Choose between Direct and Regular plan

Direct_plan_Vs_Regular_plan

When you buy something, you will always try to cut expenses. Suppose if we buy any product online, you prefer to have free delivery. Why you do that? In order to reduce costs, you’ll try to cut the additional expenses which you don’t want to incur. Here, you do the same with the Mutual Funds.

In the market, we can buy Mutual funds in 2 ways:

  1. Directly from Asset Management Company (AMC) – Direct Plan
  2. We choose to buy through an intermediary – Regular Plan

In Regular plan, you buy mutual funds through an intermediary such as brokers, distributors or advisors. And these agents will charge a commission for the services they provide where your expenses on investments will be high. As you know that these brokers will never sell you the products that you need. They always try to push the schemes which earn a good profit to them.

Now let’s look at Direct Plans. Direct Plan is a new regulation which is enforced by SEBI on January 1, 2013. In the Direct Plan, as an investor, you can directly buy the mutual funds from the Asset Management Company (AMC), where there will be no involvement of any brokers or intermediaries and these funds which you buy are commission free.

The great advantage of Direct Plans is that NAV (Net Asset Value i.e., the value per share) is more when compared to Regular Plan which means that you earn more on your investments.
For example, if you invest Rs 10 lakhs in both the Direct Plan and Regular Plan. The direct plan offers 17- 19% of returns whereas the Regular Plan offers 14-15% of returns. Thus, With Direct Plans you can earn 1-15% more returns than Regular Plans.

And here you have a platform to make an investment in Direct Plan- MyWay Wealth with zero commission and zero fees. MyWay Wealth offers you a wide range of funds and helps you to choose the right one that suits your investment needs. To look into more features of MyWay Wealth – download the app, complete KYC and get access to top recommended funds.Screen_Shots

How to decide on Direct plan and Regular Plan?

  • If you already have an experience of investing in mutual funds, it is recommendable to go for Direct Plan, since you will have enough knowledge on mutual funds.
  • If you are a beginner then you can opt for Regular Plan and it is recommendable that you can switch to Direct Plan once you gain knowledge and experience in investing.

So don’t miss out on those 1.5% extra return. Choose MyWay Wealth and begin your journey to fulfill your dreams.

You are unique and so is your Investment!

It is’nt as bad as you think

Family protection

“Someone is sitting in the shade today because someone planted a tree a long time ago.”

–Warren Buffett

It is rightly said that “Health is Wealth”. Planning for medical costs is one of the important aspects of your financial planning. It is very important to ensure that you and your family are secure in the future both financially and medically. It’s more challenging to meet the medical costs over your savings. If you have a “Good Policy”, there is no need to dip into your savings.
We have seen instances where people will be saying that they purchased a cover that will not bear the entire medical expenses or they purchased a wrong policy which they got know after reaching the hospital.

What is Medical cover?

Each time we go to a doctor for viral fever, we never feel that the cost is high because we choose a doctor based on our spending capacity. But when you have some serious health-related issues where the cost for the treatment is very high and you’ll be felt with the only options- paying the cost from your savings.
So, to overcome such situations we buy Medical covers where you will transfer this risk to an insurance company for a price called “Premium”. If you buy a Medical cover, you get reimbursement of what you had spent and at times you may not get the entire amount (depends on the type of cover you buy).
Buying a good medical cover is a great deal because as of today you have more than 30 companies that offer a medical cover, also you have different policies wherein you’re supposed to choose a policy that suits you by going through the entire Boucher (which we usually don’t do).

Do I need to cover?

Yes, every individual should buy a medical cover to have a secured life. Generally, we will find the need to buy cover unless we face the situation or when we realize the importance of having a cover- how it will lend you a helping hand.

  • Always buy a policy even if you are covered by your office. It’s okay to have a double insurance cover.
  • People who are covered by government i.e., government officials don’t have to buy a cover.

Who can’t buy a cover?

  • People who are aged i.e., above sixty- getting a cover is difficult. This happens because companies are reluctant to cover older people and it also reduces the choice of having a good cover.
  • People with pre-existing diseases are not covered.

How much do I need?

Again this depends on the place where to live, what kind of hospital you want to go to and other concerns which you may have.

  • Generally, everyone should have a basic cover of 3-5 lakhs. Consider 3 lakhs for people who are from a small town and 5 lakhs for the people who are wealthy.
  • For the Nuclear family- it is good to have “Family Floaters” (a health insurance plan) that provides a cover to all the members of the family. Example: if you have a family floater of Rs 15 lakhs- any one or all the members in the family can use the cover in case of hospitalization. Paying premium feels heavier but you can see the usefulness of the premium paid when you’re hospitalized.

What policy do I buy?

Before buying a policy, research about the insurance company hospital reach. You need to know if Third-Party Agent (TPA) service is good or not and know about the claim experiences. You should be aware of some policies that will not pay the entire medical expenses, this is because you would have signed up for “Co-pay” (an obligation that you have agreed upon to share the medical expenses with the insurance company).
The cheapest policies are not always a good plan. Yes, the low premium can be a factor of your choice to choose a policy but it shouldn’t be the only factor.

Performance can be judged based on three factors:

  1. Price
  2. Benefits
  3. Claims

Price:

It’s important to know the cost of the policy both in terms of present and future perspectives. When you buy a term cover your premium gets locked, but the premium of medical cover changes as you age.

  • Compare the prices of the policy of different companies as of today and observe the changes in prices.
  • Ask your agent to show the price comparison at ten years difference. Suppose if your age is 40 ask for the price of the policy as it is today when sold at 50, because your policy may cost the least today, as time flies it becomes expensive.

Benefits :

You need to find out the policy which gives at least these benefits.

  • Look for the policy that doesn’t have a “Co-pay” clause wherein you need to share a certain percentage of cost with the insurance company. You can even do this by searching on the net against policies that have a complaint related to the co-pay clause.
  • Look for a pre-existing disease clause. People with pre-existing disease find it difficult to get a cover. It’s better to disclose your medical status, else they will have a tool in their hands to refute your claims.
  • Check if your policy has a “disease waiting period”. Usually, companies will have a period of 30-90 days during which they will not pay any claims – ”Waiting Period”.it’s better to look for a policy which doesn’t have any waiting period on the disease. Ask the company to give a list of all the diseases that fall under this clause.
  • Have a look at “sub-limits”, you have to look for this very carefully because these are the limitations on what the company will pay you. This clause will reduce the claim amount even more.
  • Know the exclusions- it’s good to get a list of all the diseases, conditions and medical services that are excluded in the policy.
  • It’s good to know on pre and post hospitalization costs that the policy will cover.
  • If you don’t make any claims in a year, you will be rewarded by the insurance company. It’s known as ‘No-Bonus Claims’ (NBC) where a certain percentage of cover will be raised for the same premium amount.

Claims:

  • Know the claim settlement history of the company.
  • Know the process for claiming the policy.
  • Look for the policy that has a good rating and also search for these parameters such as how many have made a claim and how many have complained.

What to do if you’re not getting a policy

1. Because of pre-existing diseases:

If you are not covered because of pre-existing diseases

  • You can buy a policy with sub-limits.
  • You can buy a policy which as “Co-pay clause”.
  • Buy a policy that has an exclusion period for your existing disease.

If you’re totally unable to get a policy, then you can start making investments in long term instruments, so that you would be able to cover your medical cost.

2. Because you’re aged:

Insurance companies are very reluctant to cover older people. What to do? The best way to get insured is by buying a “Top-Up Plan”, which is a kind of policy that will pay your medical expense after you pay a certain threshold amount.

3. Because of critical illness:

Critical illness like cancer can be covered as a part of the contract of your medical cover. Illness includes cancer, heart attack, kidney failure, stroke, major organ transplant, end-stage diseases of lungs and liver.

MyWay Wealth offers the purest form of life cover which is Term Insurance. Wherein you can get a cover of 1 crore to your family but just making a monthly payment between 600-700/-

Term Insurance

Hence buy Term Insurance on MyWay Wealth today and make your first step to Protect Your Family. Remember!

You have worked hard all your life, now make it work for you.

Gold as an Asset Class

gold asset

“I like gold because it is a stabilizer; it is an insurance policy.”

–Kevin O’Leary (Canadian Businessman)

“Gold is the money of Kings”. Gold has a significant immensity in India. We as a whole love to wear gold jewels and in fact, they turned out into materialistic trifle. Be that as it may, shouldn’t something be said on gold as an investment.
You can buy gold in a different form other than physical form. You can get Gold as a mutual fund, you can even buy gold bonds and the trend of digital gold. The gold fund offers investors the convenience of buying pure gold at a low cost. You buy gold in the form of units and these units will be linked to market prices and you can sell gold whenever you want.

Let’s discuss in detail about gold in different forms.

  • Physical form:

Holding the gold in physical form involves high cost and less safety. Sometimes making charges will be as high as 14-18% of the cost of gold. Buying gold in the form of bars and coins also falls under this category. “Gold Saving Schemes”- where you deposit a fixed amount of money on a predetermined basis and on the maturity of a time period, you’ll buy the gold.

  • Gold Mutual Funds:

These funds invest in gold. The product called a Gold Exchange Traded Fund (ETF) was launched in 2007 and became popular as investors saw it as a good deal. You get these for a lower cost than buying physical gold and offer a 100% purity with no making charges. You buy a unit of gold ETF at the current market price of gold. One unit of ETF is equal to 1 gram of gold. You need to have a demat account to invest in gold ETFs. Gold funds allow a minimum investment of Rs 1,000 (as monthly SIP).

  • Sovereign Gold bonds:

Sovereign Gold bonds are the government securities issued by RBI(Reserve Bank of India). They are denominated in terms of grams. The investors can avail it through paying cash and on maturity the gold will be redeemed for cash.

  • Digital gold:

Digital gold is relatively very new to the market. It is very simple and transparent to buy and sell gold instantly. Physical gold has limitations on safety and security issues. But there is another gold investment option that overcomes all the challenges of holding physical gold and that option is “Digital Gold”.

Are you looking for the best platform to make a gold investment, here look at some of the features of MyWay Wealth:

  • You can buy 24k Gold and skip the responsibility of safe-keeping and traditional lockers.
  • You can get a free and secure locker from BRINK’s, a global leader in gold custodian services with 100% insurance cover.
  • Sell your gold with one click, anywhere and any time.
  • Get your gold delivered to your doorstep, hassle-free.

Pictures of Myway Wealth App

In Addition to 24k Gold, you can also invest in Gold with another option on MyWay Wealth. I.e. you can invest in Gold Funds through SIP where you can gain appreciation in gold value without the hassle of owning physical gold. You can start investing in gold with as less as Rs 500.

Embrace your investments through MyWay Wealth!

Self-Defense when it comes to Life Cover

Building Your Protection.

life cover

“Term life insurance is part of a good defensive game plan”.

Dave Ramsey.

Each time we go to the doctor for a fever, we don’t really think of the cost too much right? The fee is affordable because we choose our doctors given our own spending power. The prescription medicines also don’t break the monthly budget. But when you encounter serious cases like surgery for liver infection or a heart attack or a knee replacement, the cost plays a significant role.

How much cover do I need?

First, let’s understand what is Family Floater Medical Cover.

A family floater is a comprehensive medical cover for the whole family. Usually, the family floater plan covers the individual, spouse, and the children, but certain insurance service providers also have provision to provide cover for dependent parents, siblings, and parents-in-law.

For Example: If you have a 15 lakhs Family Floater Medical Cover for a family for father, mother and two kids – any or all of them can use the cover in case of hospitalization. For the years which you have made no claim the outflow of premium feels heavier and heavier. But it takes one way in the hospital to see the usefulness of the premium you have paid.

What policy should I buy?

First, a fall let’s understand “co-pay”:

Your health plan may require a copayment or (co-pay). Whenever you receive medical insurance. Co-pay is a charge that you need to pay in order to receive a specific medical service.

Let’s make it easy with an example:
Your policy has a co-pay clause of 10% and your medical expenditure is Rs 60000/- you have to pay 6000/- out of your pocket and insurer will cover remaining Rs 540000/-. You need to know that some policies will not pay the full amount because you signed up for something called co-pay. Which is Not exactly helpful! Whereas, some policies have limits to what you can spend on hospital services. You need to find out if the TPA (Third Party Administrator) service is good or not wherein you have to also make sure that if the hospital network is large or not.

  • One is how does it perform on the metric of price
  • Two does it perform on the metric of benefits.
  • Three is how does it perform on the metrics of claims.

PRICE:

It is important to know what the policy costs, right now and in the future and how much u would be able to get. Unlike a life cover, where your premium gets locked when you buy a term cover, the premium also changes in medical cover changes as we age.

BENEFITS:

We buy a medical cover so that when faced with a hospital bill, we don’t have to exhaust our savings. The deal is simple: you pay an annual premium when you get hospitalized, the insurance company pays your money.
But then it’s a complicated world. The insurance company has the ability to set up the game so that you lose.

You need to find out the policy gives at least eight benefits:

  • Ensure that you have a policy that does not have something called a co-pay clause.
  • Check for a pre-existing disease clause.
  • Check if your policy has a disease waiting period.
  • Check if your policy has sub-limits.
  • Check for exclusions.
  • Ask how much of the costs before and after hospitalization the policy will cover.
  • Ask for a list of day care procedures that don’t need you to stay.
  • Look at the no claims bonus feature.

CLAIMS:

Your search for that good policy is not over until you understand the claims history of the company you finally choose. You know telecom service is good or not when you use it. So these are the questions that you must think about at the time of buying your policy. Ask the agents these questions on claims before you buy.

  • How many claims does the company settle?
  • Look at the claim-complaints data and look for a policy that has less than thirty.
  • Complaints on every 10,000/- claims made.

What to do if you are not getting coverage because of a pre-existing disease?

You can buy a policy with sub-limits, co-pays and with an exclusion period for your ailment. The sub-limits are the limits wherein the policy will pay for certain diseases and for the room rent and the cost related to it will be paid. And co-pay is where you agree to share the cost with the company. These are restrictive but better than not having a policy.

Strategies for Senior citizens:

Let’s understand what is top-up-plan:
In simple words when you are hospitalized, the insurance will pay you the sum insured. So if you top up it will kick your certain threshold limit.

Here is an example:

Top up health cover
Rs 10 lakh cover
Rs 5 lack of threshold
Covers between 5-10 lakh only
Regular health insurance
Rs 5 lakh cover
Covers only up to 5 lakh

Along with your work cover, you should have a family floater. You live in a small town in India and have a family floater between 3 and 7 lakhs. You live in the metro have a minimum of 15 lakhs family floater. You are over sixty have a top-up plan to bump up your basic cover.

A Quick Take Away

We have understood the importance of a Life Cover, as it helps us to protect our loved ones. What happens if you are not around your loved ones? You still want them to be happy and secured right? Hence its also important to consider another variant of insurance which is “Term Insurance”.

Advantages of Term Plan:

  1. Term insurance is the simplest form of life insurance to understand.
  2. Term insurance is a sensible choice for people who are building a family.
  3. Lower initial cost when compared to an endowment plan.

MyWay screen shot

We all know insurance can protect your family. MyWay Wealth protects your family with Term Insurance. Protect your family today and be a Hero!

Happy Investing!!

 

Term Insurance

Term Insurance vs Other Insurance Policies

The life insurance you buy is the security blanket you carry for your family. There are many types of life insurance policies in India. Let’s take a look at them and understand why Term Insurance is the best option when it comes to life insurance:

1. Endowment Plan [Insurance plus Savings]

This life insurance plan gives you a combination of insurance and saving. The premium you pay is divided into two where a certain amount is kept for life cover, while the rest is invested by the insurance company. Sounds amazingly attractive right? Because here if you outlive the policy term, the company will offer a maturity benefit. Moreover, these plans promise to offer bonuses periodically, which are paid either on maturity or to the nominee under death claim. It sounds like it concentrates more on what you get when you live rather than what your loved ones get when you die, which is the whole point of life insurance in the first place. But on death, the maturity is payable to the nominee. But how much is the question!

Let’s say that you take an endowment plan for 30 years for which you pay a premium of Rs 20,000 – Rs. 25,000. What do you get in the end? The maturity sum received would be Rs. 10 lakhs approximately. Would that take care of all the troubles?

Hence it’s important to remember that the whole purpose of a life insurance policy is not to make returns rather, to protect your family in the event of your untimely death. It’s best not to mix life insurance with investment options. To make returns there are other options like Mutual Funds, that help you to earn substantial returns by making investments that are based on your financial goal and risk appetite.

2. Unit-linked insurance plan (ULIP)

This particular combination of insurance and investment is a comprehensive life insurance products that look to provide productivity towards the money invested. The premium you pay towards a ULIP goes partly as your risk cover (insurance) while the rest is invested in funds. You can invest in various funds (bonds, equities, debts, market funds, hybrid funds) offered by the company based on your risk appetite.

For instance, you take a ULIP for 20 years with premium payouts of 20,000 every year, and you have assured a sum of Rs 2 lakhs along with whatever amount you receive on an investment. The great thing about it is that you are putting your money to good use, but you might as well earn the returns through Mutual Funds that give you more flexibility as per your risk appetite and have the freedom to invest with complete transparency in secure platforms like MyWay Wealth.

3. Money Back – Periodic returns with insurance cover

A unique kind of insurance package, wherein a specific portion of the sum assured is paid to the insured on periodic intervals as a survival benefit. It serves like a source of income in a way along with the eligibility to receive the bonuses declared by the company from time to time. This is a way for you to meet your short-term financial goals.

For example, you take on a Money-back Policy for 20 years with Rs.20,000 – Rs.25,000 as your premium each year. You have been assured a sum of Rs.5 lakh which will be paid to you on regular intervals along with accrued bonuses

4. Whole Life Insurance – Life coverage to the life assured for whole life

Unlike the term insurance, which is for a specified term, whole life insurance covers you for your whole life, or in some cases, up to the age of 100 years. The sum of coverage is decided at the time you purchase the policy and is paid to the person you nominate the time of claim along with bonuses if any. But say you were to outlive the age of 100 years, the company would pay you the matured coverage amount.

In comparison to term plans, the premiums are much higher but it offers the facility for partial withdrawals after the premium payment term.

3. Term Plan [Pure risk cover] – Recommended

This is true life insurance. Unlike other life insurance products, this concentrates on one thing alone, covering for the loss of your life. This plan assures the dependants a specific sum of coverage with no hassles whatsoever. There is an option to widen up the coverage. The death benefit can be payable as a lump sum, monthly payouts, or a combination of both as per your choice. The only catch is that there is no payout if the life assured outlives the policy term.

For instance, let’s say you are a non-smoker male looking for a term life plan of Rs.1 crore cover. It will cost you approximately Rs.6, 800 to Rs.10, 500 every year. Doesn’t seem too costly, does it? Term insurance is best known for delivering high assured coverage at low premium rates. Say you’re the breadwinner of the family, in the case of your untimely death, your family is supported with an enormous amount of money which helps them to replace the loss of your income. Moreover, the money could be utilized to pay off loans, monthly household expenses, child’s education, child’s marriage, etc.

Now that you know Term insurance is the best form of life insurance. Don’t hesitate to buy a Term Insurance Plan with MyWay Wealth today.

Gold Investments

Different Gold investment options in India

You can invest in gold in various forms be it buying gold in the form of jewelry, coins, or bars in physical form, Gold Exchange Traded Funds (ETF) and the sovereign gold bonds (SGB ) in the paper-form. There is an option of gold mutual funds as well, where they are ‘fund of funds’ which further invest in gold ETFs.

 

NPS Taxation - Nirav Karkera

Decoding Taxation on NPS

Here are the Key points of what’s in this video:·

  •  An investor can withdraw 60% of the total corpus but up to 40% of Corpus withdrawn in a lump sum is exempt from tax.
  • Balance amount invested in Annuity is also fully exempt from tax.
  • Pension received out of investment in Annuity is treated as income and will be taxed appropriately.
FAQ on NPS - Nirav Karkera

Top Questions on National Pension Scheme

  • With NPS you can save up to INR.1,50,000 under 80C and once it gets exhausted you can save additional tax of INR.50,000 under 80CCD.
  • Every NPS subscriber is issued with a card having a 12-digit unique number called Permanent Retirement Account Number or PRAN.
  • If you do not contribute the minimum amount, your account will be frozen. You can unfreeze the account by reaching out to the POP and pay the minimum required amount and a penalty of Rs 100
  • The government will not contribute to your NPS account.
  • if the subscriber dies before the age of 60,  then the entire accumulated wealth will be payable to the nominee or legal heir (in absence of nominee). This amount will be tax-free at the hands of the nominee/heir.
  • Annuity income will be added to current income and taxed per existing personal tax brackets.
  • There is no investment return guarantee. Returns in NPS are market-based. The benefits will entirely depend upon the amounts contributed and the investment growth up to the point of exit from NPS. It is also linked to asset allocation you choose.
Direct vs Regular Plans

Why should I shift from Regular Plans to Direct Plans Mutual Funds?

Usually, when we place orders online we come across two products, those that don’t charge for delivery and the other that charges for the same. We normally opt or like the ones that are “Delivery Free”, right? The simple reason being we do not incur additional charges for our purchase and that reduces the burden of our expenses.
Even Direct Plans and Regular Plans of Mutual Funds work on a similar concept.

Regular Plans are mutual funds that you buy through an intermediary such as an advisor, distributor or broker. These agents charge commission, trail or distribution fee for the service they provide, so the total expenditure for your investment is high. And not always do brokers or intermediaries intent to sell plans that suit your financial needs, their primary objective would be to push the scheme and earn their share of profit.

Now let’s look at funds that are like delivery-free online products.
SEBI made new regulations with regards to Mutual Funds which was made effective on January 1, 2013, i.e. Introduction of Direct Plans. Direct Plans are those mutual funds in which investors can directly invest with Asset Management Companies (AMC) who do not involve intermediaries and do not charge any agent or broker fees. The advantage of Direct Plans is that the Net Asset Value (NAV – per share market value of a fund) is more when compared to Regular Plans implying that you get to earn more returns on your investments.

Let me help you understand with the help of an example:
A good investment of 2 lakhs in each Direct, as well as Regular plans for 20 years, yield different returns.

Direct Vs Regular

Direct Plans offer 42.2 lakhs which are 16.5 % returns, whereas Regular plans help you earn 32.7 lakhs which are approximately 15% returns. This is a clear example that Direct plan is more beneficial and hassle-free.
And did you know you can invest in Direct Plan Mutual Funds for zero commission and zero fees? Yes, “MyWay Wealth” app is India’s top trusted app for Direct Plan Mutual Funds, provides you this added advantage.

Who should invest in Regular and who should invest in Direct plans?

If you are a newbie in investing and have no prior knowledge of mutual funds, then initially you can opt for Regular plans. However, it’s highly recommended that you quickly switch to Direct plans once you have gathered enough experience and knowledge.

Now that you know Direct Plans are better than Regular Plans, Don’t miss on the 1-1.5% extra returns.

Save tax with ELSS

Save Tax with ELSS

Worried during tax saving season? Here is the best solution for your tax saving woes which is ELSS!

Equity Linked Savings Scheme is one of the most popular tax saving investment options among other tax saving option under Sec 80C. You might be going through the last minute rush for tax saving around Jan-Feb each year. Most of the people get easily distracted by just looking at ‘tax saving’ tag on investments available in the market and invest in products which don’t add enough value.

We are here to tell you how to avoid the last minute rush along with earning great returns.
Below are a few advantages of ELSS mutual funds:

  • ELSS scheme has the shortest lock-in period among other investment options available under Sec 80C.
  • Most investment options available under SEC 80C are government-backed securities which usually have lower returns. Equity returns have been the most in the long run as compared to PPF, National Savings Certificate, post office schemes, etc.
  • Low charges as compared to insurance schemes where your premium gets diluted into agent commission, management charges and hence get less value for your investments.

Investments in ELSS are available through SIP. If you start a Systematic investment plan in an ELSS, then each of your investments will be locked in for 3 years from the respective investment date. An investment of Rs.12.5k per month can help you save tax up to Rs.15K for the year in which investments are made. This is the best way to avoid the last minute rush during the Jan-Feb month.