• General
  • Insurance
  • Investment


1. Which are the best companies for insurance?

LIC is the best company because

  • Market share is more than 75%
  • Claim ratio is around 99%

What is the best age to start investing?

Any age is the right age when you make smart investment decisions which benefits your future. Investors are advised to start investing in Mutual Funds from their early 20s because the earlier you start the more time you money gets to grow; this is called the power of compounding

How much Mediclaim do I need?

The amount of Mediclaim depends on the following factors

  • Health History
  • Family History
  • Financial History

What is the difference between insurance and investment?

Insurance is a service or plan you purchase with the intention of guarding against loss of life, property or health as well as theft or damage.

Investing, meanwhile is when you give money or assets to a third party in exchange for the return of that money or assets with profit on the original value at an agreed point in the future.

Why should I invest in mutual funds?

Beat Inflation

Mutual Funds help investors generate better inflation-adjusted returns, without spending a lot of time and energy on it.While most people consider letting their savings 'grow' in a bank, they don't consider that inflation may be nibbling away its value.

Expert Managers

Backed by a dedicated research team, investors are provided with the services of an experienced fund manager who handles the financial decisions based on the performance and prospects available in the market to achieve the objectives of the mutual fund scheme.


Mutual funds are an ideal investment option when you are looking at convenience and timesaving opportunity

Low Cost

Probably the biggest advantage for any investor is the low cost of investment that mutual funds offer, as compared to investing directly in capital markets.


Going by the adage, 'Do not put all your eggs in one basket', mutual funds help mitigate risks to a large extent by distributing your investment across a diverse range of assets


Investors have the advantage of getting their money back promptly, in case of open-ended schemes based on the Net Asset Value (NAV) at that time. In case your investment is close-ended, it can be traded in the stock exchange, as offered by some schemes.

Higher Return Potential

Based on medium or long-term investment, mutual funds have the potential to generate a higher return, as you can invest on a diverse range of sectors and industries.

Safety & Transparency

Fund managers provide regular information about the current value of the investment, along with their strategy and outlook, to give a clear picture of how your investments are doing.

Moreover, since every mutual fund is regulated by SEBI, you can be assured that your investments are managed in a disciplined and regulated manner and are in safe hands.


Interest rate in PPF

The interest rate on PPFs is fixed by the Government and only the government can change this rate. The current interest rate on PPFs stands at 8.7% per annum

Tax Deduction

Individuals can claim a tax deduction on certain investments under Section 80C of the Income Tax Act, with both Public Provident Fund and Tax Saving Fixed Deposits eligible for such deductions. The current maximum deduction available for both these investments stands at Rs 150,000 (One lakh fifty thousand) per annum.


Emergencies can come knocking at any time and a loan can often quell the emergency temporarily. Loans can be obtained against PPF from the third year onwards.

Risk free Investment

PPF account could not be attached with any court order against any debt or loan.


Safe, simple, risk free

It is one of the safest, simple, risk free instrument that offer fixed returns, for a fixed period, most investors rush to invest in this instrument.

Flexi FDs

They can help you when you require more funds than what you have in your savings account. In such a situation, your bank will withdraw the excess amount required by you, from your flexi FD, and deposit the same into your savings account.

Overdraft facility

Overdraft facility can be obtained on FDs by linking it to your savings or current account. An overdraft facility behaves like a loan. Banks usually allow you to take up to 75% of the FD amount as loan and will charge an interest on the overdraft or the loan, which is usually 2% more than the FD rate.

Senior Citizen friendly

Senior citizens can make the best out of this instrument. Once retired, if you do not have a regular source of income, other than your pension, it is advisable to park a lumpsum as an emergency fund in FDs, for various tenures as this will help you during contingencies.


1. Life Insurance

When can a nomination be done?

To begin with, 'nomination' is the process of identifying a person to receive the policy amount in the event of death of the policyholder. The nomination can be done at the start of the policy by providing details of the nominee in the proposal form. However, if the nomination is not given at the beginning, it can be done at a later date. This nomination has to be effected by giving notice in a prescribed form to LIC and getting it endorsed on the Policy Bond.

The policyholder can change the nomination at any time during the term of the policy and for end number of times. For this, the policyholder has to give a notice in a prescribed form to LIC. Further, nomination can be removed any time by the policyholder without giving prior notice to the nominee.

Under nomination, the nominee gets only the right to receive the policy amount in the event of the death of the policyholder; nomination does not pass on the property in the policy. If nominee dies when the policyholder is still surviving then the nomination would be ineffective. If nominee dies after the death of the policyholder but before receiving policy amount, then again the nomination becomes ineffective and only the legal heirs of the policyholder can claim money.

How do I revive my policy that has lapsed?

If your policy has lapsed on account of non-payment of premium within the specified due date, you can re-apply to reinstate it, if:

You apply within 5 years from the date of the first unpaid premium and before the maturity date

You pay all the required premiums and interest

You give us satisfactory evidence of health at your own expense The reinstatement will take effect only if we accept your application. We will notify our acceptance to you.

What is nomination of the policy?

Section 39 of the Indian Insurance Act 1938 provides for nomination of a person who would receive the benefits of the claim on the death of the life assured. Nomination establishes a clear title to the policy. This prevents dispute and also prevents delay in settlement of a death claim. In the case where nomination has not been given at the time of proposal, nomination can be made at any time during the term of the policy. Nomination can also be changed, at any time during the tenure of the policy, by intimating respective insurance company

Can I change my nomination?

Yes. You can change your nomination at any time till the maturity date. All you need to do is to inform us about the change through a specified form.

How do I notify my change in address?

You can call our customer service center or notify us through a letter about the change of address. We shall confirm the change to you.

What if I forget to make payment?

We offer you a grace period for non-payment on due date. This grace period is 30 days from the due date in case premium payments are made on quarterly, half-yearly or yearly basis. It is 15 days from the due date for monthly payments. During this period the policy remains in full force and no interest is charged. If you fail to pay a premium even during the grace period, your policy automatically:

Lapses if there is no surrender value

Converts to a paid up policy if there is enough surrender value

What If I lose my policy?

You can apply for a duplicate policy document. To get this document, you will have to send us a letter stating the circumstances under which the policy was lost.

Can I assign a policy?

The policy can be assigned. To assign the policy you have to notify us regarding the assignment.

How do I make a maturity claim?

You must send us the:

  • Completed claim form
  • Policy of Life assurance
  • Proof of age, if not submitted earlier

To whom is my death claim amount paid ?

The death claim is paid to:

  • The nominee, as declared by you in the proposal form
  • The legal heirs, in case you have not specified the nominee
  • The appointee named by you, in cases where the nominee is a minor at the time of claim

How does the nominee/legal heir make a death claim ?

The claimant (Nominee/Legal heirs) must send us:

  • An intimation of the death of the life assured
  • Death certificate
  • Completed claim forms and other forms as required by the company
  • Policy of Life assurance
  • Identification that the person is entitled to receive the payment

What additional requirements are there for an accident claim?

irements for a death claim, the claimant should submit all the reports (police, hospital etc) pertaining to the accident as required by the company.

What additional requirements are there for a disability claim?

You must send us within 6 months of the disability date

Written notification of your disability arising out of the accident

Proof of your disability

You will have to undergo one or more medical examinations conducted by medical practitioner/s appointed by us, if required.

What conditions apply to a policy loan?

A loan is given only if you have an ICICI Pru Save'n'Protect policy.

If your policy has a surrender value, you can apply for a policy loan upto 80% of the surrender value. This loan will carry an interest rate as decided by the company from time to time. The interest will be charged starting from the date of the loan. You can repay the interest and the loan at any time.

If the total outstanding amount owed to us under your policy exceeds the surrender value, your policy terminate immediately. The outstanding loan and interest will be deducted from the claim amount at the time of settlement.

What are contingent deferred sales load (CDSL) and contingent deferred sales charge (CDSC)?

Depending on how many years the investor stays with the fund, some funds may charge different amount of loads to the investors- the longer the investor stays with the fund, lesser the amount of exit load charged to him. This is called the contingent deferred sales charge (CDSC) and contingent deferred sales load (CDSL).

Do I need to obtain a duplicate copy of my lost policy in case I wish to surrender my LIC policy?

It is not necessary to have a duplicate policy made in case the policy that you wish to surrender is lost. However these requirements must be fulfilled:

  • No advertisement is needed for surrender values up to Rs.1000/-, inclusive of the vested bonus. LIC also holds the discretion to waive off the advertisement requirement depending on the merits of the case where the surrender value stands between Rs.1000/- and Rs.2000/-. However in cases where the surrender value exceeds Rs.2000/- or the sum assured exceeds Rs.25000/-, advertisement in one newspaper is insisted upon.
  • Declaration of surety is necessary as in the case of the issue of a duplicate policy. An indemnity bond duly stamped and completed by the life assured along with a surety. The stamp duty on the indemnity bond will depend on the amount of the surrender value of the policy.
  • Discharge form and form of declaration of no assignment duly completed by the policyholder.

What are the additional requirements to be fulfilled to settle death claims on LIC policies?

The additional requirements for settling death claims depend upon the duration of the policy. The table set below provides details regarding the requirements.

Duration of Policy less than 3 years

  • Policy Document.
  • Deeds of assignment or reassignment executed separately, if any.
  • Proof of age if age not admitted earlier.
  • Claim form "A" (Form No. 3783 revised).
  • Certificate of Death OR Claim Form "B1" (Form No.3816) OR Claim Form "E" (Form No. 3787 revised).
  • Claim Form "B" (Form No. 3784 revised).
  • Claim Form "C" (Form No. 3785 revised).
  • Claim Form "E" (Form No. 3787 revised).
  • Legal evidence of title if the policy is not assigned or nominated.
  • Form of Discharge (Form No.3801) duly executed and properly witnessed.
  • Duration of Policy between 3 to 5 years

Policy Document.

  • Deeds of assignment or reassignment executed separately, if any.
  • Proof of age if age not admitted earlier.
  • Claim form "A" (Form No. 3783 revised).
  • Certificate of Death. If the certificate of death is not in the standard form, then one
  • of these forms is required Claim Form "B" (Form No. 3784 revised).
  • Legal evidence of title if the policy is not assigned or nominated.
  • Form of Discharge (Form No.3801) duly executed and properly witnessed.

Duration of Policy more than 5 years

  • Policy Document.
  • Deeds of assignment or reassignment executed separately, if any.
  • Proof of age if age not admitted earlier.
  • Claim form "A" (Form No. 3783 revised).
  • Certificate of Death.
  • Legal evidence of title if the policy is not assigned or nominated.
  • Form of Discharge (Form No.3801) duly executed and properly witnessed.

What are the requirements to be fulfilled for settling maturity claims of LIC?

The insurance company always attempts to settle maturity claims on or before the due date as long as their requirements are met within the stipulated time. The requirements that you as the policyholder must take care of are:

  • The policy document must be submitted unless it is in the insurer's custody as security for a loan.
  • Age proof such as the municipal birth certificate or the school leaving certificate need to be submitted in case the age was not admitted when the policy was issued and the sum assured, or the paid-up value is above Rs.15000/-. Where the sum assured or the paid-up value is Rs.15000/- or less, age proof is normally waived.
  • If any assignment or reassignment was executed by a separate deed, such deed or deeds must also be submitted.
  • Finally, the Form of Discharge should be returned duly signed by the policyholder over a Re. 1/- revenue stamp and duly witnessed.

What is the procedure for applying for housing loan?

You must submit an application in the prescribed form available as per the norms

  • A non-refundable processing fee as per norms is applicable depending on loan amount.
  • A true copy of the building plan sanctioned by the local authority and certified by a qualified architect or civil engineer.
  • If employed, your employers' certificate in the prescribed proforma, both for yourself and your guarantors. In case you and your guarantors are self-employed then certified copies of your income tax returns or assessment orders with statements of income over the last three years are necessary.
  • An attested copy of the title deed or agreement for sale along with a detailed title investigation report mentioning the root or abstract of title in chain for a minimum period of 15 years given by the solicitor or advocate of the builder or the society.
  • An allotment letter, where the housing cooperative society is already registered indicating the details of the flat or house and its estimated cost.
  • Detailed item-wise estimate about the cost of construction from a qualified architect in case of a house. In respect of loans for flats, receipt of the sub-registrar about lodging of the agreement, copies of the receipts made to the builder or society.

What is Assignment of an LIC policy?

If your intention is that your policy monies should go to a particular person only then you need to assign the policy in that person's favour. Thereafter the insurer will pay the policy monies ONLY to the assignee who becomes its owner, irrespective of whether he or she is your legal heir.

Thanks to assignments, the proceeds of a policy can be protected against the claims of any of the policyholder's creditors. Assignment is a legal instrument and the insurer cannot be held responsible for its legal liability. The insurer will nevertheless register the assignment in its books.

What do you mean by a paid-up LIC policy?

According to LIC rules and regulations, once you pay the premiums on a life insurance policy for 3 full years, the policy does not become wholly void even if no subsequent premiums are paid. Such policies are known as paid-up policies. In such cases, the sum originally assured is reduced to a sum bearing the same ratio to the full sum assured as the number of premiums actually paid to total number of premiums originally stipulated as payable under the policy.

If 6 out of the originally stipulated 30 premiums are paid, the sum assured under a paid-up policy would still be 20 percent of the original sum assured by the policy.

How is the Paid-up value of an LIC policy calculated?

The paid-up value of a policy is the reduced sum assured calculated on a proportionate basis by using a simple formula

Paid-up Value=(No of premiums paid/Total no of premiums payable) x Sum Assured

What benefits are not accrued to a Paid-up LIC policy?

A paid-up policy loses all the additional benefits attached to the policy:

  • Double Accident benefits
  • Survival benefit installments in the case of money-back policies

A paid-up policy may be free from payment of further premium but is subject to the payment of interest on any loan and other charges, if any are applicable. The interest on the loan must be paid regularly or LIC will start to write off the policy towards the repayment of loan amount and the interest in terms of the conditions governing the grant of the loan.

Should I allow my LIC policy to become a paid-up one?

NO. Once a policy becomes a paid-up one, the sum assured is reduced to such a pitiful figure that it cannot provide any cover to the policyholder or his dependants. Besides, you should also consider the facts that:

  • The cost of insurance goes up with advancing age. The next time you obtain a policy, the terms will not be as advantageous as available earlier.
  • The chances of insurability also diminish with the advancement of age despite the fact that insurance is needed more along with increasing age and growing responsibilities.
  • The reinstatement of a policy once converted into a paid-up policy requires numerous cumbersome formalities to be completed.
  • A paid-up policy cannot participate in the bonus declared by LIC.
  • LIC will not issue a fresh policy for at least 3 years in case an earlier policy of yours stands lapsed or was converted into a paid-up one.

It is strongly advised that you should NOT allow any of your policies to become paid-up policies.

What is the Free Disability Benefit on LIC policies?

The Free Disability Benefit is automatically available to every policyholder without any extra charge. If the life assured is disabled by accident from earning his livelihood, he will be exempted from paying premiums on his policy after the date of his disablement. The benefit is granted only on the first Rs.20000/- of assurance on any one life.

To be eligible for this benefit, the policy has to be in full force for the full sum assured when the disability occurs. Also the disability must arise before the policy anniversary and the age of the life assured must not exceed 70. Also the disability must be total and permanent such that there is no work, occupation or profession that the life assured can do or follow to earn or obtain any wages, compensation or profit.

Loss of eyesight in both eyes, amputation of any two limbs, hands above the wrist and legs above the ankle will be deemed to constitute total and permanent liability. And LIC must be furnished within 90 days of the occurrence of the disability.

What is the date of commencement of risk for LIC policies?

The risk under which the risk for LIC policies commences is the date of receipt of the first premium in full or the date of acceptance, whichever is later. But if the acceptance of the proposal is conditional upon the proposer's compliance with any requirements, then the risk under the policy will commence on the date on which all requirements are satisfactorily complied with or on the date of receipt of the first premium in full, whichever is later.

When do you receive Annuity payments on LIC policies?

There are two types of Annuities - Immediate annuities and Deferred annuities.

Under Immediate annuities, you start receiving annuity payments as soon as you pay the premium usually in a lump sum.

In the case of Deferred annuities, the payments to the annuitant start after a certain deferment period. Typically, the annuitant pays annuity premiums in installments during the deferment period.

Generally, people pay less premium for an annuity that provides future payments because the deferment period allows the insurance company to invest your premiums at a profit, thereby reducing the cost of the annuity to you.

Who can attest the discharge vouchers of LIC policies?

The people who can attest the policyholder's or the assignee's signature on the discharge form are:

  • Any agent of the LIC who holds membership of at least the Divisional Manager's club.
  • A Block Development officer.
  • Any gazetted officer.
  • Any magistrate.
  • Any Class 1 officer or a Development officer with at least 5 years' services.
  • A principal or headmaster of a local government high school or higher secondary school.
  • An agent or manager of a nationalised bank.

Who should sign the Form of Discharge in case of LIC policies?

The Form of Discharge (Form 3801) should be signed by:

  • The nominee in case a nomination exists in the policy or
  • The assignee if the policy was conditionally or absolutely assigned or
  • The holder(s) of legal representation obtained if the policy was neither nominated nor assigned or
  • All Class 1 heirs of the deceased policyholder according to the relevant personal law applicable if LIC' s Divisional office has waived proof of title.

How can an NRI pay the premium on his LIC policy?

The manner of payment of premiums under the policy is:

  • For Rupee Policies on NRI's.
  • By direct remittance from abroad through Banking Channels in approved manner (preferably by Indian Rupee drafts drawn in favour of LIC of India) or by remittances through postal channels like Foreign Money Order.
  • By payment out of funds held in Non-Resident (External) Account or Foreign Currency (Non- Resident) Account with a Bank in India.
  • By cheques drawn by Non- resident policy holder on Bank Accounts held in India in his own name (either solely or jointly with another member of the family) whether or not the account has been designated as non-resident.
  • By cheque drawn on account maintained by resident parent or spouse of policy holder in their own name or joint names with other close relatives.
  • By the absolute Assignee in India wherever such policies have been absolutely assigned to a resident in India.
  • By the employers in respect of policies issued to their employees who have been deputed abroad by them.
  • Premiums can be paid in cash by a resident parent or spouse of the non-resident policyholder subject to his / her submitting a letter stating the relationship with the policyholder.
  • Premiums due on policies issued to Indian students who have gone abroad for higher studies may be collected in Rupees out of the Resident Bank Account in India or any of their representatives in India by cash or cheques.


In respect of premiums collected in cash from sources mentioned in the last five instances, it should be noted that the policy moneys cannot be paid abroad in foreign exchange but has to be paid in India only.

For policies held on foreign register of LIC:

Premiums on foreign currency / Rupee policies issued by overseas of LIC and held on their foreign register should be collected only in foreign currency.

Can NRIs take Foreign-Currency policies of LIC?

In India, LIC markets only Indian rupee-currency policies. However, clients residing in U.K, Fiji and Mauritius can take Pound Sterling , Fijian Dollars and Mauritian Rupees denominated policies respectively from LIC branch offices in those countries.

Similarly, LIC (International) E C, Bahrain - a subsidiary of LIC operates among NRIs in Bahrain, Saudi Arabia and Kuwait. Clients can take US Dollars, Bahrain Dinars and Saudi Riyal currency policies from them.

What are the types of schemes offered by LIC to NRIs ?

All individual schemes marketed by LIC in India are available to the temporary NRIs holding Indian Passports. Foreign Nationals of Indian origin can take LIC policies during their stay in India.

However, joint life plans having term insurance element and plans having health insurance are not allowed.

What is Nomination ?

When you make a nomination within your life insurance policy, as the policyholder you still continue to be the owner. However after your death, the nominee who did not have any right under the policy while you were alive becomes the rightful recipient who will receive the policy monies. He or she may not be the rightful heir in which case the legal heir can implement his rights and claim the monies from the nominee.

What is an Annuity?

An Annuity is an investment you make, either in a single lump sum or through installments paid over a certain number of years, in return for which you receive a specific sum every year, or every month either for life or a fixed number of years. Upon the death of the annuitant, or at the expiry of the period fixed for annuity payments, the invested annuity fund is refunded usually along with a small bonus.

Annuities differ from all other forms of life insurance in one fundamental way - They do not provide any insurance cover but offer a guaranteed income for a certain period or for life. Typically annuities are bought to generate income during one's retired life, which is why they are also called Pension Plans.

Annuities are an investment that offers you an income that you cannot outlive and provides a solution to the biggest financial insecurity of old age that you will outlive your income.

What is Nomination ?

When you make a nomination within your life insurance policy, as the policyholder you still continue to be the owner. However after your death, the nominee who did not have any right under the policy while you were alive becomes the rightful recipient who will receive the policy monies. He or she may not be the rightful heir in which case the legal heir can implement his rights and claim the monies from the nominee.

What is the Unit-Linked Insurance Plan (ULIP)?

The Unit Trust of India (UTI) operates a Unit-Linked Insurance Plan (ULIP) in collaboration with LIC and the General Insurance Corporation (GIC) of India.

ULIP is a contractual savings-cum-insurance plan that offers the following features:

  • High returns
  • Maturity bonus
  • Life insurance cover
  • Free accident cover
  • Safety of capital
  • Tax rebate

It is open to any resident of India who is above 18 years of age. Individuals less than 55 years and 6 months of age can join the plan for 10 years and those less than 50 years and 6 months for 15 years contributing 1/10th and 1/15th of the target amount every year, respectively.

What is Surrender Value?

When a policyholder wishes to encash his policy due to urgent need of cash he returns back the policy to the insurer for which he is entitled to an amount. This is called surrender of policy or termination of the policy before the stipulated period. Policies can be surrendered provided it is kept in force for atleast 3 years. If it has been in force for five years the bonus is also added to the surrender value.

What are the conditions under which my LIC policy may lapse?

If the policyholder fails to pay his premium within the days of grace provided after the due date, the policy lapses. The grace period in case of yearly, half-yearly and quarterly modes of payment is one month and in case of the monthly mode of payment, the grace period is 15 days.

What is the Double Accident Benefit (DAB) on LIC policies?

Upon payment of an additional premium against a sum assured you could opt for a very attractive Double Accident Benefit

The benefit provides for the payment of an additional amount equal to the sum assured in the case of death of a policyholder owing to any accident. The death claim under Double Accident Benefit becomes double of the normal claim.

If owing to an accident, a permanent and total disability occurs to the life assured, all the subsequent premiums are waived off and the policy is still kept in full force. Additionally, LIC will pay the policyholder an amount equal to the original sum assured through monthly installments spread over 10 years. Upon maturity of the policy, the sum assured and the accumulated bonus amount is payable as well.

To be eligible for this benefit, the policy should be in full force for the full sum assured before the policy anniversary and the life assured must not be over 70 years of age either.

Is there any other benefit of buying insurance other than the risk cover?

There are several benefits of buying insurance. Other than the risk cover the most important you receive Income Tax Relief under Section 88 of the Income Tax Act, which means premiums paid by you, reduces your tax liability. Such exemptions are also available for premiums paid on health covers.

Besides it helps you build up compulsory savings.

Also through a valid assignment the beneficiaries of the policy are protected from claims of creditors. Life insurance policies can also be a great source of help as a security while availing of loans. One could also surrender his policy in case of emergencies.

For a policy taken under the MWP Act 1874, (Married Women's Property Act), a trust is created for wife and children as beneficiaries.

What do you mean by Guaranteed Additions on LIC policies?

In case of some policies, the Life Insurance Corporation provides the policyholder with the bonus or the profits declared as a certain amount per thousand of sum assured. This assured bonus will be given to the policyholder whatever be the performance of the corporation for the period in question. These are Guaranteed Additions and are paid at the end of the term of the policy or in case of the early death of the policyholder.

2. Non Life Insurance

Can motor policies be issued for a longer term than a year?

No policy can be issued for a period of more than one year ordinarily. However, for motor cycles and scooters only, the Act Policy in Form A, which is the minimum compulsory insurance required by law, may be issued on a long term basis. Such policies once issued remain valid up to the cancellation of the registration of the vehicle by the Regional Transport Authority (R T A).

This insurance is particularly useful for owners of comparatively older vehicles, for whom the Comprehensive Cover becomes a little too expensive considering the age and market value of the vehicle. The premium for such insurance is charged in accordance with the Long Term Act Policy Premium Schedule.

Can motor vehicles be insured against fire and theft risks only?


Private Cars, motor cycles, scooters and commercial vehicles can be insured against Fire & Theft Risks only, provided they are laid up in the garage and not in active use. The insurance company under such cover shall only be liable to indemnify the insured against loss or damage by:

  • Fire
  • Explosion
  • Self-Ignition or Lightning
  • Burglary
  • Housebreaking or Theft and Riot
  • Strike
  • Malicious and Terrorism Damage

In case of vehicles that are in use, Fire & Theft Risks only can be covered with the Act Liability Risks.

Does a third party claim affect the bonus/ malus rate under the comprehensive motor insurance policy?

The Bonus/Malus concept is applicable only to the Own Damage Section of the Comprehensive Policy.

The discount or loading is accordingly allowed or charged on the Own Damage portion of the premium. The Act Liability or Third Party premium is absolute. There is no scope for adjustment. As such, an accident giving rise to a Third Party claim, whatever the amount, does not affect the application of Bonus/Malus at the time of renewal of the policy.

Are accessories and extra fittings of the vehicle covered under the comprehensive motor insurance policy?

Accessories are generally those parts which are directly supplied by the manufacturer along with the vehicle. But they are not essential for the running of the vehicle. The engine of a vehicle is essential for its running and obviously not an accessory. A spare tyre, is however an accessory. Loss or damage to accessories are covered only if they are on the vehicle.

In case the accessories are detached from the vehicle and kept in a garage and are destroyed by fire, they are not covered. Radios, tape recorders, air conditioners and other electrical or electronic items are fitted by vehicle-owners. These cannot be considered as accessories. These items qualify as extra fittings and the owner has to specifically describe and mention separate values towards them at the time of insurance.

Only on payment of the requisite additional premium, can they be covered. However, if such items are built-in and supplied by the manufacturer, will be treated as accessories and need not be separately insured.

What happens if at any point of time there are in existence two policies for insurance of a vehicle?

This situation is one of Double Insurance. In such cases, one of the policies is cancelled, provided there are no claims reported in either of the policies.

Refund is granted on a pro rata basis for the period both the policies are in force concurrently. If one policy is applicable during the period 1.1.2000 to 31.12.2000, while the other is from 1.3.2000 to 28.2.2001. In case the first policy is cancelled on 1.4.2000, refund is made on pro rata basis for the period 2.4.2000 to 31.12.2000. In case the second policy is cancelled on 1.4.2000, then the refund is made for the period 2.4.2000 to 28.2.2001.

However if there is a claim on 1.4.2000, clearly both the policies will cover it. In such cases, the Contribution Condition of the policy is invoked, which states that each of the policies will bear its rateable proportion of the claim.

What happens if there is a dispute regarding claim settlement between the insured and the insurer?

The most common form of disputes that arise between the insured and the insurer is with regard to either admission of liability or the quantum of the claim.

In case of disputes regarding quantum of the claim, where the liability under the policy is admitted by the insurers, it is a condition of the policy that such disputes be referred to an arbitrator, as per provisions of the Indian Arbitration Act,1940.

In case the decision of the arbitrator is disputed by any party, then that party can approach the proper forum of either the Consumer Forum or the Civil Court. Disputes regarding admission of liability is always referred to the Consumer Forum or the Civil Court.


1. Mutual Fund & Equity

What if a fund sells a scheme to another fund?

If the fund plans to sell a scheme to another fund the asset management company has to take the permission of 75 percent of unit holders or allow them to redeem without any exit load. This does not mean that the investor has nothing to worry about.

You need to find out whether the scheme is going to be managed by a different mutual fund and whether it suits your objective. Also find out the past performance of similar schemes. Note that such a change may have a bearing on the future financial performance of that fund. In case you are not comfortable with the various changes associated with the fund ship out.

What if a fund decides to end its operations?

In such a case the trustees have to send a notice to the Securities Exchange Board of India (Sebi) explaining the reason for winding up. The notice also has to be published in two national dailies and a vernacular newspaper belonging to the region where the fund is formed.

What is a growth stock?

A popular investment style whereby fund managers identify companies showing promise of above-average earnings through capital appreciation. Stocks are held primarily for price appreciation as opposed to dividend income. Thus the fund managers of the growth stocks are willing to pay a premium to acquire a stock if they feel it has the further growth prospects. Growth investing is an alternative to value investing.

What is passive investing?

This is the investment style espoused by index fund managers who simply invest by benchmarking their portfolio to a common stock market index like the BSE-30 or the SP CNX-50. The fund manager only invests in stocks in the index stocks in exactly the same weightage. The attempt is to simply replicate the benchmark index, as closely as possible and therefore it is called passive investing.

What are Gilt schemes?

Gilt schemes invest in government bonds, money market securities or some combination of these. They have medium to long-term maturities, typically of over one year and have moderate returns. Since the issuer is the central or state Governments, these funds have reduced risk of default and hence offer better protection of principal.

What’s the advantage of investing in ELSS?

According to the central government’s Equity Linked Saving Schemes (ELSS) guideline, 1992 and the amendment in 1998, these schemes offer tax rebates to the investor under section 88 of the Income tax act, 1961. Under Section 88 of the I.T. Act, 1961, one gets a tax rebate of upto 20% of the amount contributed to ELSS schemes subject to a maximum investment of Rs. 10000/- within the allowable limit under section 88. Also these schemes generally diversify the equity risk by investing in a wider array of stocks across sectors.

What are a fund’s net assets and portfolio?

Net assets is the total value of a fund's cash and securities less its liabilities or obligations. A portfolio could be a mixture of stocks, bonds, money market instruments and cash.

2. Real Estate

What is the difference between Built -up Area, Built -up Carpet area ?

Carpet Area: This is the area of the apartment that does not include the area of the walls i.e. the area of the apartment that a carpet can cover.

Built-Up Area: This is the area of the apartment that includes the area covered by the walls. Super Built-Up Area: This includes the built-up areas such as the lobby, lifts, stairs etc. This term is therefore only applicable for multi-dwelling units, such as flat complexes

What are Capital Gains on property purchase?

Property is considered a capital asset and Capital Gains Tax is levied on the gains arising from the sale of property. Such gains are calculated after adjusting the inflation rate, transfer and renovation charges.

What is Stamp Duty? Who is liable to pay Stamp Duty? Do I get tax benefits on Stamp Duty?

Stamp Duty is the tax paid for the legal recognition of property. It is paid by the home buyers. You can claim tax incentives of up to Rs 1.5 lakh on stamp duty and registration charges on a new property purchase or construction of a house. However, these benefits are available for only one self-occupied property.

Why is it considered necessary to register property? What is the purpose of registration?

By registering the transaction of an immovable property, it becomes permanent public record. Title or interest can be acquired only if the deed is registered.

How is the market rent determined?

There is no prescribed norm for determining the market rent rate though it can be easily found out by approaching individuals such as brokers, registration authority, etc.