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Mutual Funds

Should You Choose SIPs Over Fixed Deposits?

A Systematic Investment Plan Mutual funds / SIP Mutual Fund is a way of funding mutual funds where people deposit small amounts frequently over time. Besides, a Fixed Deposit (FD) is an asset option where people can deposit a certain sum of money for a specified term and get back the share along with interest upon maturity. Let’s compare SIP Mutual Fund and Fixed Deposit. And for this comparison, let’s see what these terms are. [B-01] What is a Fixed Deposit (FD)? FD is an investment method that permits people to deposit a certain sum of money for a fixed period. Banks and Non-Banking Financial Companies (NBFCs) deliver this service to the public. In the case of Fixed Deposits, you cannot break the FD before its maturity date. If you wish to split your FD, you will have to pay a certain sum of money as charges to the Bank/NBFC. On fulfilment of the FD term, the whole amount invested, along with interest, will be credited to the person’s account. Benefits of Having a Fixed Deposit: The primary advantage you can gain with an FD is that it guarantees secured investment returns. A fixed deposit asset is risk-free. It shows flexibility to the people funding as they can pick the amount and term they want to sustain. You can sell your FDs in a crisis, or the investors can make an overdraft escape. Using your FD, you can apply for a carload and become suitable for applying for a credit card. This benefit can satisfy people who do not have a credit record or have just begun earning. What is SIP? Systematic Investment Plans (SIP) are an asset that permits people to deposit small amounts of money every month. SIPs can be considered goal-oriented assets and might act as stepping stones for newbies with mutual funds. People can choose to invest in their amenities. With the help of SIP, people can plan for future objectives and fulfil dreams like buying a house or car, preparing for the higher education of children, etc. People can start their SIP investment with a sum of money as low as Rs. 500. Benefits of SIP Mutual Fund: Individuals can make investments counting on their requirements. It is easy to make a SIP mutual fund, and a premium feature is that you can chase how the assets are accomplished at your amenity. SIPs eradicate the demand for investors to scan interest rates because you can create investments regularly. Tax concessions are another great advantage proposed by SIPs. People who fund SIPs for more than a year can relish tax concessions. In SIPs, money can be financed and drawn at any time as SIPs are in open-ended reserves. Each month a set amount will get deducted from your savings account towards the mutual fund you have chosen. SIP mutual fund lets you enter the market with small routine payments and takes the load off of making notable lump sum investments. Those funds may serve well initially, but a fickle market can never assure anything. For instance, the fund you have invested in starts constantly underperforming for two to three years. Diversification is crucial if you want the highest return from your investments. And the diversification of assets becomes easier with these investment plans. It is most suited for people who can make small but frequent payments from their disposable income. Always be picky in choosing funds and ensure you do not have an excess number of equity mutual investments. If you know how to fund in SIP and have invested a significant portion of your savings, your returns will unfailingly be zeroed down. It may even go down to negative. That is why long-term equity assets are always better, as market kinks are fixed over time. Thus, it is advisable to stay funded till the market smoothes out. Moreover, it will lower the general return your fund is anticipated to earn. Leaving midway will make you skip out on many good market days that could have brought you quite a high return. Typically, the money is auto-debited from your bank account and is funded into the specific mutual fund plan you had already purchased. This assigns you a certain number of units relying on the market value of your funds (Net Asset Value or NAV) for the day. Which one is better for your investment purposes? SIPs and FDs have their advantages and deliver a lot to those looking to invest. Though the benefits look alike, there is a stark contrast between the two. Let us take a look at what makes them diverse and which alternative you should pick: Investment Rates Starting an investment plan is accessible in both choices when looking at the investment type. SIP Mutual Fund has an added advantage where people can begin funding even with a small sum of money. The SIP asset frequency can also be set monthly or quarterly to suit an individual’s needs. In the case of a Fixed Deposit, an FD lets a person fund in a lump sum. Interest Rates The rate of interest presented in SIPs is higher than that of FDs, but it does not ensure you the best returns. It would be best if you believed the risk linked to the returns. On the other hand, with a fixed deposit, you are sure to get higher returns irrespective of the amount funded in the FD. Tax Benefits Tax saving is essential for everyone. A few investment plans provide tax benefits. Another type of FD that many don’t know about is Tax Saving FD, through which one can claim a deduction on specific investments. In the case of some Systematic Investment Plans, only a particular percentage of the tax will be imposed on the person who is investing money. [B-02] Conclusion Though FDs are the safest choice if you want to invest, Systematic Investment Plan Mutual Funds can also be helpful when you put your hard-earned money to riskless use. After understanding and considering all the risks, you can invest in SIP. Get the best advice regarding all financial products and banks from your well-wisher and financial expert, Piramal Finance. Investing in SIPs is profitable, and our experts help you understand your credit score and how to maintain a proper fund management portfolio. This enables you to choose the best personal loan for yourself.
08-11-2023
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Mutual Funds

Grow Your Money – The Best Mutual Funds in India

Mutual Funds A mutual fund is an investment scheme. SEBI (Securities and Exchange Board of India) regulates India’s mutual fund operations. Experienced professionals manage mutual fund companies. They work by collecting money from several investors, such as you. Then, the fund managers use this money to buy different securities. These include stocks, gold, government bonds, or a combination of these. The goal of the fund managers is to generate profits for the investors. The best mutual funds use their money in such a way that the possibility of good returns is high. The income generated by a mutual fund is distributed among all the investors. [B-01] Why Should I Invest in Mutual Funds? Maybe you think, “saving in a bank account will also make me money.” Unfortunately, savings account returns are low. They are even lower than the rate of inflation. So you’ll be losing money in the long run by relying on your bank account. Mutual fund investing has now become a popular choice among people. These funds offer many features to the investor. Mutual funds are a fairly safe option to invest your money. They usually give good returns over a long period. With mutual funds, your money is under professional management. The fund managers do the research and select the companies to invest the money in. They track the progress over time. So you do not need to put in any time or effort. Mutual funds are very affordable. You can start investing in some of the best mutual funds with INR 1000. Funds invest in many companies and industries. So your investment is diversified and less susceptible to market risk. Another reason to invest in mutual funds is liquidity. You can sell your mutual funds whenever you want to. The fund’s current Net Asset Value (NAV) will be credited to your account. Types of mutual funds in India Mutual funds are divided into different categories. This is based on the guidelines given by SEBI. According to their asset class, mutual funds can be divided into three types. Equity funds Equity mutual funds take your money and invest it in the stock market. These mutual funds are considered to be high-risk investments. These investments are directly linked to stock market volatility. Large-cap funds invest most of their money in the top 100 companies in India. Mid-cap funds invest most of their money in Indian companies that rank from 101 to 250. Small-cap funds invest most of their money in small companies that are ranked beyond 250. Flexi-cap or multi-cap mutual funds are flexible with their investments. They invest in both small and large companies. The fund managers focus on the growth potential of different companies. Index funds are an excellent investment option for beginners. These funds match the performance of Sensex and Nifty. Sensex and Nifty 50 are the two indices of the National Stock Exchange in India. Fixed income or debt funds These mutual funds invest your money in government bonds, corporate bonds, and debentures. Fixed-income funds help generate regular returns for their investors. So, you can consider investing in debt funds if you need to make some regular income. Make sure to know about the risk profile of a debt fund before investing your money. Hybrid or balanced funds Hybrid funds invest your money in different places. They invest in stocks, corporate bonds, and government bonds. They can also include other financial instruments. Hybrid funds try to reduce the investment risk for their investors. There are two types of hybrid funds. Equity-oriented hybrid funds invest most of their money in equities. The remaining amount is invested in debt instruments. Debt-oriented hybrid funds invest most of their money in debt instruments. The remaining amount is invested in equities. How to Invest in Mutual Funds You can open your account in mutual funds using both online and offline methods. Maybe you’re more comfortable with the offline method. To do this, complete your application form for the fund. Prepare a cheque or bank draft. Submit them at the branch office or at the designated service centre of that mutual fund. An easier method is to invest in mutual funds online. You can log in to the website of the mutual fund you want to invest in. Follow the procedure given on the website. Make the payment, and now you are an investor. There are two ways to invest money in mutual funds – Lump sum and SIP. A lump sum is a one-time payment method for mutual funds. The investor purchases the required number of units of a particular mutual fund. Additional units are not purchased regularly. A Systematic Investment Plan (SIP) is a repeated payment method for mutual funds. You can invest a fixed amount of money in a particular scheme. This investment is repeated at regular intervals. This disciplined investment option works great for salaried employees. [B-02] A Concluding Note Investing in mutual funds can seem tricky for beginners. But don’t worry. There are several free online resources available for you. So, learn the basics and lay your foundation. Then you can continue to upskill yourself and grow your finances. There are many types of mutual funds in the Indian market. Understand and compare their risk profile and their return on investment. Make an informed decision based on your requirements. You can also consult a financial advisor initially and find the best mutual funds to invest in based on your risk profile. If you have any doubts or need help with your finances, you can always consult the experts at Piramal Finance. Visit the Piramal Finance website to learn more about their products and services.
08-11-2023
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Health Insurance

When is the Right Time to Buy Health Insurance?

Reports suggest that most Indians still pay for medical expenses on their own. A medical insurance plan may not cover every medical expense. NITI Aayog reports that India has about 42 crore people who don’t have any such plan. Hence, most people still don’t have access to quality healthcare, which they either can’t afford or aren’t insured for. In recent years, though, India has made a name for providing modern and affordable healthcare. However, medical costs are on the rise (medical inflation), which means you must buy a medical insurance plan at the right time and age to avoid spending a fortune from your savings during a health emergency. Continue reading to learn more about when it is the right time to buy a health insurance plan. [B-01] What is a Health Insurance Plan? A health insurance plan consists of policies that provide medical protection. It is a sort of contract between you and the insurer that binds the latter to pay for your treatment or surgery when you are ill or injured. It covers some or all of your healthcare costs. You have to pay a monthly or yearly premium to get insured. These plans work in two main ways: They either pay you the costs incurred as insurance or pay the doctor or hospital directly. Why Do You Need Medical Insurance Plans? Covid-19 was an eye-opener for the whole world. It made people realise that an emergency never knocks on the door. Our general lifestyle has also changed a lot. Hectic work schedules, bad eating and sleeping habits, etc. are affecting health negatively. For instance, it would not be surprising to find young people who have heart-related problems. According to a report by Motilal Oswal Financial Services Limited (MOFSL), among other Asian economies, India witnessed the highest medical inflation rate of 14%. This is reflected in another finding by the same org: Prevailing High Demand for Health Insurance in FY2022. Hence, rising healthcare costs, coupled with a sedentary and stressful lifestyle means having a plan to rely on during times of medical emergency is critical. A medical insurance plan is your financial security against sudden health problems. Buying such a plan is an important aspect of financial planning and independence. What Does a Great Medical Insurance Policy Offer? Your quest to know about the best medical insurance plans won’t end until you know what to expect from them. There are a ton of different medical insurance plans in the market, all designed to meet the unique needs of individuals, depending on age, sex and lifestyle. Since all medical insurance policies don’t cover every aspect of a medical emergency, it is critical to choose plans that do cover the maximum possible area of expenses or at least those required by you. Here are some of the basic features of a great health plan: The policy should cover hospital expenses. For individuals, a sum of five lacs is the minimum. Group policy amounts should be up to 20 lacs. Pre and post-hospital admission charges must also be a part of it. The policy must also provide cover for the treatment of mental illness. Choose a policy with no room-rent limit. It will ensure that you get the best possible room facility. It should cover daycare procedures like surgery, dialysis, etc. The policy must also provide for a cap on ICU room charges. No-claim bonus is another important feature. It helps if you didn’t claim insurance in a year. You will pay a lower premium next year, or the insurer might extend your coverage time. You might also get a higher cap depending on the vendor. Choose a plan that does not force a co-payment option. It means you will not have to pay part of the medical costs. The insurer will cover everything. This way, you need to only focus on recovery. Refill benefits must also be a part of the policy. It means that you can use your sum more than once a year. This is especially useful during pandemics like COVID-19. Zone upgrade is another big benefit. You might be in Zone B or C city. The policy must provide an upgrade. This way, you can get treatment in a great hospital. When is the Right Time to Choose a Health Insurance Plan? There is no fixed answer to this question. You can buy a medical insurance policy after turning 18 in India. Your family can include an underage person in a group policy. Senior citizens can also avail of medical insurance plans for themselves. However, the premium that you have to pay depends on your age—the lesser the age the lesser the premiums you pay. It also depends on your financial status. Hence, you can follow this piece of general advice: You should buy a medical insurance policy when you become financially stable. Most corporates provide such policies to young professionals. This practice is now a common part of corporate wellness programmes. The Benefits of Buying a Medical Insurance Plan Before You Turn 30 Insurance providers cannot predict your risk of disease or illness. So, they use your age as the main factor to determine risk. Generally, you are at a higher risk in your 40s and 50s. So, in your 20s, you will pay a lower premium. If you are over 60, the premium is very high. It is almost four times that for a 25-year-old. The math is simple. Moreover, these policies also come with a 30-day waiting period. It means that you cannot claim until 30 days. It is more possible for a young adult to pass through this period without any potential complications. Furthermore, if you are young, you do not need to undergo a medical test. Insurance providers do a test for older people. They do this to point out specific health conditions. The amount of your cover is then decided on that basis. You also get tax rebates under Section 80D of the Income Tax Act. This happens if you can show proof of a premium. If you are young, it will increase your savings. These policies also provide general healthcare check-ups every year. It is a crucial step in trying to live a healthy lifestyle. Regular checkups can help in the timely diagnosis of a severe problem. [B-02] You must ensure that your policy includes a no-claim bonus. This is because, if you are young, you will not fall ill every year and can pay a lower premium next year. In some cases, you can also get a higher claim amount. Most young people are suffering from work-related stress. You can avail of therapy and medication using your healthcare policy. Most insurers provide coverage for this.
08-11-2023
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Know More

Want To File A Home Insurance Claim? Follow These Simple Steps

Taking an insurance policy on your home helps you in protecting your investment. Your home can get damaged due to weather conditions, fire, theft, or even by a third party. In these circumstances, an insurance policy will come to your aid and help you reduce your expenses. You must file a claim with your insurer if you are in any of these situations. Filing a home insurance claim is easy. You need to submit the required documents and evidence of damage. If you cannot stay in your damaged home, you can also claim to pay for your temporary accommodation. [B-01] Steps To Follow For Making Your Home Insurance Claim As you have understood the importance of having home insurance and what it protects you from, here’s the process for filing a claim. File a report to start your insurance claim process – The first step in filing a home insurance claim is to call your insurance company. You should contact them as soon as you notice damage to your home. All major insurance companies have 24/7 customer support. You can call them anytime to ask for proper guidance to file a claim. Inform your insurer clearly about the nature of the damage and follow their guidelines to complete the process. Keep the required documents ready – You will be asked to submit some documents to process your claim. You need to keep all these documents prepared to support your claim request. If you cannot provide any documents as required by the insurance company, then there is a good chance that your claim might be rejected. A duly filled claim form FIR or Fire Brigade report (in some cases) Building plan KYC documents A signed, cancelled cheque (to receive the approved claim amount) Bills or receipts from contractors Collect evidence to back up your insurance claim – You need to back up your claim with proper evidence. Submitting the right evidence is crucial, as it will help you to get your claim approved. You can take photos and videos of the damage sustained by your home and submit them as evidence. CCTV footage is also a good piece of evidence. The evidence can be used in court to file a case against the insurer if your claim is rejected. You can also use the evidence against any third party involved in the damage. Involve proper authorities – If your home gets damaged due to fire or theft, you should notify the appropriate authorities. You will need to submit the official reports with your claim application.<br>In case of theft, an FIR must be filed at the local police station. Always mention the correct value of your belongings in your FIR. Do not provide misinformation, as there will be an official investigation into your case. If your home has been damaged by fire, notify the fire department immediately. You must take a copy of their official report and submit it to your insurer. Damage by the third party – If a third party has damaged your home, you can make them pay for the repairs by filing a claim. All you need to do is inform your insurer, and they will take it up with the third party’s insurer. You must submit proper evidence to support your claim to get compensation from a third party. You can prepare a witness list, show photographs and submit video footage as evidence. If the third party raises a dispute against the claim and there is no amicable solution, you can approach the court for compensation. Send an estimate to your insurer – This is another critical step in your home insurance claim process. As a homeowner, you will need to send an estimate for repairs to the home to your insurer. This estimate needs to be sent while filing the claim. Call a contractor to assess the damage and get an estimate from him. A reliable contractor will help you get an accurate estimate for the cost of repairing your home. Send this estimate to the insurer with your claim form and other documents. It is a good idea to start the repair work after getting the go-ahead from your insurer. Also, keep the contractors’ bills and receipts handy so you can submit them if needed. Visit from the Surveyor – The last step in the home insurance claim process is the appointment of a surveyor for your claim. A surveyor will be appointed to assess the damage and verify the claim. A few things you should remember when the surveyor visits your home for an assessment are Provide factual information to the surveyor, as wrong information can cause your insurance claim to get rejected. Give details of how the damage was caused and back your story with evidence. Do not hide any crucial information regarding the claim from the surveyor. Always give the correct estimate of the property loss or repairs. Do not exaggerate the property price to claim higher compensation. This might lead to claim rejection, and you may even face legal issues. [B-02] Conclusion Every homeowner should take a home insurance policy to protect their investment. Your home insurance policy will protect your home from damage due to burglaries, fire accidents and weather conditions. If your home has suffered any damage, you can report it and submit a claim form for compensation. The process for claiming compensation is simple. You must present proper evidence to support your claim and submit some documents. Just remember to provide accurate information so that your claim gets approved quickly. If you want to learn more about the home insurance claim process or if you want to explore different home insurance plans, visit the Piramal Finance website. You can ask for assistance from finance experts and get your queries answered.
08-11-2023
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Cards

How To Apply for Credit Card Online In India?

Credit cards have unlocked a world full of possibilities. From mobile phones to your favourite designer clothes – any online purchase today is one swipe away. Most importantly, credit cards allow you to shop without worrying about fund availability. Credit cards are also helpful for those who need urgent funds for hospital emergencies etc. This article will help you understand the process of applying for a credit card online. To begin with, let us explain the eligibility criteria for getting a credit card: Credit cards are issued to customers above 18 years of age. To qualify for a credit card, you must have a constant income source. With this understanding, let’s check the steps to follow to apply for a credit card online. The market is flooded with credit cards offering a range of benefits. You need to know which card is perfect for you. But first, you must learn how to apply for a credit card. [B-01] Things to Consider While Buying a Credit Card Before you apply for a credit card online, find out which card fulfils your requirements. Choose between low interest, 0% Annual Percentage Rate (APR), and rewards. A credit card with low interest While choosing a credit card, make sure it has a lower-than-average annual percentage rate (APRis the interest rate that one should pay after borrowing money. For credit cards, the rates are generally mentioned as a yearly rate). It is ideal for one who expects to maintain the balance in their account, as they would have to pay less because the interest rate will be less. A loyalty card: Based on the percentage of expenditure, they generate offers in the form of cashback, points, or miles. The offers provided by the credit card company will differ according to the occasion. Different kinds of Credit Cards There are different kinds of Credit cards that one can choose from: Flexible Reward Points This kind of credit card offers you cashback or points depending on the percentage of recent shopping you did. It may include several categories like Dining out, groceries, filling up gas etc. This may provide you with many offers too. Cashback Cashback credit cards are a good choice for instant rewards and cashback. These kinds of credit cards get instant cashback to your account rather than using any rewards in the future. Travel Credit Card Such credit cards get you many offers related to travelling. So if you are a frequent traveller, this might be the perfect credit card for you. Business Credit Card These credit cards are used to keep private and business expenses separate. These can act like cash back, travel, and general reward credit cards. Secured Credit Card These kinds of credit cards are backed by cash deposits and are therefore called secured cards. Whenever you fail to make payments on your credit card, the deposit will serve as collateral, providing the issuer with security. These are the fastest credit cards to get approved and can also be used to improve credit scores. Student Credit Cards Such credit cards are granted to young people with limited credit history. These kinds of credit cards are also easier to get approved. Co-Branded Co-branded cards are a result of alliances between merchants, networks, and issuers. They offer you good deals and interesting choices. Store Credit Cards Credit cards issued by high street chains or groups are called store cards. One can only use such cards in certain places. How To Apply For A Credit Card Online It is pretty simple to apply for a credit card on a banking website: Step 1: Go to the website’s ‘Credit Card’ page and select a card according to your need. Step 2: Click ‘Apply Now and complete the application form. Step 3: When you click on ‘Submit’, you will receive an instant mail for your application based on the information you supplied. Step 4: If your application is approved, you will be contacted by a bank representative for verification. The card will be issued to you after the appropriate confirmation. The documents required to apply for a credit card are as follows: Documents for identity verification include a voter identity card, a driver’s license, a pension book, a ration card, or a passport as address proof. You may also require a passport-sized photo and a PAN card copy. This will vary depending on the bank and whether you have submitted KYC with your savings account.If the credit card application is rejected in any case then it can be due to multiple reasons, such as: • Incomplete Verification or KYC • Low Credit Score or CIBIL score • Ineligibility in income • Age Eligibility, etc. What is a credit Score The CIBIL is an agency approved by the Reserve Bank of India(RBI). It helps people to calculate their credit scores by checking the CIBIL score. CIBIL stands for Credit Information Bureau(India) Ltd. With the help of the CIBIL score, one can always check their creditworthiness. This score summarizes one’s credit history, the total amount of credit one has taken, how they have repaid, and other factors. [B-02] Conclusion Applying for a credit card online in India is not hard but choosing the right one is. So you should always think about your daily needs and, according to that, apply for a credit card. Maintaining your credit score after obtaining a credit card is also equally important. Head to the Piramal Finance website to find out more. Piramal Finance is a leading name in the field. Experts can help with any queries you may have.
08-11-2023
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Cards

Pros And Cons Of Credit Card

With the rise of consumerism in the modern world, credit cards are often seen as a sign of being financially independent. This is because a credit card offers you the additional funds you may require to meet any requirements – essential or otherwise. Moreover, the flexibility of usage and freedom to swipe the card whenever you desire to buy things you want, pay the food bill at an expensive restaurant, or even embark upon a foreign trip has made credit cards one of the favored payment gateways. All the banks have credit cards in their product line and an online credit card application process by filling up the application form with some essential KYC documents. In addition, various banks offer attractive schemes, which become challenging to overlook. More often than not, you may find yourself in front of an online credit card application platform. However, it would help if you weighed your options before using your credit card. While a credit card may genuinely come in handy in some emergencies, it may also increase the load of your borrowed fund. Therefore you must make yourself fully aware of the pros and cons of credit cards before using them. [B-01] What is a credit card? A credit card is a pre-approved limit given to you by a bank. It comes in the form of an intelligent plastic rectangle flashing the issuing bank’s name on its face. You have the liberty to use the limit granted to you. The limit given on the credit card enables you to make purchases and even avail of certain services. Credit cards are not linked with any bank account; hence the usage of the card does not disturb your bank account balance. The amount spent on the credit card gets deducted from the credit limit. Your credit limit depends on your income and credit score when issuing a credit card. Pros of using a credit card: In the following section, we will look at the pros of having a credit card: 1. Convenience in shopping: Credit cards make your shopping hassle-free. With the help of your credit card, you need not move out; you may choose the items you want to buy and make online payments through your card sitting in your home. You acquire the materials you wish to and save on your cash flow as credit cards don’t hit your bank balance. Also, most credit cards allow you to purchase and repay in equated monthly instalments. So if you are salaried, this may be an ideal way to buy things of your choice. 2. Alternative for cash: If you have a credit card, there is no requirement to carry cash. Instead, you have the choice of making purchases by swiping your card. Credit cards issued by leading banks are accepted everywhere. All you need to do is to enter your PIN after the card is lifted in the POS and walk away with the things you have bought. 3. Win rewards: Every credit card issuer runs reward schemes for its users. Apart from the rewards, there are cashback offers to give you an instant discount on a product or service you buy through a credit card. For people who travel extensively, features like travel insurance and access to the airport lounge come in handy. In addition, co-branded credit cards offer discounts when you buy fuel for your vehicle. 4. Cash withdrawal facilities: You may use a credit card to withdraw cash from an ATM. However, while doing so, please remember that cash withdrawal facilities on your credit card will fetch some charges you must pay along with the dues. 5. Meet emergency expenses: Credit cards come in handy when you are required to spend some money that is not pre-planned. A typical example of such a situation is when your near ones need an emergency fund for some urgent medical treatment. Unfortunately, you may not have the time to withdraw cash or apply for a personal loan and swipe your credit card to meet the fund’s requirements. 6. Proves creditworthiness: Timely repayment of credit card dues and diligent use of the card positively impact credit rating agencies. This may go in your favour if you are looking for additional funds as a loan to meet some financial obligations. Cons of using credit cards: While we have discussed the pros of using a credit card, there is another side. Let us have a look at some of the cons of using credit cards: 1. High cost of borrowing: The interest rates charged on purchases with your credit card are considerably higher. In addition, there are service charges which are levied on your dues. Therefore, even a slight delay may fetch a penalty making your repayment much dearer. 2. Makes you spend more than you need: The credit card in hand often leads to a debt trap. You have the freedom to spend even if you do not have money in the bank, which gives you that false comfort. Unfortunately, people often go overboard, spend much beyond their means, and find it challenging to repay. Once you get into the rut of revolving credit, you pay interest upon interest while your outstanding remains almost the same. 3. Negatively impacts your credit rating: You never know when you may require additional funds to meet some necessities. If you have overspent on your credit card and do not have a clean repayment record, it goes against you. This will have a direct impact on your credit rating. It will become very challenging for you to avail of any loan in the future as any lending institution will refer to your credit score before processing your loan application. Credit cards have become a part of our lives, and there will be situations where they will be used. Therefore, one has to be diligent and use credit cards with discretion. [B-02] Conclusion: One may conclude by saying there will be situations where additional funds may be required at a moment’s notice. Credit cards come in handy in those situations. You may make high-value purchases on your card and repay the same in instalments. At the same time, you need to show responsibility in your spending pattern. Overleveraging on your credit card will hit your financial plan and will impact your creditworthiness negatively. Please apply due diligence before swiping your credit card next time. There are online platforms like Piramal Finance that will help you better understand this.
08-11-2023
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Health Insurance

All about co-payment in health insurance

Do you own health insurance? If not, you must. The high medical costs can be heavy on your savings. The health coverage will take care of the medical expenses. Hence, no money stress. Also, you don’t have to worry about the future of your dependents. In case of an unfortunate event, the sum assured will take care of their finances. But these perks are not for free. The insurance company will charge a premium for these. The premium amount depends on how much coverage you want. It will also depend on your health issues. Now, you may need a higher level of coverage. But, you may not be able to afford its premiums. In that case, you can opt for a co-payment clause. Many insurance companies offer them. This article will help you understand the meaning of co-payment in health insurance. [B-01] What is Co-Payment in Health Insurance? Under this method, the premium payment is paid by two parties. One is the Insurance company. That is common. But, the other is the insured. You may be used to the idea of an insurance company taking care of all medical expenses. But this is not the case with co-payment in health insurance. You need to bear a part of the medical cost. You must pay this cost every time you take a health service. Now, you may wonder how much you need to pay. The amount is set in your policy. Mostly, you only need to pay a small amount. Here is an example: Your medical bill comes to Rs. 20,000. Your co-pay part in the policy is 10%. Then, in this case, you need to pay Rs. 2,000. The Insurer will pay Rs. 18,000. What are the features of Co-payment in Health Insurance? Both the insured and insurer pay the premium. The insurer pays the major cost. The risk is low for the insurer. The co-pay may vary with the risk and premium. It is more common in big metros. Advantages and Disadvantages of Co-payment in Health Insurance Now, let’s know the pros and cons of co-payment in health insurance. Pros Low premium: You may have just started working. It may be you have other payments lined up. Hence, you may not have spare funds to pay for premiums. Under co-pay, you only need to pay a part of the premium. The major cost is taken care of by the company. Hence, you get a good cover at a low fee. Better discounts: Under co-pay, the insured also pays a set fee for the health costs. Hence, the risk of insurers is low. Thus, they may offer some perks like discounts. You may get a better deal on the cover. Less risk: This pro is for insurance companies. The insurance company’s loss depends on how many claims they have to settle. Higher the claims, the higher the loss. With you paying a part of the premium, their claim liability reduces. They don’t need to pay the full cost of claims. Hence, the overall risk is low. Only relevant claims: It is common for the insured to file claims for small health issues also. Like, a cold or cough. Now, claims require heavy paperwork and relevant documents. Hence, it’s not a simple process. With more paperwork needed, it will prompt them to file honest claims only. Reasonable health care: If you go to a high-end place for your health care, it will charge a bomb. But, if you go to another facility, they will charge a nominal fee. When insurance companies pay the bills, insureds may opt for more luxury care. But, under co-pay, they must pay a part of the bill. Hence, they are more likely to go to the local health centre. Cons You are aware of the pros. Now, let’s talk about why co-payment in health insurance may not be the right option. If you have a critical illness: It may be that you suffer from a critical illness. So, you need regular health checkups. If you opt for a co-pay, you must pay a part of the cost. Paying a small cost every time will become high. Hence, it won’t be useful anymore. It will become a debt. You may be paying more than the premium amount. It will be better to opt for a specific critical illness cover. If the co-pay cost is too high: Medical costs are expensive. Hence, you opt for health coverage. The insurance company takes care of the health costs. Co-pay clause makes you pay a share. But, if it’s too high, the cover is not worth it. The point of taking coverage is that you need support for paying basic medical costs. A hefty co-pay will hamper the whole idea. If the insured is aged: This point is similar to the critical illness one. As you grow older, you may require more health care. Hence, this means more medical costs. In other words, high risk. It won’t make sense to opt for a co-pay in such a case. [B-02] Final thoughts The above blog helps you understand all about co-payment in health insurance. It has its pros and cons. But, it should not be the only basis for picking a policy. There are many things to consider. Know the claim process, inclusions and exclusions of the policy. Also, you must look at your lifestyle. Are you healthy with no past medical history? Then, the co-pay policy is a good pick. If not, pick a policy without it. Now, you may need finances for its premium payment. Apply for a personal loan. Consult a financial expert like Piramal Finance. They can help you pick the right loan. If you are working, you can opt for a professional loan.
08-11-2023
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Health Insurance

Overview of Parent Health Insurance

A crucial part of managing your finances includes planning for insurance. Health insurance provides the best medical care in times of need. It has become a necessity, especially after COVID-19. Let us understand why planning for your parent’s health insurance – apart from your family floater and employer’s cover- is essential and how to go about it. [B-01] Why should parents’ health insurance be different from family’s? The risk of more incidences of ill-health and age-related conditions makes proper health insurance vital for your parents. Health insurance premiums are derived from the age of the oldest family member. The probability of your parents getting hospitalised is higher than you getting hospitalised. If they are on the same plan as the rest of the family, you would be paying a higher premium for that coverage. For example, your father is 60 years old, and you are 30. Your father’s age will decide the premium. Since he is more likely to get hospitalised, you will pay a lot more. To avoid this, you must have an individual health insurance plan for your parents. Things to look out for in parent’s health insurance 1. Sum assured- Check the amount of the sum assured in your parent’s health insurance policy. It should be adequate, especially considering the increasing cost of healthcare. 2. Hospitalisation expenses- The insurance company can cover expenses in an unfortunate event like an illness or surgery. This includes doctor visits, tests, and other ancillary services. Many insurance companies have a cap on room charges, which is undesirable. If you live in a large city, the room charges, especially in private hospitals, are high. Thus, you need to ensure adequate coverage based on room charges. 3. Pre and post-hospitalisation expenses- When hospitalisation or surgery is pre-declared, the insurance cover provides all your expenses from preparation until recovery. Some insurance providers may exclude the expenses incurred once you are discharged from the hospital. This is not a good sign. An insurance policy that covers post-hospitalisation costs for one or two months is desirable. 4. Pre-existing diseases- Your parents may have medical conditions like blood pressure, diabetes etc. These conditions may be present at the time of buying health insurance. How the insurance policy takes care of it is an important point. Typically, there is a waiting period for pre-existing diseases (PED), which ranges from 1 year to 4 years. Your parents’ insurance plan will not cover any of their PED. Some insurance providers might offer coverage but charge a sizeable premium. So, you need to choose the one with the shortest waiting period whenever you select a plan. 5. No-claim bonus- If you do not claim anything in one year, meaning there was no hospitalisation or you did not utilise the insurance cover, then you are eligible for a no-claim bonus in the increased form of your cover. Usually, this is 5%. In other words, if you have taken an insurance cover of 5 lakh rupees and you have not claimed anything for one year, at the end of the first year or the beginning of the second year, the company will give you a no-claim bonus of say, 5% which is Rs. 25,000. So next year, for the same premium, you will get a cover of Rs. 5,25,000 instead of Rs. 500000. 6. Claim settlement ratio- Compare the claim settlement ratio of various insurers before choosing a plan. The claim settlement ratio is the number of claims settled by the insurer divided by the total number of claims in a year. A claim settlement ratio above 90 is ideal. It usually indicates that you would not face problems while claiming your expenses. Health insurance for parents above 60 (Senior citizen’s health insurance) A senior citizen health insurance plan is specially crafted to provide medical aid to individuals aged over 60 years. The chances of medical emergencies arising at age 60 or above are high. Buying senior citizens’ health insurance ensures benefits like preventive health checkups and appropriate medical guidance. Difference between corporate and individual insurance plans Salaried employees are likely to have a corporate health insurance plan. These plans tend to cover the employee, their partner, kids, parents, dependents and in-laws. It provides excellent insurance coverage and should be taken advantage of. When you switch jobs, your insurance gets terminated. Moreover, if that health insurance included a PED waiting period, that too gets reset, and many people are unaware of this. The employer and the insurance provider decide the terms and benefits of the corporate insurance plan. This can be altered as and when the employer decides. Individual health insurance allows you to choose the best plan according to your requirements and needs. [B-02] Summing up There is no denying the fact that health insurance acts as a safety net in terms of medical emergencies. Another benefit is the tax deduction under 80D. Parents below the age of 60 can avail of the deduction up to Rs. 25000; for parents aged 60 or older, the cap is Rs. 30000. Along with these points, it is vital to consider the policy’s various terms and conditions while buying it to take maximum advantage. Want to gain an all round financial understanding of health insurance? Piramal Finance offers you accurate information on banking and financial services. Our financial experts help make sure your financial knowledge is up to date on essential services and products, such as personal loans and financial calculators. For more information, visit us!
08-11-2023
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Health Insurance

What is Cashless Health Insurance in India?

Anyone can have a medical emergency anytime, and it can happen to anyone. Not only can these things be hard on your emotions, but they can also hurt your savings in a big way. With health care costs going up, some diseases can cost lakhs to treat, which can wipe out your savings. You can’t know when an emergency will happen in the future. But you can be ready for that by getting the best cashless health insurance for yourself and your family. Most people in India buy life insurance but don’t know how important it is to have health insurance. The health plan protects you from all kinds of illnesses and diseases. It ends up paying for hospital stays and other costs. Most insurance firms in India offer two kinds of health insurance plans: Plans that reimburse you Plans that don’t need you to pay anything [B-01] What is a Cashless Health Insurance Policy? As the name suggests, a cashless health insurance policy is a kind of insurance in which you don’t have to pay cash for treatment. The insurance company directly pays the bill to the hospital. But the thing to understand about such a plan is that one can only use the cashless option at a network hospital. When you buy the best cashless health insurance plan, you must ask the insurance agent for a list of hospitals that are part of the plan. These details are also easy to find on the insurance company’s website and policy document. If you know the list of network hospitals in your area, you won’t have to worry about last-minute problems. You can get cashless services for Health Insurance for Seniors Family Health Insurance Individual Health Insurance Why having Cashless Health Insurance Policy is essential? People don’t always have enough money for their medical bills because of rising medical costs and crises like the current pandemic. In this case, a cashless health insurance policy is a big help because you can get treatment without having to find cash instantly. Make sure you get the treatment at a hospital part of your health insurance provider’s network. What are the Benefits of having Cashless Health Insurance? Financial relief: Everyone does not carry cash with them at all times. A cashless health insurance policy is a big help in emergencies because the insurance company pays the bills instantly. Medical emergencies: It saves you time and lets you get medical care based on your health insurance card. The cashless feature helps you keep your savings. Less documentation: When you have cashless health insurance, you don’t have to send in any paperwork, reports, or discharge sheets to get the amount you were insured for. Quick settlement: In this settlement, the insurance company transfers the amount to the hospital. So, there’s no waiting for the claim to be paid. Help in an emergency: There may be times when you have to leave the city by yourself for work, and you could get very sick. You may need to go to the hospital to get proper care in these situations. In this case, a cashless health insurance policy will help you by paying for emergency care at hospitals that are part of the plan. What kinds of claims can be made with a cashless policy? Planned claim: This is for when you know you’re going to the hospital at least two to three days ahead of time. In this case, you must complete all the pre-authorization forms before going to the hospital. These are sent to the insurance company, deciding whether the claim is valid. Emergency Claim: You can still use your insurance if you need urgent medical care because of an accident or a severe illness. In an emergency, the insurance company must be told about the treatment as soon as possible. Protocol says that the insurer should handle the claim within 6 hours. Things to consider while taking a Cashless Health Insurance Policy In emergency hospitalisation, instruct your family members to call or notify the insurer as soon as possible. Bring your original proof of ID with you to the hospital. Send the required medical and investigation reports to the insurance company. Give all the details regarding your insurance provider within the asked format. Rejection of Insurance Claims made without Cash Even if you send in the proper paperwork and choose a network hospital, your claim could still be turned down. Here are a few reasons why a claim might be turned down: Insurance doesn’t cover a specific illness. You have used up the amount of insurance for that period. The details on the form are not good enough. It took too long to tell the insurance company about a hospital stay. How do I avail my Cashless Health Insurance Policy? One of the best things about health insurance is paying for hospital stays without cash. This is useful for both planned and unexpected hospital stays. If you plan to go to the hospital, you must tell your insurance company at least 3 days in advance. The same must be done within 24 hours of being hospitalised in an emergency. This step is crucial so that the pre-authorisation approval can be made in time so that you can take advantage of the cashless procedure. To start the cashless claim process, you must give the hospital all the necessary details about the patient and the policy. The hospital will then share with the insurance company the treatment details. Then, they’ll check all the hospital’s details and send the hospital a pre-authorisation approval if the claim is valid. [B-02] Conclusion In today’s world, buying the best cashless health insurance plan is a great investment. It can pay your hospital bills due to an accident or illness. You can rest assured that the cashless option is available for medical and health insurance. It’s an extra benefit with your health insurance or mediclaim policy. It can help you save money and give you peace of mind when things go wrong.
08-11-2023
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