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  • How to read a benefit illustration of a ULIP policy

    How to read a benefit illustration of a ULIP policy

    A life insurance policy protects you and your loved from the various uncertainties of life. Basically, it covers you from life risk. This cover is in the form a life cover that you, as a policyholder, get when you purchase a life insurance policy. One of the types of life insurance policies is the ULIP policy. This policy provides the dual benefit of investment and life insurance cover to the policyholder and their loved ones. Depending on your requirements, there are different types of ULIP policies to choose from. If you are planning to buy this policy, it is important that you read the benefit illustration of your respective policy. Read on to understand more about ULIP and its benefit illustration (BI).

    What is ULIP policy?

    When browsing through the different life insurance products, you might come across a product called ULIP. What is ULIP policy? ULIP, which is short for Unit Linked Insurance Plan, is a life insurance policy that allows the policyholder to gain wealth through investments. However, it also offers the policyholder life insurance cover from different life risks. The premium that you pay towards the policy is split into two: half is diverted towards the life cover and the other half is used for investments. You can invest in equity funds, debt funds or in both based on your risk appetite and life goals.

    What are the types of a ULIP policy?

    ULIP policies are based on the types of funds under the policy for investment. The types are:

    1. Equity funds: Investments are made in stocks of market-listed companies. This fund has a huge risk factor and offers higher returns. It is usually the choice of people who have a higher risk appetite.
    2. Fixed income funds: Investments are made in government securities and bonds and corporate bonds that allow a fixed steady income. This fund carries low risk and offers low-to-medium returns.
    3. Liquid funds: Investments are made in cash funds, money markets, and bank deposits. This fund carries a low risk factor and offers low returns as compared to equity and debt funds.
    4. Balanced funds: Investments are proportionately balanced between equity and det funds. This lets the investor get good returns without a high-risk factor.

    Which fund should you opt for?

    Depending on what your life goal and objective is, the fund should match accordingly. If you want to secure the future of your child or your loved ones, investing in debt funds or balanced funds would be beneficial. If your goal is wealth creation, you should opt for equity funds due to its high returns. 

    What is a benefit illustration?

    As per the IRDAI mandate, life insurance companies are required to provide benefit illustration to the interested buyer. Benefit illustration of a ULIP gives the customer an idea about things such as how the premium they pay would get invested, what would their returns be based on the growth of their funds and what charges would be applied. It also helps the customer get an idea about how their funds will grow during the term of their policy.

    How to read a benefit illustration?

    The benefit illustration of your policy contains many terms that you may find confusing at first. However, they are quite easy to understand. Here are the main terms that you should be aware of when reading a benefit illustration:

    1. Policy year

    This shows you the time period of your policy and how long you will be invested in the ULIP policy that you purchase.

    1. Premium

    This shows you the amount of premium that you will be paying towards the policy on an annual basis.

    1. Allocation charges

    Allocation charges are applied on the premium that you pay for the policy.

    1. Policy administration charges

    These charges get deducted from the fund value of your policy. The charges could either be fixed or can be variable.

    1. Management charges

    Your insurer charges you for managing your funds for the duration of the policy. These charges are known as fund management charges.

    1. Yield

    Yield is the amount that you gain in returns from your ULIP policy. These returns are calculated at 4% and 8%, based on the mandate set by the IRDAI.

    1. Surrender value

    This shows the amount that will be paid to you if you surrender your ULIP policy before the date of maturity. Do keep in mind that ULIPs have a lock-in period of 5 years.

    When you plan on purchasing a ULIP, always remember to ask for the benefit illustration for your policy from your insurer. If you plan to buy a ULIP online, you will be able to check the benefit illustration on your system itself.

     

  • Invest Money for old-age Provision

    Invest Money for old-age Provision

    Investing money is an art and best practice. People must aware about this only when you have settled your debts and looked after reserves can you take care of your retirement savings. As an employee, you are usually compulsorily insured through statutory pension insurance. However, the statutory pension will generate less and less income in old age in the future. Therefore you have to make additional provisions. This can be done, for example, with the pension, with the state-funded pension or with a company pension scheme.

    For those who prefer to make private provision without receiving special support, choose, for example, classic or unit-linked private life or pension insurance. You pay the contributions for this from your net salary. However, consider whether you can pay the sum constantly over several years. If your income is not secure because, for example, you only have a temporary employment contract, you may not be able to pay the installments at some point.

    As a saver, you can of course also save flexibly without any life or pension insurance. This is possible, for example, with a savings plan on exchange-traded equity index funds. Think about how much money you can and would like to put aside each month. Not everyone is ready to make noticeable cuts in everyday life. For a better estimate of how much money you should save, you can use the pension estimator of the Institute for Retirement Provision. Even small installments of 50 to 100 dollars can be invested in an ETF. It is important to stay in the long term and choose a fund that bundles as many different stocks as possible to compensate for fluctuations.

    Tip: As you get older, you should move from building up to securing your assets. Anyone who owns a securities account gradually shifts: from high-risk equity funds to low-risk investments, such as open-ended real estate or pension funds.

    Open a life insurance policy

    Taking out a life insurance policy is often recommended to those who decide to take shelter from any future unexpected events and unwanted events. Today there are several agencies that offer investment plans able to meet all needs, so much so that sometimes the payment of a small monthly fee is enough to cover themselves or their family members from the occurrence of possible accidents for example death, disability, accidents, job loss etc.

    Rely on a professional

    If the financial planning of your expenses is anxious or if you are simply afraid of not doing enough, you can always evaluate the idea of ​​being followed by an expert. A serious and reliable financial advisor, being a professional in the sector, can help in all this.

    Last Words

    A recent Northwestern Mutual survey confirmed that people who are assisted by a financial advisor, and who together with a professional identify valid tools and strategies for planning their investments, are less afraid to face the future. They manage their savings more confidently and face life with more confidence and stability, both financially and personally. Because money will not make you happy but, certainly, knowing that you have a little bit of it when things go wrong can certainly help you live better.

    Invest is important for all which is essential at the time of old age, Time is very short in our life and we can say that time is money. investing is required time to time in our every station of our life. during our old age, it will help to manage our life otherwise people’s life will be valueless. This is the best time to think about the importance of investment targeting the old age vision. Everyone must note it to get the things done for our better future.

  • All you should know about Cyber Insurance Policy

    All you should know about Cyber Insurance Policy

    Cyber Insurance Policy is a fundamental tool to help companies protect their assets against possible security leaks, hacker attacks, computer viruses, dishonest or negligent employees, information leakage and identity theft, among others.
    Cyber risk insurance covers the insured against attacks by viruses and hackers. They are designed to protect companies from the risks, both online and offline, to which they are exposed and which can lead to large losses.
    Main insured of cyber risks
    • The society
    • Administrators, managers or partners
    • The head of security, director of compliance or director of the internal legal advice of the company
    • The employees
    Coverages adapted to the needs of each company

    • Responsibility for claims for breach of data privacy: a policy covers the damages and expenses of defense against claims arising from a violation of data and / or confidential information, both in paper and digital format.
    • Responsibility for claims regarding network security: it covers the damages and expenses of defense against claims derived from a failure of network security.

    • Responsibility for claims for media activities: it provides protection for damages and defense costs derived from claims for the management of content on websites and social networks.

    • Information retrieval and lost data: it covers the cost of recovering your data derived from an incident that consists of hacking, human error, programming error, denial of service attack, malicious computer programs, use or unauthorized access, power failure, network overload.

    • Incident response expenses:
    Service of attention to incidents, from the hand of experts consisting of

    A. Computer forensic services.

    B. Notifications to the consumer within the framework of existing legal provisions.

    C. Legal advice for the response to regulators in the framework of data protection regulations.

    D. Voluntary information to the people whose data has been compromised.

    E. Support service of a call center for notification purposes.

    F. Consulting services regarding fraud to people whose data has been compromised.

    G. Expenses for credit control, identity theft control, social media control, credit freezing, fraud alert services or softwareof fraud prevention.

    H. Identity restoration services
    I. Image restitution services.

    J. Legal advice for the sole purpose of establishing your compensation rights under an agreement with an external provider.

    • Cyber extortion: Financial protection for an extortion event. Under this extension we will cover the expenses generated by the hiring of specialists, in addition to the damages and losses necessary to end the extortion.
    • Loss of profits due to interruption of activity:Financial protection for the paralysis of the activity derived from an incident that consists of hacking, human error, programming error, denial of service attack, malicious software, blackout, network overload, use or unauthorized access.

    • Administrative sanctions: a policy covers the sanctions imposed by a supervisory body under an administrative or regulatory procedure. Within the framework of coverage liability for breach of privacy and responsibility for network security.

    What measures should a cyber-insurance policy take in cyber security?
    The ESET Latin America team, a proactive protection laboratory for security threats, made five recommendations that cannot be lacking in a company, because they are the basis of corporate management:
    1 – Antimalware software
    According to the report last year almost half of the companies in Latin America suffered a malware infection. And in addition, 16% described that these infections were with ransomware variants, a malicious code that encrypts the information or blocks the computer and then asks for a monetary rescue so that victims can access them again. For these reasons, robust security software is fundamental in any type of security plan.
    2 – Email
    The mails are still the most used attack vector because it is massive and economical to propagate an attack. It is necessary to have security measures in the servers and anti-spam solutions. In addition, the important thing is to educate the members of the companies so they know that they should not open files that may seem suspicious and ask certain questions before clicking.
    3 – Software updates
    It is a fundamental and universal control for any type of company. Updates not only bring about improvements in operation and code corrections, but the use of older versions represents a risk, especially if they are applications used to manage the business. If there are vulnerabilities or unpatched errors, they could be exploited to compromise a team or a complete corporate network.

    4 – BYOD
    The use of personal equipment for corporate purposes is a reality. SMEs, for reasons of budget, cannot always equip their entire staff with corporate equipment for work. Therefore, an organization must consider educating employees on how to use their equipment correctly, and invest in security solutions for such equipment; especially because they handle company data that, if compromised, can cause incident that affects the continuity of the business.

    Conclusion: Many organizations start from the premise that the information they handle is not important but, in fact, cyber criminals start from that premise to attack those who believe they go unnoticed. It is vital to have not only technological solutions such as an antivirus , but also a correct management of these controls and work to raise awareness among employees, who represent the weakest link in the chain.