effect of demonetisation on life financial sector?

With the centre’s decision to scrap old currency notes of Rs 500 and Rs 1,000 on November 8, 2016, the financial sector is now bracing itself to deal with the move’s impact. Experts say that it is a good move as it will bring more formal money in the financial sector.


Banking Sector
Banks are providing exchange counters where you can exchange your old Rs 1,000 and Rs 500 denomination notes. All banks will remain open this weekend i.e., 12 and 13 November, 2016, to facilitate the exchange and deposit of old currency notes of these two denominations.

The maximum you can exchange in cash against old notes is Rs 4,000. For this you will have to provide a photocopy of an identity document along with a filled-up form. Do also carry the original identity document. However, there is no limit on the amount you can deposit in the form of your old notes. Also, you have 49 days – till December 30, 2016 – to exchange them.

To deposit money, you don’t necessarily have to go to your own bank’s branch. You can visit any bank’s branch, Reserve Bank of India (RBI)-specified offices and post offices to exchange the old currency notes. Your money will be credited to your bank account if you don’t want anything in cash.

Some banks have waived cash deposit charges in savings accounts till November 30, 2016. Some banks have also waived ATM transaction charges in same bank ATMs.

Mutual Fund Industry

Officials from mutual fund industry say that there is no doubt that money will come in mutual funds. Increased inflows into mutual funds are not an expectation; it’s bound to happen. If money comes in from the organized sector to the organized sector and the bank deposit levels go up, then some of the money comes into mutual funds.

At present, equity funds amount to about 30% of the overall industry’s assets under management. The question is whether the incremental inflows can come into equity funds or debt funds.

Till now, much of this cash used to be channeled towards real estate and gold. So, investors have been used to seeing gains at a portfolio level. Now if this money comes into banks, investors will not be satisfied with earning just 4% interest.

While the share of incremental inflows into capital markets and equity funds would go up, investors will also invest in liquid and debt funds.

As deposits will increase in the banking system, the fixed deposits (FDs) rates would start to fall. The influx of money will lead to deposit rates going down. This also helps allocating additional money in equity funds.

Insurance Sector

The insurance sector will see little impact and for a short duration. In the last few years, especially the private sector insurers have discouraged cash transactions. People who prefer paying cash will have to pay through their bank accounts. But unbanked customers, like people in rural areas, may find it difficult to pay up in the immediate future. However, last minute pains can be avoided if customers are proactive. For renewals, insurers notify the customers in advance. For insurance policies even after the due date there is a grace period of 30 days for annual premium policies during which time the policy expires but continuity benefits are given if the premium is paid within the grace period.

Agency-driven policies will be hit the most as agents tend to collect premiums in cash. Bancassurance channels collect premium online or through cheques.

There are rules to prevent anti-money laundering, even as there no cap on cash transactions. For instance, customers who pay premiums in cash in excess of Rs 50,000 have to furnish their permanent account number (PAN).

The other checks and balances against cash transactions are through tax deduction certificates. For instance, in health insurance, if you pay premiums in cash you don’t get tax deduction benefit of section 80D.

The hiccups faced by agency channels will be short lived. In the agency channel, a significant number of transactions are cash based. They would b

financial planning tips for beginners

We all want to live a financially secured life. But there is a misconception that by just getting a decent job will ensure that you lead a financially secured life. But the fact is that your job gives you an opportunity to make your and your family’s future financially secured by adopting some financial planning habits. Many youngsters do not know from where to start financial planning



So, here are few financial planning tips for beginners that will ensure that you and your family have a better financially secured future:-

Start Saving

As soon as one gets into his first job, the natural tendency is to spend and have a good time. But this is not the right way to go about it. The life has just begun and you have a long way to go. Hence, spend wisely just on essential things and start saving whatever you can. The amount that you will save might be insignificant at this moment but it will discipline you for the long run.

Start Early

When one is young, usually holdup their investment plans thinking they have sufficient time to start investing. But there is another way, the sooner you start, the less you have to save every month to reach your financial goals.

Buy Insurance

As soon as you get into your first job, invest in term insurance plan, health insurance plan and personal accident insurance. These insurance plans are must have products in your investment portfolio. And also, start young will help you save on premium. This is because insurance cost rises with age. So, start early to save more.

Use Credit Card Cautiously

Getting a credit card is considered to be the beginning of most financial disasters. You buy things generally, you don’t want or wouldn’t have purchased otherwise and are left with fat bills. Hence, it is advised to control your urge and use your credit cards cautiously. It is not a freebie that has been offered to you. Sooner or later you will have to pay and the interest rate charged on credit card is very high.

Build Emergency Fund

It is always advised to build an emergency fund. It is very important to be ready for any unexpected situation as life is very unpredictable and anything can happen. Think, what if you lose your job? Or your company is going through a tough phase and is unable to pay you in time. In such a situation, you will end up defaulting on your repayments, which will not only affect your CIBIL score but also cause immense stress. Hence, it is very important that you build a cash reserve that will help you to sustain for a minimum of three months, if something unforeseen happens. Breaking your Fixed Deposits (FDs) and policies is not a good idea. They are investments for other financial goals and retirement and hence should not be used for temporary crisis.

Pre-pay Your Debts

It is likely that you have an education loan to repay, especially if you have studied abroad, or have accumulated other forms of debts. Organize your debts according to the interest rates levied on them and start repaying. It is advisable to prepay your loans as it will save on your interest outgo. It is important to reduce as much debt as possible, so that you have more cash to invest in various other investment options for long term that will help you to achieve your other financial goals in life. It is advised to start investing as early as possible so that you can get benefit of compounding.

So, hope these basic financial planning tips will help you to move towards making a proper financial plan for yourself and your family.

Affordable Home Owner Insurance – Don’t Lose Hope

Generally, purchasing home owner insurance is not a requirement. Because of this, many people opt not to purchase home owner insurance. Why spend money on something that you are not required to have and may not ever need?

Because the time might come that you need it. Luckily, there are ways to find affordable home owner insurance.

Compare the coverage and rates of several insurance companies before deciding on one that’s right for you. You don’t want to be sucked in by a company that promises but doesn’t deliver, only to find that you’ve wasted time and money. You should also consider buying from the same company that you already purchase another kind of insurance from. Some insurance companies offer both home and auto insurance and you can usually save money by purchasing both from the same company. Also, if you remain a loyal customer for several years, some insurance companies will offer you special discounts. Ask about these and other discounts.

Many insurance companies will base the price of home owner insurance on the home owner’s credit history. Your credit history isn’t something you can change, but you can make efforts to improve it. Many people find they are able to get affordable home owner insurance if they make some changes to their homes. For example, if you live in a high risk area for floods, storms, or crime, you may consider investing in a new roof, stronger windows, and a reliable security system.

You shouldn’t include the land your home sits on in your policy, as it’s very rarely damaged to the degree that a house is, and since the value of certain properties included in your policy tends to change over time, and by reviewing your policy you could prevent paying more than you need to.

Unfortunately, nothing is free, including any type of insurance; however, you can take steps to increase your odds of finding affordable home owner insurance.

3 Ways Your Health Insurance Company Is Scamming You

The growing number of consumers taking up health insurance plans has led to the mushrooming of scam health insurance providers. These providers often target new retirees and the elderly individuals and small-business owners, who can’t negotiate better rates with legitimate insurers. Be very cautious before you invest in any health policy. Read on to get an idea about 3 ways in which your health insurance company can scam you.

1. Failure to pay claims

Usually fraud health insurance agents sign up a huge number of people quickly by offering them lucrative deals. These insurance providers keep paying small premium amounts and medical claims, but if there is a substantial claim amount or regulators catch them, these illegal companies vanish as if they never existed.

So, just beware if you are getting delayed payments or your service provider is offering fake excuses for the failure to make the payments. If you have signed up for these illegal plans, you may be liable for the medical bills of your employees as well.

2. Non-licensed health plans

If the company from which you have bought your health care policy is not licensed by State Insurance Commissioner, you can be in trouble. If all the protections of insurance regulation do not apply on your service provider, then the company may be phony. In this case your service provider is scamming you by selling non-licensed health plans.

Insurance agents are not allowed to sell any legitimate ERISA or union plan as federal law governs them. So, if your insurance agent tries to dupe you by selling an “ERISA” or “union” plan, report them to your state insurance department.

3. Unusual coverage offered at lower rates

If you are offered an unusual coverage irrespective of your health condition and that too at lower rate and much more benefits in comparison to other insurers, its time for you too hit the panic button. Do not get fooled by the lucrative offer, else you can be taken for a ride. The ‘scamsters’ aim to collect huge amounts as early as possible so, they try to sell maximum number of policies at attractive prices.

All About Home Insurance Leads

After loads of man-made and natural calamities in USA the Home Insurance market has come much into prominence. And at present the competition is at its peak.

Homeowners Insurance is a guarantee, which pays the cost of your house if it gets damaged in some natural or manmade disasters like fire, floods, storms etc.

To get a good home insurance quote we often turn to agents. The agents in turn look for home insurance leads. The home insurance leads ultimately get converted into business. To achieve the desired target the home insurance agents should use significant tools. In the era of Internet, home insurance agent must know facilities like emails, billboards, Yellow Pages ads and pop up ads. These tools are fruitful to get an effective lead if used properly.

As Internet is the convenient and fastest mode of communication, you can fill your form on homeowners insurance lead provider’s website according to your own specifications. This will help you finding a prospective customer for you. When home insurance leads service providers receive the form from the agents, they promptly send a reply to the agents with all the information submitted by the insurance lead. Then the insurance agent contacts the lead through the email or phone and offer them online homeowners insurance quote.

To obtain specific leads from any lead provider company, the insurance agent should give them appropriate information and their coverage area.

Here are some special offers provided by home insurance lead provider companies:

– They offer some free leads so that you can know their work quality.

– Lead provider companies are ready to offer their service on very competitive price.

– Advanced filtering options.

– Some lead provider firms will contact you by fax or telephone when you are offline.

– There is no need of any monthly fees or long-term contact. So if you don’t find there service beneficial to you, you can choose another company.

Americans Without Health Insurance Have New, Affordable Options

More and more Americans are going without health insurance because they can’t afford it. But there is a solution. New health insurance portfolios are available that are specially designed to help meet the national need for affordable coverage for individuals and employees of small businesses.

This is good news for many Americans who often cannot afford to purchase health insurance for themselves or whose employers do not offer insurance. This includes individuals who are self-employed; those who are employed by a small business or who run a small business; and individuals in other circumstances that require them to buy their own health insurance.

“More than 45 million Americans fall into one of these categories. Many of these people are uninsured or are struggling to afford the traditional plans that insurance companies typically offer,” says Melissa Crawford, senior vice president, Physicians Mutual.

The company bundles together existing and new products to provide an Integrated Health Portfolio (IHP) with a variety of choices and price points.

The IHP offers a choice of benefits, including coverage for:

• Doctor’s office visits

• Preventive care

• Hospital stays

• Surgeries

• Catastrophic major medical

• Outpatient treatment.

“This portfolio of products is designed for middle-income Americans for whom the only choice has been major medical plans with high deductibles-$5,000, for example. That’s too much for them to absorb out of pocket,” Crawford says. “They’re looking for a plan that pays a portion of everyday health care costs such as doctor’s visits, childhood immunizations, and screenings like mammograms and prostate cancer tests. They also need prescription drug and vision discounts.

“We have options with no deductible to meet, so policyowners receive benefits the first time they have a covered medical expense,” Crawford says. “There are also no lifetime maximums on this type of policy.”

Crawford points out that individuals and small-business owners usually do not have benefits managers who can talk them through their insurance options. The health portfolio offers a needs assessment to help customers determine which insurance products are right for them.

Physicians Mutual Insurance Company and Physicians Life Insurance Company, a member of the Physicians Mutual family, provide a full portfolio of health and life insurance products, as well as financial products. Both companies consistently receive high grades from independent insurance analysts.

5 Quickest ways to lower Your Health Insurance Premium

It is an old saying — “Health is Wealth.” The most important step to maintain this wealth is to get a health insurance policy for you as well as your family. But, sometimes the premiums of such policies can leave you in and out of the budget situation. Can you really do something to bring down your premium? Read on to learn about the 5 quickest ways to lower your health insurance premium.

1. Adopt a healthy lifestyle

Living a healthy life has many benefits. Your healthy lifestyle can easily help you in bringing down the health insurance premium. Exercise regularly, eat healthy diet, avoid smoking and heavy drinking — and your visits to the doctor will surely be minimized. The healthier you are, the lesser you are represented as a risk for the insurance company.

2. Shop for the best available price

One of the best options to keep your premium lowest is to go out and shop around for the health care policy. This will ensure that you find the best available policy that fits in your budget. Do a thorough research before investing in any policy. You can get information from your friends and relatives or even Internet.

3. Take up plans with higher deductibles

Insurance plans with higher deductibles tend to have lower premiums. Typically, deductible is the amount you are expected to pay toward hospital, doctor, and other medical bills. Taking up a plan with a higher deductible may not be a universally applicable idea. If you’re generally healthy and do not fall ill very frequently, then you can take up this plan. This way you can keep your premium at a lower rate and avail basic health care facilities as well. But, if you have a history of some major consistent illness, avoid taking this plan.

4. Take up a policy early in your life

The premium varies to a great extent with the age of the person. Try and get a policy as early in your life as you can. For example, if you buy a policy at the age of 25, then you’ll have to pay lesser premium but, if you go for the same policy at the age of 50 you’ll end up paying a raised premium amount.

5. Get in touch with independent insurance agents

You can take help from independent insurance agents. These agents represent several insurance agencies and can guide you to pick the right kind of health insurance policy and then plan your premiums at an affordable rate. Since independent agents will compete to get the business – so you’ll get serious offers quickly