Monthly Archives: December, 2012

One can exit an endowment policy mid way too

In continuation with the case in the previous article, Ajit is now 35 years old, married with a small kid. His expenses, responsibilities and insurance and savings needs have all increased. Now, he is stuck with an endowment policy on which he has to pay regularly for the next 10 years, but which neither gives him the required insurance cover nor the required growth on investment. Ajit now knows the benefits of taking a pure term insurance and wants to take one for 25 lakhs for a term of 20 years which would cost him around Rs 10,000/- pa, but he doesn’t want to incur this expense in addition to the endowment policy premium.

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Why endowment policies don’t multiply your wealth

Ajit is 35 years old now. When he started working at the age of 25, his father’s insurance agent had suggested that he take a good endowment insurance policy, as it would help him save taxes, provide insurance and also save money for the future. Since it made sense, Ajit did so and subscribed to an endowment policy for a term of 20 years, an insurance cover of Rs. 5 lakhs and an annual premium commitment of Rs. 25,000/-.


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HRA and its tax impact

House Rent Allowance or HRA is one of the main salary components of an individual. A salaried employee staying in a rented house can claim HRA from his employer and avail of an income tax exemption under section 10(13A) of the income tax act.

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How to pay less on your Health Insurance cover

Health Insurance



I am sure this post will grab many eyeballs because of its title – considering how price sensitive we Indians are :).

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New share allotment process for IPOs

This month will see quite a few IPOs hitting the market. CARE Ltd (7-11 Dec), PC Jeweller Ltd(10-12 Dec), Bharti Infratel Ltd(11-14 Dec). IPOs are very popular among retail investors, a majority of them investing for quick gains. Recently, the SEBI has brought about some changes in the allotment process in order to boost retail participation. Let us see what are its pros and cons.

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A low P/E does not mean that the share is cheap

Stocks: For the I-Banker in all of Us



Mr. Chaturvedi is a businessman and also takes keen interest in the stock markets. He has a varied portfolio of stocks which he tracks in his free time. He gets most of the investment tips by reading financial newspapers and through business news TV channels. Last week, there was a sudden dip in the stock index owing to which shares of a few known companies were available at a lower market price. One of the industry experts on one of the TV channels recommended a few shares for investment as they had a low P/E and were trading at a discount due to the market correction. Satisfied with the explanation and glad to have been able to time the market effectively, Mr. Chaturvedi promptly invested in the recommended shares.

Was he right in doing this or should he have done more research? Let us analyse this.

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