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Secure your wife’s future with the MWP Act Insurance

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Secure your wife’s future with the MWP Act Insurance

Admin Jun 24, 2022

Everything in the modern world has an associated cost. Housewives may not make any money from household chores. However, the value they bring to the family is enormous. In fact, some husbands give their entire monthly salary to their wives to cover all house-related expenses. In addition, the amount of work a housewife does is priceless. A homemaker would be left with some money after all expenses. Because of the presence of inflation, all those with some savings must invest so that they will have enough money later when they need it.

Secondly, it is important to secure your wife’s future financially. We believe that purchasing a term insurance policy will protect our family, particularly your wife and children, in the event of an unforeseen event. Simply purchasing a life insurance policy will not ensure that your loved ones receive the insurance amount in the event of your death. The money from your term life insurance claim may not reach your nominee or beneficiary.

In your absence, it could be taken by relatives or people to whom you owe money (creditors). By purchasing a term insurance policy under the MWP Act, you can ensure that the sum assured is passed on to your wife and children.

A term insurance policy under the Married Women’s Property Act 1874 (MWP Act) protects your family’s financial interests in your absence if you are a married male policyholder. Once a policy is obtained under the MWP Act, it cannot be attached by the courts for debt repayment*. In the event of your death, only your wife and children will be entitled to the sum assured.

What exactly is the MWP Act (Married Women’s Property Act of 1874)?

Section 6 of this act emphasises its importance: “a policy of insurance effected by any married man on his own life and expressed on the face of it to be for the benefit of his wife, or of his wife and children, or any of them, shall ensure and be deemed to be a trust for the benefit of his wife, or of his wife and children, or any of them, and shall not be subject to the control of the trust so long as any object of the trust remains.”

Who is eligible for MWPA insurance? (Married Women Property Act)?

If you are a married man living in India, you can apply for an insurance policy through the MWPA. If you are a widower or divorcee, you can also purchase the policy and name your children as beneficiaries. However, the benefit is only available when you purchase the policy, and only if you do so in your own name.

Who should use the MWP Act?

  • Individuals and businesses who have loans or liabilities.
  • People who want to protect their wife/child(ren) from creditors or relatives with potentially fraudulent intentions.
  • The benefit amount for term life insurance can be substantial enough to financially protect your loved ones in your absence. As a result, everyone who buys term life insurance should choose to protect their loved ones under the MWP Act.

Who can you name as beneficiaries?

The beneficiaries of a policy covered by the MWPA can be your wife alone, your child or children alone, or your wife and children together. As a policyholder, you have the option of allocating specific percentages of the sum assured to each beneficiary or dividing it equally. However, once the policy is issued, the beneficiaries cannot be changed. So, if you name your wife as the beneficiary, even if you and your wife divorce, your beneficiary (wife) will remain the same.

What else does the MWPA accomplish?

As a policyholder, you are not permitted to borrow against MWPA-endorsed policies. If you surrender a cash-value policy, the proceeds will be distributed to the beneficiaries. Furthermore, if you survive the policy term, the maturity proceeds will be paid to your beneficiaries.

How do I obtain a MWPA insurance policy?

It is very simple to get an insurance plan endorsed under the MWPA. All you have to do is include an addendum with your insurance application when you purchase the policy.

 

 

 

Choosing the right insurance in uncertain times

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Choosing the right insurance in uncertain times

Admin May 24, 2022

You can never exactly forecast the timing and amount of rain during the monsoons, no matter how hard you try. Likewise, your existence is full of unknowns. Things can go wrong in a variety of ways and at any time. As a result, you have tools like a savings account and a life insurance policy to protect yourself from such occurrences / unfortunes events.

Is it possible to survive without insurance?

You can survive without insurance if you want to, but you shouldn’t. Uncertainty and financial freedom risk will always be a part of your life. You will only get wet if a rain forecast is incorrect. However, if something goes wrong in your life, your way of life may be jeopardised.

A good life insurance policy with a critical illness benefit and a large death claim should be enough to keep you and your family afloat through difficult times. Having a savings policy in place could be beneficial at this time. The monthly income from your savings plan should be sufficient to cover all of your required expenses, such as your EMI and loan repayments.

There are four forms of financial planning in general you should consider for uncertain times:

 

  • Term plan
  • Pension plan
  • ULIP
  • Endowment plan

Term Plan

Term insurance is a form of life insurance policy that provides coverage for a specific “term” of the year in exchange for a predetermined payment. Term life insurance, as a pure protection plan, provides more insurance coverage for a low cost.

Term insurance plans provide financial protection for the entire family in the event of the policyholder’s absent. Optional coverage for critical illnesses and accidental death is also available. You’ll be insured for a long time, and the rates are reasonable.

The Benefits of Term Life Insurance

Family Dependency: If you are unable to work, the term insurance proceeds can be used to meet your dependents’ and family’s monthly expenses. It also aids you in achieving major life objectives such as your child’s education and marriage.

Asset Protection: You can borrow money for things like a car or a house with a term plan. However, if you die, your dependents and family members may be liable for debt repayment. In this case, your family may be able to use the term insurance payout to pay off the outstanding debts.

Risks associated with modern lifestyles: Today’s lifestyle difficulties frequently result in a wide range of ailments and diseases. Some term insurance plans give critical illness coverage for the remainder of your life, as well as coverage for your dependents and loved ones after you die. This critical characteristic compensates for the diagnosis of life-threatening conditions like heart attack or cancer.

Pension Plan

A pension plan, also known as a retirement plan, is a sort of investment plan that allows you to accumulate a portion of your resources over time in order to ensure a stable financial future. A pension plan can help you deal with the uncertainties of retirement and assure a regular stream of income. Even if a person has a sizable savings account, a pension plan is essential.

Importance of a Pension Plan

 

  • Increased retirement years
  • Health-care costs
  • Financial independence after retirement age

ULIP Insurance

A Unit Linked Insurance Plan (ULIP) is financial vehicle that also provides life insurance cover. ULIPs let you build money for goals such as your dream house, your child’s education, your retirement, and more through systematic investments and market-linked returns.

ULIP, or Unit Linked Insurance Plan, is a type of insurance that also serves as an investment. It provides superior life insurance with good returns while also assisting in tax reduction. In fact, in today’s economy, ULIPs have emerged as one of the greatest investment possibilities.

Ideally suited for:

 

  • ULIPs should be considered by people who have a long-term financial strategy for wealth creation with insurance.

 

  • Investing in a ULIP until it matures can help you save for retirement, your children’s education, and other financial goals. It combines the benefits of both savings and security into one plan.

 

  • Long-term financial planning, as ULIP offer both bond and stock investing with insurance. It has a regular premium payment option and accomplishes life insurance and wealth accumulation objectives.

 

Endowment Plans

An endowment plan is a type of life insurance that pays out a lump amount after a set period of time (called “maturity”) or upon death. Up to a particular age, typical maturities are ten, fifteen, twenty, thirty, thirty five, forty years.

In the event of a catastrophic illness, an endowment policy will pay out. Endowment policies are either standard with-profits or unit-linked, including those with unitised with-profits funds. The holder is subsequently paid up values and surrender value, which is set by the insurance company based on the period the policy and the amount paid into it.

Takeaway

Our lives do not stop because of a single wet day. As a result, a comprehensive financial strategy backed by the appropriate insurances can also help you endure obstacles in life. All short-term emergencies should be addressed in the financial plan. If you have a large enough umbrella to protect your entire family, the size and colour of the rain clouds don’t matter.

7 tips on maintaining a healthy credit score

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7 tips on maintaining a healthy credit score

Admin May 12, 2022

 

It is possible to live with bad credit, but it is not always simple or cost-effective. Having a good credit score can help you save money and make your financial life easier. Credit score is crucial in a lot of ways; hence, it is imperative to know how to:

  • Maintain a healthy credit score
  • Improvise a credit score

Check your credit report regularly

Loans are especially difficult to obtain for people who have no credit history. Even if the loan is approved, the interest rate will be hefty. As a result, having one credit line, such as a credit card, is a reasonable choice for maintaining a credit history.

Here’s why checking credit report regularly is important:

  • Examining your credit score and history might help you to better understand your current financial circumstances.
  • Checking your credit reports on a regular basis might help you become more aware of what lenders may observe.
  • Checking your credit reports can also help you find out if there is any information on your credit report that is incorrect or incomplete.

Availing at least one loan product

If you want to maintain a good credit score, you should take out at least one loan and make timely payments. Borrowing multiple loans at the same time indicates that you are credit-hungry, which lowers your credit score. Hence, to keep your credit score intact, you should opt for at least one loan.

Avoiding late payments

Paying in time is a good habit to get into so that your credit score doesn’t suffer. Also, avoid using your credit cards as much as possible to keep your debt to a minimum.

  • Payment history affects much of your credit score. It has the greatest impact on your credit score. To avoid harming your credit score, it is highly recommended that you pay credit card payments, loan EMIs, and other expenses on schedule.
  • According to a recent study, even a 30-day delay in bill payments can lower your credit score by 100 points. If you wait any longer, your score will decline even more.
  • Delays have a greater impact on your credit score and history if they occur frequently. For up to seven years, the delay is documented in your report.
  • Late payments not only hurt your credit score, but they also cost you money in the form of delay payment charges, higher interest rates, and other fees.

Managing a credit mix

Unsecured loans are commonly thought to be the leading cause of a poor credit score. As a result, use a combination of secured and unsecured credit.

What’s a credit mix?

Types of credit accounts you have are referred to as your credit mix.

  • Depending on the credit scoring methodology utilised, the influence of a credit mix on your credit ratings varies.
  • Lenders and creditors are often interested in how you handled various types of accounts over time.

Simply explained, your credit mix refers to the types of credit accounts you have, such as mortgages, loans, and credit cards. It’s a factor that’s usually taken into account when determining your credit scores, though the weight it receives varies based on the credit scoring model (methods for computing credit scores) employed.

Lenders and creditors, in general, prefer to see that you have a diversified credit mix – that means you’ve been able to appropriately manage several sorts of credit accounts over time.

Credit Utilisation Ratio

Keep an eye on your credit usage ratio as one of the golden principles to follow. It’s the amount of credit you’ve utilized in relation to the credit limit you have available. Experts recommend that you use no more than 30% of your credit limit at any given time.

For example, if your credit card limit is ₹2 lakhs, you should spend about ₹60,000. Your credit score may suffer if you have utilized more than 50% of your credit limit. Lenders will be in wary if you have a lot of credit exposure because it means you’re more likely to default.

Do not close old accounts

Closing old accounts or credit cards is never a good idea because that accounts reflect a long history of debt payments. Before you close any accounts, think about how many you have, how much they cost you, what you use them for, and how they might affect your credit score.

Although canceling an account may save you money in annual fees or lower the chance of fraud on those accounts, closing the wrong accounts can affect your credit score.

 

Avoid new hard inquiries

You permit the issuer or lender permission to examine your credit report to assess your “creditworthiness” when you apply for a credit card or any other sort of loan (mortgage, vehicle loan etc.).

In other words, your potential lender wants to know if you’ll be able to repay the money you borrowed or not. The better your credit history, the less danger you present, and the more likely you to get approval for that new credit card or loan.

It’s crucial to understand that there are two kinds of credit inquiries. Your FICO (The Fair Isaac Corporation) score is unaffected by soft inquiries such as examining your own credit report. Hard queries, such as applying for a new credit card or a loan, will have an impact on your credit score.

Take advantage of one free credit report every year

The Reserve Bank of India (RBI) has mandated that all credit bureaus in the country give consumers with one free credit report each calendar year since 2017.

The four credit bureaus currently operational in the country are listed below:

  • TransUnion CIBIL
  • Equifax
  • Experian Credit Information Company
  • High Mark Credit Information Service

This implies you have the option of obtaining four credit reports per year. You can also sign up to receive your credit reports, which include your credit score, from any of these bureaus.

 

Top 5 Benefits of Term Insurance

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Top 5 Benefits of Term Insurance

Admin Mar 17, 2022

Every hour, 53 accidents occur on Indian roadways, resulting in the loss of 17 lives. Similarly, every day in the country, 83 individuals drown. With such a high mortality rate, the country should be covered by a wide range of insurance policies. The truth is a little different. A large portion of the population lacks adequate insurance coverage. Low life insurance penetration could be due to complex products and costly premiums. Term insurance policies, on the other hand, can make life insurance affordable to a large number of people.

Term insurance protects your family financially if you are unable to provide for them. In today’s environment, term insurance policies are one of the most significant types of life insurance to obtain.

Term insurance not only protects your family financially in the event of a disaster, but it also saves you money on taxes. You can also take advantage of a number of other advantages that come with term plans.

Take a look at the following list of term insurance advantages.

  • Whole Life Cover

One of the most important term insurance benefits is whole life insurance, which provides total protection for policyholders up to the age of 99 and beyond. If the breadwinner dies, a term insurance policy could help reduce the financial strain on family members.

  • Easy to understand

When acquiring a life insurance policy, it is preferable to have a thorough understanding of the specific terms included in the term insurance policy. Another advantage of term insurance is that it is one of the most simple policies to comprehend. In addition, a term insurance policy is solely a life insurance policy with no investment component. The premium must be paid on time, and the insurance provides coverage for a set period of time with a variety of term insurance advantages.

  • High Sum Assured at an Affordable Premium

The most straightforward sort of life insurance is a term policy. The low cost of term insurance is its most enticing aspect. A term insurance policy, when compared to any other sort of insurance policy, has unquestionably low premiums. The most important rule to remember when buying a plan is to stick to it. The earlier you buy, the lower the premium. Similarly, getting a term insurance policy online is preferable to buying one offline because the rates are lower. Furthermore, checking term insurance benefits online is simpler and more convenient.

  • Critical Illness

Any significant illness can occur at any point in one’s life. Furthermore, the costs of care for severe ailments could quickly deplete the savings. Though life insurance is the most essential term insurance benefit, you can also acquire critical illness insurance, which is frequently included in additional rider options and allows you to avoid paying for medical expenses and depleting your assets. It is critical that you take advantage of this term insurance benefit since you never know what will happen tomorrow, even if you are currently well.

  • Return Of Premium Option

A maturity benefit is not provided by a term insurance policy. However, you can only get a maturity benefit if you choose the return of premium option, which requires you to pay hefty premiums that will be repaid to you once you have completed the policy period. However, the entire amount of premiums that will be reimbursed excludes taxes, rider premiums, any levies, and the modal sum that is paid on the premium. You may also use an online term insurance calculator to get an estimate of the cost with and without maturity benefits, which will help you make an informed decision and assess your needs.

Additional Benefits

Last but not least, the term insurance policy provides tax benefits under two different provisions of the Internal Revenue Code. You can get a tax break on the premium you pay for a term insurance policy if you use Section 80 C. The premium paid up to the maximum limit of Rs 1.5 lakh is exempt from tax. Furthermore, a maturity benefit granted by some term insurance plans, particularly the TROP (Term Return of Premium Plan), is tax-free under Section 10 (10D).

  • Section 80c – You can get a tax break on the premium you pay for the coverage. The premiums paid for term insurance are eligible for tax exemption under Section 80C of the Income Tax Act 1961, up to a maximum limit of Rs.1.5 lakhs.
  • Section 10 (10D) – Under section 10(10D) of the Income Tax Act 1961, the maturity benefit granted by some term insurance policies (particularly the Term Return of Premium Plan TROP) is also eligible for tax exemption.

Accidental Death Benefit

This rider benefit is particularly important because it deals with an unavoidable, irreversible misfortune – the death of the person. As a result, his or her family is left to deal with the sadness while also being under a lot of financial stress. Unexpected medical bills are a huge expense right now, and if it turns out to be fatal, the family will have to manage the death toll as well as future pay. The blow of this two-fold risk of medical bills and permanent loss of pay from the death of the earning member can be softened by the addition of an accidental death benefit rider to the policy.

Why is it crucial to get Term Life Insurance in 2022?

In a nutshell, Term Life Insurance has a number of advantages. It provides more coverage for less money, is simple to understand, and has major tax benefits. However, before you evaluate all of the benefits, keep in mind that the primary objective of insurance is to provide protection rather than financial gain. Term insurance, unlike most other types of life insurance, sticks to this objective.

How to Improve Your Credit Score

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How to Improve Your Credit Score

Admin Mar 16, 2022

You may want to focus on boosting your credit now that you know more about the advantages of having good credit. These seven credit-building steps can be useful:

  • Keep track of your credit ratings on a regular basis.
  • Understand the components of a standard credit score.
  • Keep an eye out for any inaccuracies on your credit reports.
  • Find out how frequently you should check your credit reports.
  • Learn how to prevent the most common credit card blunders.
  • Pay your bills on time and keep your credit card balances low.
  • Quick credit score repairs should be avoided.

What formula is generally used to calculate a credit score?

While each credit bureau has its unique model for determining credit scores, there are a few unchanging characteristics that all credit bureaus take into account. The following factors are taken into account:

  • 35 percent payment history
  • 30 percent credit utilisation
  • 15 percent of people have a credit history
  • 10 percent new credit
  • 10 percent credit mix (credit accounts of different types that make up a consumer’s overall credit report)

Requesting a Free Credit Report

Since 2017, the Reserve Bank of India (RBI) has required all credit bureaus in the country to provide consumers with one free credit report every calendar year.

Below are the four credit bureaus currently operating in the country:

  • TransUnion CIBIL
  • Equifax
  • Experian Credit Information Company
  • High Mark Credit Information Service

This means you can acquire four credit reports per year. You can also sign up for any of these bureaus to receive your credit reports, which include your credit score.

Benefits of healthy credit history

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Benefits of healthy credit history

Admin Mar 15, 2022

Living with bad credit is doable, but it is not always simple or economical. Having an excellent credit score can enable you to save money and simplify your financial life. If you’re seeking a reason to keep your good credit, consider the following advantages of having a good credit score.

Low Credit Card and Loan Interest Rates

The interest rate is one of the costs associated with borrowing money, and it is frequently linked to your credit score. You’ll almost always receive the best interest rates and spend reduced finance expenditures on credit card balances and loans if you have a strong credit score. The less interest you spend, the faster you’ll pay off your debt and have more money for other things.

A Better Chance of Getting a Credit Card or Getting a Loan

Borrowers with a low credit history are sometimes hesitant to apply for a new credit card or loan since they have previously been denied. Because lenders analyse other variables such as your income and debt, having a good credit score isn’t a guarantee of acceptance. A strong credit score, on the other hand, boosts your chances of getting new credit. In other words, you can confidently apply for a loan or a credit card.

Increased Bargaining Power

With a strong credit score, you can get a better interest rate on a credit card or a new loan. If you need more negotiating leverage, you can use other appealing offers based on your credit score that you’ve gotten from other organisations. Creditors are unlikely to budge on loan terms if you have a low credit score, and you won’t have any other credit offers or possibilities.

Obtain Higher Limits Approval

Your borrowing power is determined by your salary and credit score. Because you’ve demonstrated that you return your loans on time, banks are more willing to let you borrow more money if you have a strong credit score. With a negative credit score, you may still be approved for some loans, but the amount will be limited.

Ratnaafin Insights – Feb 2022 Edition

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Ratnaafin Insights – Feb 2022 Edition

Admin Feb 23, 2022

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