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Tag: Insurance

  • How life insurance could serve as an inheritance

    How life insurance could serve as an inheritance

    Leaving an inheritance to their family may seem out of reach to many Australians. The latest ME Household Financial Comfort report (released June 2017) shows that nearly 25% of Australian households have no money saved for emergencies. Once funeral costs and other final expenses are factored in, many may be more likely to leave behind debt rather than an inheritance.

    Even for those with large estates, a planned inheritance can be chipped away at or delayed by taxes and legal fees. However, life insurance could allow you the freedom to spend your assets now and also leave behind an inheritance when you pass away.

    Avoid tapping into a planned inheritance

    Contrary to popular belief, spending does not appear to decline through a person’s retirement. A 2016 study by the Australian Centre for Financial Studies suggests that the yearly expenditures of Aussie retirees is relatively consistent.

    This may be an issue for anyone planning to leave a specific dollar amount to the beneficiaries of their will.Much retirement advice hinges on the assumption that you’ll spend less the older you get. But if spending remains more or less consistent, you may find yourself tapping into funds earmarked for a future inheritance to pay your bills.

    A life insurance policy can help supplement your estate. You can worry less about how much you’re spending in retirement, knowing your family could receive the insurance payout on top of any estate you do leave behind.

    Playing the waiting game                                                

    Even if you’re leaving an inheritance behind in other forms, it can take months for an estate to be settled. In Australia, the minimum time to finalise an estate is six months from the date of death.

    Why so long? The process of administering a final estate can be complicated. Once a will is located, the executor must meet with beneficiaries, determine the amount of assets and debts, and apply for probate before the estate can be distributed or trusts established. Most wills are sorted in about nine months, but more complicated estates can take years to fully settle.

    A life insurance payout can help your loved ones whilst they wait. Policies are typically paid out much sooner than an estate. The life insurance benefit can serve as a financial cushion, helping your loved ones financially until the bulk of their inheritance is received.

    Cover your funeral costs

    Helping cover final expenses is another way a life insurance benefit can serve as an inheritance booster.

    Funeral costs are on the rise, with services in Australia ranging anywhere from $4,000 to $15,000 or more. If you haven’t set aside funds to pay for a funeral, your family will likely need to cover the costs out of pocket. This can be “paid back” by any inheritance received once your estate is settled, but may put loved ones in a financial bind whilst they wait.

    Life insurance policies often offer an advance on the full payout specifically to help families quickly pay for funeral arrangements. You can also take out a funeral insurance policy, designed to help with the immediacy of funeral planning. Benefits are often paid within 48 hours of receiving the completed paperwork, providing families with peace of mind during a difficult time.

    Negotiating family politics

    The typical Australian family looks a lot different today than it did just a few decades ago. Divorce, remarriage and cohabitation are more common, with families often welcoming step-children, multiple grandchildren, de facto partners and new in-laws into their inner circle.

    A will is one way to stipulate who gets what after you pass, but they can be called into question. Almost anyone can contest a will. This can prolong the legal process of dividing the estate, and could fracture already tenuous family relationships.

    In these cases, a life insurance policy naming one or more persons as the beneficiary could be a tactful way to honour your relationships or supplement an inheritance. Life insurance policies are not part of a person’s estate unless the estate is specifically nominated as the beneficiary. By naming a spouse, family member or close friend as beneficiary, the payout will go directly to them, and can be kept separate from the contents of your will.

    Life insurance may not be the first thing that comes to mind when thinking about an inheritance, but as you can see, a policy could be a good option for creating or supplementing one. Take some time to consider your financial situation and what you want to leave behind for your family. A life insurance policy could be the tool you need to help protect their financial future, while also helping to form your legacy.

     

     

  • Advantages of HDFC Life ProGrowth Plans

    Advantages of HDFC Life ProGrowth Plans

    The ProGrowth Plans by HDFC Life are basically savings-cum-insurance plans that enable you to provide the best to your family today and tomorrow; even you would not be around. There are three kinds of ProGrowth Plans offered by HDFC which have discrete advantages. Given below are those three plan with their advantages:

    HDFC Life ProGrowth Plus

    HDFC Life ProGrowth Plus, a basic savings-cum-insurance policy that enables you, as a policyholder, to enjoy the benefits of a life cover and enjoy the comfort of making your investment plans by the means of it. This unit linked insurance plan helps you in making the most out of equities by the means of channelizing the saved funds effectively.

    Advantages

    • Flexibility to select amongst the 2 plan options as follows:
    • Life Option which offers Death Benefit
    • Extra Life Option that offers Death Benefit along with Accidental Death Benefit
    • Flexibility to plan your investments according to your risk appetite and return expectation
    • Flexibility to partially withdraw the funds from HDFC Life ProGrowth Plus Plan in order to meet various unplanned expenses
    • Under section 80C and section 10(10D) of the Income Tax Act, tax benefits of the HDFC ProGrowth Plus Plan are also remarkable. However, these benefits are subject to certain provisions contained in it
    • Paying premiums under the HDFC ProGrowth Plus Plan is very convenient as it offers various payment modes, such as internet banking, credit card, auto debit facility, or cheque

    HDFC SL ProGrowth Super II

    HDFC SL ProGrowth Super II is an enhanced savings-cum-insurance ULIP that helps you, as a policyholder, in planning the best for your family, with you and after you. This Unit Linked Insurance Plan is designed to support you in achieving long term savings for you and your family’s future.

    Advantages

    • This savings plan allows you to choose amongst the following eight plan options:
    • Life Option with Death Benefit
    • Extra Life Option with Death Benefit in addition to Accidental Death Benefit
    • Life and Health Option that offers Death Benefit along with Critical Illness Benefit
    • Extra Life and Health Option that offers Death Benefit along with Critical Illness Benefit and Accidental Death Benefit
    • Life and Disability Option that offers Death Benefit in addition to Accidental Total and Permanent Disability Benefit
    • Extra Life and Disability Option with Death Benefit in addition to Accidental Death Benefit and Accidental Total and Permanent Disability Benefit
    • Life and Health and Disability Option which offers Death Benefit addition to Critical Illness along with Accidental Total and Permanent Disability Benefit
    • Extra Life and Health & Disability Option that allows Death Benefit Plus Accidental Death Benefit, Critical Illness, and Accidental Total and Permanent Disability Benefit
    • HDFC SL ProGrowth Super II Plan ensures your family’s protection when you would not be around. In the unfortunate event of your demise during the term of the policy, the insurer will pay the Sum Assured along with the total fund value to the beneficiary or the nominee.
    • To avail this policy, you just need to fill up a short medical questionnaire, that might not necessitate you to undergo medical checkups
    • You can manage your investment funds either by switching funds from one fund to another or by redirecting future premiums into other funds
    • Then plan also offers some considerable tax benefits as per section 80C and section 10(10D) of the Income Tax Act.
    • The plan also offers convenient payment of premiums through multiple modes, such as – internet banking, auto debit facility, or credit cards

    HDFC SL ProGrowth Flexi

    It is wise to be prepared in advance so as to accomplish all the goals of your life in a way that safeguards your funds. To help you do the same, HDFC has designed SL ProGrowth Flexi Plan which is a savings-cum-insurance ULIP. This plan ensures financial security of your family in you absence by insuring you against unforeseen eventualities of life and helping you save for your future needs.

    Advantages

    • This investment plan provides valuable safeguard to your loved ones. In the unfortunate event of your untimely demise during the term of the policy, the beneficiary will be entitled to the greater amongst the Sum Assured of the plan or the total fund value of the insured life
    • When the policy matures, you can either receive the total Fund Value at existing unit prices j the form of a lump sum or go for the for settlement option
    • The plan allows you to channelize your corpus from one to another fund option at any time or forward the future premiums of the plan towards a different range of funds
    • The plan also offers tax benefits under the section 80C and section 10(10D) of Income Tax Act.

    Premium payment under this plan I also very convenient through its various modes, like internet, credit card, auto debit facility, or cheque

  • Hidden Costs of Running a Small Business

    Hidden Costs of Running a Small Business

    Many people dream about starting their business and being their own boss. Only one small part of them have a real and achievable plan, others just want to run away from boring 9 to 5 corporate jobs. First-time entrepreneurs often underestimate costs their new company requires which leads to financial troubles and possible bankruptcy. In this article we listed some of the hidden costs entrepreneurs tend to overlook.

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    Employee turnover

    Having talented and steady workforce is a life saver for any small business entrepreneur. Unfortunately employees tend to leave their firms in order to find better conditions, higher salaries or positions among company’s ranks. When this happens entrepreneurs face several different costs, including:

    Unemployment benefits claims- unemployment insurance costs will rise if entrepreneurs don’t contest their ex-employees benefits claims.
    Recruiting replacements- recruiting process can be very difficult and tiresome and it also costs a lot of money, especially if it is done by outsourcing HR firm.
    Training- new employees require long and difficult training. It can be internal or external and both kinds cost a lot. First one will take a lot supervisor’s time and the second will require fix rates that should be paid to licensed firms.

    Legal fees

    One time or another every entrepreneur is forced to settle some business dispute in court. The dispute can start from a simple copyright or patent infringement and it can turn into frivolous lawsuit that will hurt your company’s finances and reputation. There are plenty costs that are tied to this lawsuits and these are just some of them:

    Attorney costs- if you don’t want your company to bankrupt over a minor patent infringement or employee dispute you need to hire an expensive attorney;
    Settlement- best way to end a lawsuit is to reach a settlement, but this will also cost you a lot;
    Higher insurance costs- your insurance rates will definitely increase, after you have been sued by bogus lawyers;
    Lost opportunity- time you will spend on preparing your defense can be used in much more productive and profitable ways.

    Maintenance and office equipment costs

    Entrepreneurs usually count operating costs in their budget, but smaller maintenance and office equipment costs usually passed unnoticed, at least until the printer or the computer breaks down for the first time. Many companies that require lots of printed documents are closely following their monthly printing costs, and constantly trying to make their business more efficient. This is always recommendable, and cost-reevaluating concept should be applied for all equipment costs.

    Professional help

    Even in the first phases of your business development you will need professional help for various tasks. You will definitely need to hire some sort of tax lawyer or accountant to help your with your finances. Tax agencies won’t give you a free pass, which is why the whole accounting process should be done by professionals. Also you should be aware that tax laws defer from one country or state to another, which is why you need to hire local accountants. If you running your business in New South Wales, you should contact accountants form Sydney CBD, while if your company is registered in California hire accountants from LA, San Francisco, Oakland or some other city in CA.

    Insurance

    All smart business people know that insurance is very important for corporate level risk management. Other than regular insurance companies should choose policies that fit their business model in the best way. Some of the things your business should be insured from are: illnesses, negligence, work-related injuries etc. You should try to negotiate better deals with insurance agents. Try to tailor several policies and pay them in the bundle. Even if you succeed you should review your coverage at least once a year to see whether they meet your business needs.

    Even with all these unexpected costs, entrepreneurship is still one of the most dynamic and rewarding ways to continue your career after you quit your corporate job. With minding every detail and hiring professional help when you are in doubt, you will be able to boost your company growth and continue its development even in the toughest moments of your entrepreneurship career.