. Suppose the monthly mortality charges is Rs.252. If the net asset value by the end of the month is 23.35, then 10.8 units will be deducted from his balance.

Policy administration charges

As the name suggests, Policy administration charge is levied by the cancellation of units as well as is a fee for the administration of the plan. These charges are either flat throughout the entire policy or can vary at a predetermined range. Here, charges that cover paperwork, premium intimation, and so forth are considered.

For instance, as the Policy administration charge for the first year is 0, Raj doesn’t have to pay Policy administration charges. By the second year, he has to pay the charges on annual basis. Additionally, the service tax applicable on these charges are deducted on monthly basis as well.

Fund management charges

When you invest in a ULIP Policy, you are given the liberty to select from either equity funds, debt funds or balanced funds. Therefore, insurance companies charge you with a fee in order to manage these funds. However, before arriving at NAV, fund management charges are deducted.

For instance, Raj has chosen a fund management value of 1.25% for himself. So, the total charge paid for fund management by him is 1.25% of the corresponding fund value. These fund management charges are adjusted in the unit NAVs.

Premium allocation charges

Before investing in ULIPs, there is a percentage of the designated sum which is deducted in the initial years of the policy. Premium allocation charges generally include initial, renewal as well as commission charges.

For instance, 10% of Raj’s premium is deducted for the purpose of premium allocation.

Surrender charges

Failure to pay the premium within the lock-in period paves way for the payment of surrender charges. These charges are deducted from the total sum, if you indulge in premature encashment of units that are either partial or full.

Surrender charges are officially stated in the guidelines of the Insurance Regulatory and Development of India [IRDA]. Moreover, these charges are calculated on the basis of annual based premium.

Now that you have a clearer idea about the charge structure of the ULIPs, do not think twice about, ‘Why should I invest in ULIP?’ Make an informed decision and get the best ULIP plan for yourself.

A mutual fund investment requires due diligence in ascertaining your risk appetite and defining your investment goals. Once you are ready to invest in mutual funds, you may want to analyse them to understand how you can receive maximum returns.

Before we begin the article, let’s take a look at some basics.

What is a mutual fund?

A mutual fund is an investment programme that collects money from different investors to purchase company stocks, bonds, and shares.

Types of mutual funds

Mutual funds can be broadly categorized into equity mutual funds and debt funds. When you compare equity funds vs debt funds, equity funds are more suited for investors interested in long-term growth. Investors who wish to grow their capital at a quick rate prefer these funds.

Here are some factors to consider before investing in equity funds

Risk tolerance

Before you invest, it is essential to analyse your risk profile. The riskiness of equity fund can vary with different mutual funds. While mid-cap and small-cap equity funds carry a higher risk, balanced funds can offer better stability. You may want to examine your risk tolerance level if market volatility affects you. It is a good idea to decide whether you can meet your financial goals with a conservative investment strategy or you can afford to take high risks.

Holding period

According to a recent report by The Association of Mutual Funds in India, 51% of equity funds get withdrawn even before a year finishes. This is because investors make decisions based on the recent performance of the funds. As the market under-performs, they pull out their money. It is important to note that different fund categories work best at different time horizons. It is most beneficial to choose equity funds if your time horizon is more than five years. This is because the market can be highly volatile in the short term but can give you increased earnings, over time.

Consistency of performance

As an investor, you may want to consider the qualitative as well as quantitative factors when shortlisting mutual funds. To obtain a holistic understanding of a fund’s performance, you may compare it to its active peer group. A good equity fund is one that can generate good returns consistently in both bullish and bearish periods. If you invest in a mutual fund based on occasional good yields, it could prove disadvantageous in the long run.

Fund manager’s experience

It can help to take the advice of a portfolio manager to handle your mutual funds’ investments. However, it is essential to find out how long they have been in this field. You may want to examine the fund manager’s experience with the funds in question or other funds he has managed in the past. You can also check if the fund manager has invested a substantial portion of their funds in their own recommendations. This can be a good indicator of their confidence in a fund.

Expense ratio

The expense ratio of a fund is the fees charged by an Asset Management Company for the management, administration, promotion and distribution of a mutual fund. In short, it is the cost of owning the mutual fund. The mutual fund has to break-even this amount before it can start growing your wealth. In short, the lower the expense ratio, the better it is for you.

Conclusion

Mutual funds investment plans require a good deal of patience. It is essential to be patient and not rely solely on immediate returns while investing. You may want to stick to a financial plan and align your investments with your financial goals.

The Interim Budget 2019 would have cheered you with its newly introduced tax reforms. Taxpayers are now relieved with the government’s approval for a full tax rebate on income up to Rs. 5 Lakh. The revised tax rebate will be introduced for the new financial year, starting in April 2019. However, this tax reform may, or may not affect your tax saving investment. This is because depending on the tax slab you fall in you could receive tax rebates.

For annual income up to Rs. 5 Lakh

The newly introduced tax rebate is applicable if your income is Rs. 5 Lakh or below. Here, you will get an income tax exemption for your total CTC [Cost To Company]. Therefore, your income tax payable will be zero. Formerly, the applicable income tax exemption limit was Rs. 2.5 lakh for citizens below 60 years, and Rs. 3 Lakh for senior citizens. Therefore, if your income was between Rs. 2.5 Lakh to Rs. 5 Lakh, your applicable income tax was 5%.

From your aforementioned taxable income, you could save additional Rs.1.5 Lakh by investing in tax saving schemes, like ELSS funds [Equity Linked Saving Scheme], Public Provident Fund [PPF], Fixed Deposits [FDs] and National Savings Certificate [NSC].

In addition, you not only receive a deduction under Section 80C, but insurance purchase under Section 80D can also be considered as part of your tax-free income. With this, you now have zero income tax liability if your income is below Rs.5 Lakh.

Therefore, you may not need to invest this year to save taxes. However, for those with pre-existing ELSS mutual funds SIP [Systematic Investment Plan], it is advisable to continue with it. If you have integrated your tax saving goals with other financial goals, you can continue with your investments. Since ELSS is not only a tax saver mutual fund, but also a high return mutual fund you can receive excellent long-term returns by staying invested.

For annual income more than Rs.5 Lakh

For income up to Rs.6.5 Lakh, you can still get the benefit of 100% income tax exemption, if you invest up to Rs.1.5 Lakh in tax saving investments.

Here’s an example – For instance, your annual income is Rs.6.45 Lakh. The tax rebate is applicable on income up to Rs.5 Lakh. Therefore, if you invest the differential amount [Rs.6.45 Lakh – Rs.6.45 Lakh = Rs.1.45 Lakh] in any of the prescribed tax saving schemes, you will be exempted from paying income tax.

However, if your income is between Rs.6.5 Lakh and Rs.10 Lakh, your applicable tax rate will be 20%. Similarly, for income above Rs.10 Lakh, the applicable income tax rate would be 30%. If your income is above Rs.6.5 Lakh, your tax-free income would be Rs.2.5 Lakh. This slab has not been changed, as per the Interim Budget 2019. Therefore, if you fall under this tax slab, your tax saving investment will not be affected. You can invest in ELSS, PPF, FD or NSC to save additional income up to Rs. 1.5 Lakh.

If your annual income is above Rs.6.5 Lakh, your tax saving investment will not be affected. However, you have the opportunity to save taxes along with fulfilling your financial goals, in ELSS. ELSS can give you handsome returns, over and above inflation, in the long-run. It also has the lowest lock-in period, as compared to other tax saving instruments. Therefore, for those seeking to benefit from the new tax reforms, investing in high return ELSS can be advantageous while saving taxes. This would ensure that inflation doesn’t push you away from achieving your long-term financial goals.

Unit-Linked Insurance Plan [ULIP] which gained popularity post 2008 has set a benchmark for other insurance plans. Being a long term product, it offers dual benefits of insurance and investment under a single product. Moreover, when it comes to protecting your family needs, ULIPs make sure that it leaves no stones unturned.

With an array of features and options, ULIPs can simply meet the requirements of an investor based on his risk appetite and fund allocation. With the stabilization of markets, it allows an investor to yield higher ULIP returns. If you’re someone looking to garner better gains, then go through these 4 tips that will help you increase your returns immediately:

Four things you should try in order to increase your ULIP returns

1. Purchasing a ULIP Policy online

Today, purchasing a ULIP Plan online has become much easier as compared to offline purchase. If you are well versed with market fluctuation, then you can choose the best plan with maximum ULIP benefits with ease.

Online investment in a ULIP Policy will let you use internet based tools in order to keep a track on the market trends. Moreover, you can enjoy the benefits of zero premium allocation as well as policy administration charges. If you invest in an online ULIP, the premium allocation charge can vary up to 20%.

2. Attaining a balance between low-cost investment and high returns

When you invest in a ULIP Policy, keep your focus on the performance and the amount that you have invested in. Don’t be attracted to low cost investments easily and jeopardize the returns that’ll be coming your way.

In order to gain success in ULIPs, it is important to strike a balance between low-cost investment and high returns. The best way to do so is by investing in it at an early stage of life. That way, you’ll not only invest a smaller amount but also reap higher returns. Besides, you can invest in low cost ULIPs at the age of 50 without losing all your money to high mortality charge.

3. Making a long time investment

ULIP Policies require an incredible amount of patience similar to your investment in mutual funds. This is simply because of the policy term of ULIPs is over 12-15 years.

Before you invest in a ULIP Policy, stay updated on the market trends revolving around equity funds as well as debt funds. Keeping a track on these updates will allow you to minimize the risk and maximize your profits. Besides, you avail a lock-in period of 5 years in order to invest a smaller sum for longer run.

4. Opting for a highly valued life cover

A life cover protects your family in the times of need, even without your presence. Hence, opt for a ULIP Policy that comes with a highly valued life cover.

When investing in ULIPs, keep in mind that choosing a life cover which is 10 times of your annual premium is a must. This will help you to avail tax benefits provided by ULIP in the form of tax deductions. Opting for a tax saving plan helps you to avail a tax deduction up to 1.5 Lakhs under section 80C.

One thing that you need to remember is that you need both your time and money in order to gain higher returns. With the right ULIP Plan and the right funds, you’ll surely earn enough in order to fulfill the needs of your family.

Stock brokers provide the service of margin against shares to the customers. Margin against shares act as collateral security to the broker and the client can use shares of the demat account as a margin for trading. This is a value added service and brokers do not charge for such service from their clients. Investors who hold shares in the demat account for long term can use such shares as security for trading and need not to worry about the finances that would be required for trading the stocks.

Ratio of Cash to Collateral

100% margin is not available to the customer to execute a trade. Stock brokers generally maintain a ratio of cash to collateral and accordingly they allow margin funding. Suppose the ratio maintained by the broker is 20:80 then the customer will have to maintain a margin of 20% of the total amount in cash with the broker.

Working of Margin Against Cash

• The customer makes a request to the broker to grant him margin against his shares in the demat account.
• In an off-market transfer, the broker transfers the shares of the customer from their demat account into his demat account for maintaining the margin.
• The transferred shares act as a margin and will be automatically transferred against the margin held by the broker’s depository.
• The broker calculates the collateral value of shares transferred after applying the exchange’s haircut.
• Before allowing the customer to use the margin against shares, the cash to collateral is applied to the total calculated collateral value.
• The customer has the time period of T + 2 days to arrange the funds for buying the stocks, till then the margin granted can be used for trading.
• The broker has to transfer the shares to the customer’s account if the customer no more needs margin.

Charges

• The service of margin against shares is free of cost and brokers do not charge any extra fees for the same. Even though this value-added service is free but the customers are required to pay for the off-market transfer of shares. Generally the charges are Rs. 60 plus GST.

Dividend on Shares Transferred As Margin

• When the customer transfers his shares as margin to the broker’s account, he still holds the ownership rights on the shares. Therefore, the customer shall be entitled to benefits like dividend, bonus share, voting rights, etc.

Points To be kept in Mind

• The customers can find the details of the approved shares eligibility and applicable haircut percentage from the broker or on their official website.
• Stock brokers these days do not ask for the cash to collateral. The eligible margin amount is arrived after deducting the percentage of hair cut from the value of shares pledged.

Conclusion

Margin against shares in the demat account is an important service for those customers who indulge in regular trading in the stock market. On demat account opening, every customer becomes eligible for this value-added service by the broker. Anyone who is new to the market and wants to know demat account opening procedure must read “What is the procedure to open demat account”.

Life Insurance is no longer considered as a rigid investment. The reason behind it is the introduction of Unit Linked Insurance Plan [ULIP]. These ULIPs are a fix for those investors who are not only looking for wealth creation but also protection of insurance. Right from the time they have been introduced, ULIPs have impressive sale numbers which makes the other insurance plans less likable.

On the other hand, before investing in ULIPs every investor thinks twice. This is simply because of the perceived notion of ULIPs being expensive, risky, and so forth which makes the investors skeptical about it. While some of these perceptions might have been true in the past, today, they are only considered as misconceptions. Hence, take a look at these 6 common ULIP investment myths in order to gain maximum benefits from it:

What is ULIP Plan?

When you invest in ULIPs, you simply make sure that your insurance and investment is protected. A ULIP Plan ensures not only the protection of your family but also investment in equity markets for the growth of your money. Whether you’re saving up for your emergency purpose or planning for an early retirement, ULIP Plans will see to it that all your financial goals are met.

Six Myths about ULIPs and their truth

Myth 1 – ULIPs are expensive

One of the most common myth about ULIP Plan is that it expensive. Before you label it as expensive, it is always advisable to understand the structure of a ULIP. Investing in an online plan is the best possible solution as it brings down the cost of ULIPs. The absence of distribution charges and agent’s commission brings down costs significantly.

Myth 2 – ULIPs only offer market linked returns

Another prevailing myth about ULIP Plan is that it only offers market linked returns which makes it a risky business. However, this is not the case as a ULIP plan offers multiple fund options. Before purchasing a plan, you are always given a choice about the type of fund you want to invest in. Later, you can pick from the diverse choices of equity, debt fund or balanced fund. You also get a high Sum Assured amount in case your investments take a hit due to market performance.

Myth 3 – ULIPs cannot be surrendered before the maturity date

Majority of investors believe that a ULIP investment cannot be surrendered before its maturity date. However, this is absolutely wrong as the investor has the right to surrender the plan before the date of maturity. While you can surrender it before the maturity date, it is advisable to do so only in cases of financial exigencies.

Myth 4 – ULIPs do not garner higher returns

An untold truth behind investing in ULIP Plans is that it offers good returns. However, these returns depend on the type of fund that you invest in. Therefore, invest in a sensible yet a proper selection of funds for maximum benefits. The right fund selection will allow you to build the funds as well as an insurance cover.

Myth 5 – ULIPs fail to provide a life coverage

The maximum benefit that one can receive from ULIP Plan is its life cover. A life cover is basically the sum insured or the fund value of the investment, whichever is the higher one. This life cover will typically ensure that all the needs and dreams of your family are fulfilled, even without your presence.

Myth 6 – Investment in ULIPs is risky

Another reason why people are afraid of investing in ULIPs is because of the notion of being risky. However, ULIPs are considered as the safest alternative as compared to other investment plans. Unit-Linked Insurance Plan offers you with a choice for selection of the fund based on your risk-bearing appetite. If you are capable of bearing risk to that level only then you should invest in it.

Lack of knowledge and understanding definitely comes in the way of investing in a ULIP Plan. This definitely gives rise to questions like ‘Why should I invest in ULIPs?’. With these six common myths busted at the right time, let your ULIP Plan serve you and your family till the very end.