Planning to buy a Health Insurance? important factors to note!

Health Insurance is an essential product to avoid out of the pocket expenses for the health care needs. But when you will look for the health insurance plans available in the market, it becomes confusing to shortlist any one. Also, sometimes you buy a health insurance plan in a hurry to save your tax under section 80D. But, health insurance is an important investment and thus it is imperative not to make a decision in haste.Most important is the health coverage or the sum insured under the plan. An adequate health insurance coverage is the basic fundamental requirement. Don’t fall for cheaper plans which will also offer you a lesser sum insured as it might not be sufficient when it comes to getting a treatment done in your choice of hospital, rising medical inflation and rising health care costs.

Room Rent Limits

Room Rent limit is a part of an inpatient hospitalization benefit which specifies the room rent category and the permissible limit of money payable for the hospital room taken during hospitalization. Different health insurance plans offer different room rent benefits.Traditionally, the room rent benefit is usually 1% -2% of the sum insured on per day basis, which may or may not suffice the expensive rooms in a private hospital considering the medical inflation. Over and above the room rent permissible benefit under a health insurance policy is to be borne by the policyholder. But, with new plans coming up, there is a variation in the room rent options, some plans offer no room rent limit capping where as some plans offer flexibility to the policyholder to choose their own room type at the inception of the policy. Usually, for the higher sum insured there is no restriction on room rent limits, whereas there are some plans wherein irrespective of the sum insured, the policyholder is entitled for a single private hospital room.Thus, it is important to consider the room rent limits, benefits under the policy.

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No Claim Bonus (NCB)

No Claim Bonus(NCB), as the name suggests that some bonus is given to the policyholder in case of no claim during the policy year.No claim bonus is a reward given to the policyholder for staying healthy.It is given in the form of either reduction in premium or increment in the sum insured.It is expressed in percentage. It is important to check what percentage of the sum insured, the health insurance plan is offering annually and what is the percentage of sum insured it offers maximum as a no claim bonus. Every year sum insured increases by the specified NCB in case of no claim during the policy year up to the maximum percentage specified.

For Example: A health insurance plan offers NCB as 10% per annum up to the maximum of 50% of the sum insured.

So, if the sum insured is Rs 5 Lakhs, in the event of no claim, the policyholder’s NCB will be 10% of 5 Lakhs which is Rs 50,000 which makes the sum insured as 5.5 Lakh (5 Lakh base sum insured + 50,000 NCB), the maximum NCB in this scenario will be 2.5 Lakh i.e 50% of the sum insured which further implies that the sum insured could reach maximum up to 7.5 Lakh (5 Lakh base sum insured + 2.5 Lakh maximum 50% NCB benefit).

It is important to note that under some health insurance plans, NCB reduces with the same proportion in the case of a claim, whereas under some health insurance plans, accumulated NCB remains unaffected in the case of the claim in the subsequent years.

Co-Payment Clause 

Co-payment is the co-share, which the policyholder has to pay on the total claim amount at the time of hospitalization.

So, if the co-pay clause says 10% is to be borne by the policyholder, so for Rs 1000 as a claim amount, your insurer will pay Rs 900, and you have to pay Rs 100 as co-payment.

The health plans with higher co-payment will have lower premiums as the risk, and money is shared between the insured and the insurer as compared to plans with zero co-payment clause.There are two types of co-payment voluntary co-payment and mandatory co-payment. Voluntary co-payment is opted by the policyholder himself where as mandatory co-payment is already there in the health insurance plan and once cannot skip it.Usually mandatory co-payment is applicable for higher ages buying a health insurance plan or some insurers impose mandatory co-payment for getting a treatment in non network hospital.

When you are taking a health insurance policy at a younger age, not having any pre existing diseases, opting for a voluntary co-payment might make sense as the probability of taking a disease related claims from your health insurance policy is rare.It could reduce your health insurance premium. But opting for a voluntary payment in case of later ages is not advisable.

However, the crux is that it is important not to ignore this clause and you must be aware about it when you plan to buy a health insurance plan.

Waiting Period 

Health insurance plans waiting period implies the time period where the benefits under the policy cannot be claimed.The waiting periods are not applicable for the accidental hospitalization cases since inception. Now there are different types of the waiting period under a health insurance policy which are:

• Initial Waiting Period: There is a waiting period, which is applicable once you receive your health insurance policy which is usually for 30 days since inception. Any claim against your health plan will not be admissible except for the hospitalization expenses due to an unforeseen accident. Such waiting period refrains the person from taking undue advantage from their health insurance as people might take the health insurance immediately after being diagnosed with any illness or disease.

• Pre existing Disease Waiting Period: There is a waiting period, which ranges from 2 years to 4 years to cover the pre existing diseases under the policy.

• Specific Waiting Period: There are specific treatments or surgeries like Cataract, Hernia, osteoporosis,Non infective Arthiritis, etc.which are covered post completion of the specific waiting period of two years of continuous policy coverage or as specified in the policy contract.The list of such specific treatments may vary from insurer to insurer or plan to plan.

• Maternity related waiting period: The waiting period to get child birth related expenses covered ranges from 9months to 48 months.
  
  It is important to check the waiting period and opt the health plans offering minimal waiting periods.

Restoration Benefit 

Restoration benefit is like a recharge when your sum insured is exhausted.In case the entire cover is exhausted, it gets replenished automatically for the next hospitalization that occurs within the policy year.Exhaustion of sum insured may be partial or complete it depends on plan to plan. Most of the health plans offer restoration in case of complete exhaustion of sum insured.However,the restored sum insured cannot be carried forward to the next policy year if it is not consumed in the same policy year of restoration. Also,the restoration/reinstatement benefit is available for future claims that are not related to any illness or injury for which a claim has already been paid admitted during the same policy year.Restoration is not available for the first claim.This benefit is all the more important in case of a family health insurance plans.

Sub Limits  

Even if you have sum insured as the maximum benefit available, there are restrictions on the maximum limit of benefit on certain treatments and procedures known as sub limits. Like some health insurance plans offer specific capping for procedures where there is an upper limit defined. Beyond that the insurer will not pay.However, if this is ignored then one might get a surprise at the claim when the claim amount is restricted maximum to the sub limit specified in the policy conditions.

No. of Network Hospitals

It is one of the most important aspects to have a look at. Medical exigency can arrive any time that is why it is important to know and check the list of network hospitals near your area. Cashless hospitalization is possible only in network hospitals. Thus, it is essential to ensure that your preferred hospitals fall under the insurer’s list of network hospitals.

Other Benefits

  

Other benefits like pre and post hospitalization benefit, maternity benefit, organ donor benefit, domiciliary hospitalization benefit, ambulance service, free health check ups are some of the other benefits to be looked upon.

Source: compare policy

Apollo Munich Health Wallet Insurance plan – Should you opt?

Apollo Munich Health wallet is an extended version of Apollo Munich Optima Restore. The Insurer calls it Reserve Benefit.

The reserve benefit is fixed and depends on the Sum assured you have opted for. It comes in Multiples of Rs 5000 and ranges to Rs 25000. This reserve benefit will be charged to your premium and will be deposited in a health wallet where you will get Interest @6% p.a.

Why am I saying “charged to you”, if it is a benefit is a reason I call it an extended version of Optima Restore. The features of Apollo Munich health wallet is more or less similar with to that of Apollo Munich Optima Restore with a few exotic changes, but the extra premium they charge in health wallet is the one that goes into reserve benefit.

Below is the calculation of premium for both of the products for an Individual with 40 years of age



What is the benefit of this reserve?

This is mainly to take care of your Out of Pocket expenses which no health insurance policy generally covers. Like OPD expenses, diagnostic tests, non-allopathic treatments, Purchase of medicines, vaccinations, dental expenses, spectacles, contact lenses, a medical device like blood pressure, sugar monitors etc.

The accrued reserve benefit may also be used to pay 50% of the renewal premium post 5 continuous renewals.

The amount that is carried forward also earns 6% bonus at the time of renewal

The below table shows the basic working of the reserve benefit.



In case of cancellation or health wallet policy is not renewed, the reserve benefit at the end of the year would be available for next 12 months from the date of cancellation or expiry.

Who is eligible to take Apollo Munich Health Wallet Health Insurance Plan?

1) Minimum age of entry is 91 days.

2) Maximum age of entry is 65 years.

3) Children < 5 years can be insured only if parents are insured.

4) There is no maximum cover ceasing age on renewals.

5) Policy would be issued only for 1 year and can be renewed year on year.

6) This health insurance plan is available for individual or for family. The family indicated here includes spouse, dependent children and dependent parents and dependent in laws. However, in family floater the maximum number is restricted to 6 members.

7) Option available to convert health insurance plan to family floater policy.

8) In a family floater the age of the eldest member will be considered while computing premium for the family.

What are the major benefits available in Apollo Munich Health Wallet Health Insurance Plan? 

Here are the major benefits available in this health insurance plan.

1) Reserve Benefit: This is the unique feature of this health insurance plan. This plan provides a separate sum insured which can be used for OPD expenses, any non-payable items under health insurance claim or to pay up to 50% of your renewal premium. Such Reserve Benefit would increase every year and any unutilized balance will be carried forward to next year with 6% bonus.

2) Restore Benefit: If your sum insured is exhausted due to earlier hospitalization, this health insurance plan offers automatic restoration benefit where sum insured would be restored. However, this benefit is available only once in a policy year.

3) Health Check-up: This is being offered by some of the health insurance plans now. This plan too offers reimbursement of expenses incurred on preventive health check-up.

4) Optional Coverage for Critical Advantage Rider: This plan provides optional benefit of coverage of 8 major illnesses which includes Cancer, Coronary Artery by-pass surgery, Heart Valve replacement / repair, Neurosurgery, Live Donor Organ Transplant, Bone Marrow Transplant, Pulmonary artery graft surgery and Aorta Graft Surgery. The unique part is that the rider not only offers best healthcare services world over but also covers all travel costs for the insured and accompanying relative, accommodation expenses, second opinion & post hospitalization expenses. This rider will be offered where base policy Sum Insured is Rs.10 lakhs & above. This rider can be issued to an individual and/or family only on individual Sum Insured basis.

5) Multiplier Benefit: You get a bonus of 50% of the basic sum insured for every claim free year accumulating up to 100%. (In the event of a claim, the bonus shall be reduced by 50% of the Basic Sum Insured at the time of renewal).

6) Continuation of Cover: Option to pay up to 50% of renewal premium from Reserve Benefit. Benefit is available after 5 continuous renewals.

7) In-Patient Hospitalization: Policy covers medical expenses for in patient hospitalization of over 24 hours.

8) Pre-Hospitalization: Policy covers medical expenses for pre- hospitalization expense of 60 days before insured is hospitalized.

9) Post-Hospitalization: Policy covers medical expenses for post hospitalization expenses of 90 days from the date of discharge from the hospital.

10) Day-Care Procedures: Covers all day care procedures where hospitalization is not required

11) Domiciliary Treatment: Covers all day domiciliary treatment done at home without any hospitalization.

12) Organ Donor: Treatment expenses for the organ donor at the time of organ transplant.

13) Emergency Ambulance: Ambulance service expenses to bring patient to hospital for hospitalization up to Rs 2,000.

14) Recovery Benefit: Lump sum benefit of Rs 10,000, if hospitalized for more than 10 days.

15) Waiver of Deductible benefit : The option to convert the plan to a full-fledged Indemnity Health Insurance plan with no underwriting or medicals is available only at renewal between 55:60 years provided you have enrolled with them under this policy before the age of 50 years and have renewed with us continuously without a break.

16) Sum Insured Enhancement: Sum Insured can be enhanced only at the time of renewal subject to no claim have been lodged / paid under the policy.

17) Tax Benefits: With the Health Wallet Insurance Plan you can avail tax benefits u/s 80D of the Income Tax Act.

18) Renewability: Health Wallet policy offers lifelong renewability i.e. there is no maximum cover ceasing age in this policy. However if you are not satisfied with this policy, there is Grace Period of 30 days is provided for renewing the policy.

What is Waiting Period in Apollo Munich Health Wallet Health Insurance Plan?

There is waiting period in this policy indicated here

1) Hospitalization treatments covered only after 30 days except for accident injury.

2) All pre-existing diseases will be covered after a waiting period of 3 years from the policy date.

3) In case of specific diseases like cataract, hernia, joint replacement surgeries, surgery of hydrocele etc. 2 years waiting period is applicable.

What are the major exclusions in Apollo Munich Health Wallet Health Insurance Plan? 

Here are the major exclusions.

1) Expenses arising from HIV or AIDS and related diseases.

2) Congenital diseases, mental disorder or insanity, cosmetic surgery and weight control treatments.

3) Abuse of intoxicant or hallucinogenic substances like intoxicating drugs and alcohol.

4) Hospitalization due to war or an act of war or due to a nuclear, chemical or biological weapon and radiation of any kind Pregnancy, dental treatment, external aids and appliances.

5) Items of personal comfort and convenience

6) Experimental, investigative and unproven treatment devices and pharmacological regimens. You can refer policy document for complete list of exclusions.

Should you opt for Apollo Munich Health Wallet Health Insurance Plan?

This health insurance plan comes with several unique features. However, one should really assess whether they need such benefits or not. As in this case, be ready to face hassles of claiming the health-related expenses every now and then from your Insurer. Alternatively, you can claim for either major expenses or let the money accumulate and set off your annual premium payments with the reserve amount.

If not, you can take plain vanilla health insurance plans by adding the base policy, plus Super top up

If you feel such features would fit to your life style, you should definitely consider such plans. You have to decide what suits you the best.

source:good moneying / my investment ideas

Goal or Liability? SIP or EMI?

Many people with reasonably well off parents and double incomes (however shaky one’s job is) think of themselves as rich. Well if not rich, upper middle class, but make rich choices. At times this can be funny, if it were not so serious. This actually comes from not understanding future uncertainties, return on investments, inflation, etc. – can we fix it?

Well here is an attempt.

Financial Planners use a word ‘net worth’ – this is the term that is used to express the gap between our Assets and Liabilities. It is always assumed that your net worth will be positive. If it is negative, of course it means you are bankrupt. Let us put a twist to this.

Let us look at the Balance sheet of a 35 year old man, earning Rs. 25 L a year and married to a woman aged 30 years, and earning 15 L a year. Both are well qualified and staying in a house for which they are paying an EMI. They have 2 children – one is a 7 month old toddler and the elder child is 4 years of age and about to join an International school. Their take home salary is Rs. 1.2L for Rahul and Rs. 85,000 for Aarti. Their EMI is Rs. 55,000 and takes away a chunk of their salary!

Now is the schooling / education dilemma. Rahul feels that the children should go to an International school near their house and this is likely to cost  “only” Rs 1.25L per annum. Aarti feels that Rs. 30,000 per month (eventually when the second child also goes to school) is not an affordable expense, but Rahul who just bought a second hand (6 month old) Audi A3, the school was a non negotiable.

When Aarti met me she felt that they were living beyond their means and it was not necessary. She gently reminded Rahul that the house was partly funded by his parents (or the EMI would have been higher!!). They do not pay any child care expenses because both the grandparents stay nearby and share the ‘looking after’ responsibility.

I suggested something dramatic. I said create a balance sheet. Create a Goal Sheet. Once you arrive at the Goals, put all that in the balance sheet as liabilities to be provided over the working life.

I said Mortgage is something that you owe Hdfc Ltd., Life insurance premium is something that you owe to your dependents. Goals (if you are serious about the goals and the direction of the goals) you need to treat it like a serious liability. To pretend that your current cash flows are good and using excel to extrapolate numbers is tempting and stupid. What if you are unemployed for say 5 months? What if your parent who is now not financially dependent becomes financially dependent on you after 10 years?

She was herself stunned when she saw the figures. Her Retirement fund required came to Rs. 26 crores. Her children’s education requirement came to Rs. 9 crores! He also needed to fund their vacations, cars, lifestyle etc. Aarti put all those requirements at a Rs. 10 crores.

I had to butt in and say ‘tjese are all the known things we still do not know about unknown things like parent’s illness’.

I asked Aarti to include children’s marriage, buying a second house, etc. I can assure you that I am not the most popular guy in the Rahul household!! However Rahul being a CA had very little mathematical argument against this approach.

Now the balance sheet looked like this

Liabilities: Goals Rs. 45 crores, Home Loan Rs. 40L , Car loan Rs. 13L. Assets side was just one house worth about Rs. 1.3 crores, and some ELSS worth about Rs. 5Lakhs.

I then worked out the EMI (if goals are liabilities, SIP is EMI, right?).

Now go to free fin cal and do your OWN exercise. Enough of Voyeurism. In your life it does not matter what Rahul and Aarti do.

What matters is what are your goals, and if you convert those goals to liabilities, are you solvent?

Do you have it in you to spend money on that extra car, extra vacation, etc.

 THINK BEFORE YOU ACT

source : subramoney

Where can you invest your Emergency fund?

But you said that emergency fund is not meant for investments. It is that liquid money which should be easily accessible and to be used only in case of emergency, asked Sunil one of my friend whom I had advised to save for emergency funding first before starting off with long term investments.

Yes this is true that Emergency fund is meant only for emergencies and it is one of the risk management tools which should always be among the first steps in financial planning. But with the advent of new products and also improvisation of some old ones and technological advancements, there’s no harm in parking your emergency fund or part of it in the products which serves the requirement of liquidity and helps earns some income also.

Below are few investment options which can be used to park emergency fund to get better returns than Bank savings account without compromising on liquidity part.

Emergency fund Investment options


1. Sweep in bank Fixed deposits:

Keeping emergency fund only in savings account may provide you with enough liquidity but here you will have to compromise with the returns. Generally it is advised to keep minimum of 3-6 months of household expenses as emergency fund, which may be increased depending on the economic, personal and Job scenario.

Now in many families this amount range above Rs 1 lakh and in some it goes as high as 5-6 lakh. With Savings bank rate @4% and fixed deposits @8%, money in savings account gives around 50% less returns than bank fixed deposits

To fill up this gap, you should ask your bank if they offer sweep in fixed deposits. Sweep in deposits are fixed deposits which are linked to savings bank. In this investment option any amount over and above a specific limit (depending on bank) goes into a fixed deposit. And when you withdraw out of it, last FD made got broken first so you don’t lose more on interest side.

This investment option will let you keep money in savings bank a/c without losing on FD interest rates. It is a saving bank account only with linked fixed deposits.

2. Bank Fixed deposits with Overdraft account:

Sweep in deposits are though I believe offered by many banks but not all banks. So if yours is the one which does not offer this facility, then don’t lose heart as there’s another Investment options too.

You may use Loan against fixed deposit through overdraft account.

In this facility bank will open one overdraft account for 75-80% of the fixed deposit amount. You will be charged with 1.5-2% higher than fixed deposit rate, but only if you use this amount and for the tenure you use it. This option has 2 benefits – one it maintains the liquidity which is required for emergency needs and other is that you need not to break the FD in case of your short term needs.

As fixed deposit rates comes in slabs, so if you invest in 1 year FD and breaks the FD before completion of tenure then you will be paid with the rate of actual invested tenure. Say for example you make FD of 100000 for 1 year @8%, and FD rate for 6 months is 6%. Now if you break your FD of 1 year in 6 months, then you will be paid 6% and not 8% and that too for half year i.e. the actual invested tenure.

Now using this overdraft option, you can stay put in the FD till the completion of tenure and use the overdraft funds for your short term need

Do note that this facility is beneficial only if you replenish the overdraft account as soon as possible from your next salary or any other source. But if you see that replenishment is not possible then rather than using Overdraft account, just break the fixed deposit. Also to make the best use of this facility you should be net savey so you can transfer money from OD a/c and back. Offline process may be too cumbersome.

I personally use overdraft facility to maintain business emergency funding. It’s been 2 years and I’ve faced emergency only once for which I had ample liquidity through OD a/c which i replenished in next 2 months.

So why to keep money in saving or current account?

3. Liquid Mutual funds

Liquid mutual funds are also one of the good investment options to park emergency fund. But operationally it may prove to be a bit of troublesome, as it requires 24 working hours’ time to redeem the funds lying in investment account. This may sometimes be a very long time especially when we talk of emergencies.

To answer this trouble, Reliance Mutual fund has come up with an innovation of “Any time Money card” which is a debit card issued along with ( If applied for) Reliance Mutual fund investments. With this card investor can withdraw up to 50% of the balance or Rs 50000 whichever is less, lying in the investment scheme. Investor may also swipe the card at any point of sales terminal for shopping or fuel purchase or any payment which is to be made through debit card with maximum limit of Rs 1 lakh or 50% of investment amount whichever is less.

So investing in liquid funds with any time card in hand can be one of the good options to park emergency fund. But do keep in mind that this will give you partial liquidity and you may need to wait for some more time to get the 100% withdrawal amount.

I use this facility at personal level too. For family expenses as per the budget,i transfer a specific amount every month into my Reliance liquid fund account and operate through debit card as and when required. I also use this to park the part of personal emergency fund.

Conclusion:

Emergency fund is meant for emergencies and should be readily available with you. You cannot compromise on liquidity and thus it may not be wise to invest the emergency funding in any long term instrument just to get more returns.

But still if there can be some arrangements or products which can be used which helps in maintaining the liquidity along with has potential to generate better returns, then one should definitely try those.


From the investment options suggested above in if one use “sweep in” Fds then the whole of emergency fund can be parked there, but if one wants to go with any of the other 2 options the one should not invest the complete emergency fund but a part of it …say 60% of total.

source : goodmoneying

How to get physical shares transferred and converted into demat

Some people are holding shares not transferred in their name and don’t know how to go about the transfer. Here is the procedure 

Corrected: As per Companies(Share Capital & Debentures) Rules, 2014, form 7B has been replaced with form SH-4

UPDATE: Updated to include additional information provided by NSDL's Rajesh Doshi on demat and bank names that provide franking facility

Several people are still left with shares in physical format. If these are transferred in their name, they can continue to hold them and get them dematerialised anytime they want to. What about those who are holding shares not yet transferred in their names? One cannot sell these shares in physical forms through stock exchanges, unless it is dematerialized. Several readers of Moneylife, said they wanted to transfer physical shares jointly held. But they don’t know the way out.

Asking National Securities Depository Ltd (NSDL) is of no help. You will get a standard reply like this: "Shareholders can dematerialise physical shares in their own name. As such, transfers of physical shares are outside the purview of depository system. There is also no trading in physical shares on the stock exchanges and hence they can only be transferred in private deals. The recommended course of action for investors holding physical shares is to dematerialise them. Transfer of demat shares is also exempt from stamp duty."

Here is the procedure to transfer shares in physical form...

1. Send the share certificates along with the Share Transfer Deed (Form SH-4 available with stock exchange and brokers) duly filled in, executed and affixed with appropriate share transfer stamps (available with authorised stamp vendors) at 0.25% of the market value (of the scrip) on the date of execution of the transfer deed. Self certified copy of the PAN Card of the transferee(s) needs to be submitted along with the instrument(s) of transfer and Stamp duty has to be affixed.

Since 1 July 2002, Maharashtra government has banned sale and use of share transfer stamps and mandated franking for such deeds. This facility was available at Bank of India branch in BSE building. However, since December 2014, this facility has been closed. Franking now happens at Town Hall General Stamp office only or other central offices of collectorate of stamp fees within Maharashtra State, through online registration or without online registration. The process can be found at https://gras.mahakosh.gov.in.


a. For paying the stamp duty without registration, you can use your online bank account. Here are the steps involved in the process...

I. Select Pay without registration
II. Select Department as Inspector General of registration
III. In payment type, select Non Judicial Stamps
IV. Select the appropriate location in District
V. In office name, select General Stamp Office Mumbai
VI. In Scheme Name, select 'Purchase of franking code SOS Mumbai only'
VII. Select year as 2014 - 2015
VIII. In Article Code, select One time Adhoc
IX. Fill in the Amount
X. Give Payee details
XI. Select e-payment/Bank
XII. Fill in image text
XIII. Click on Submit
XIV. Print GRN MTR6 Challan

Take this printout with your share transfer form to the office to get your stamp fee franked on your transfer form.

i. If you do not have an online account, then

I. Print the GRN MTR6 Challan
II. Fill in your details and make the payment at your concerned bank's branch where they accept payment for general stamp office with pay in slip etc.
III. Take the Form and the paid amount along with your transfer for franking.

In both cases, you will have to carry a letter addressed to the Additional Collector (Stamps) in following format...

From:
_________
_________
_________

To
The Additional Collector Stamps
General Stamp Office Fort
Mumbai 23

Sub:- To Affix Special Adhesive Stamps on Share transfer form

Respected Sir,

With reference to the above mentioned subject, I have to state that I have paid stamp duty of Rs.________________ as per MTR Challan No 6 (GRN No. __________________________)

I hereby request you kind selves to kindly affix the requisite stamp duty on the same.




Yours Faithfully

(Note: For Shares, stamp duty @ 0.25% of the market value or the consideration amount (whichever is higher) should be affixed on the instrument of transfer.)

One can submit the letter, form and receipt to the General Stamp Office between a specific time period. The franked documents can be collected between a specific period the next day.

Rajesh R Doshi, Senior Executive Director of NSDL said, "My understanding is that any bank, which offers franking facility for legal documents can also provide the same for transfer deeds.  We use services of Kapol Cooperative Bank branches at Kalbadevi and Fort for franking of legal documents. We have inquired with them and they have confirmed that they would provide services of franking transfer deeds for physical share transfer. Investors can approach them. There are other banks such as Punjab and Maharashtra Co-operative (PMC) Bank and Citizen Co-operative Bank who also provide facility for franking legal document however we have not used their facility. Investors may inquire with them as well."

Here is the checklist for getting your deed franked

Covering letter to the Additional Collector Stamps. Two copies, one to submit and second for receipt of the office and collection next day.
MTR 6 Challan with the GRN No if you have done e payment
Share transfer form
Every share transfer form that has to be franked requires the above process.

After getting the deed franked, the investor can send the share certificates (physical shares) and the share transfer deed (in form SH-4) duly filled in and signed to the company or registrar.  It takes about 10 to 21 days to process the transfer.

The statutory time limit fixed for completing a transfer is one month under the Listing Agreement and two months under the Companies Act, 1956.


How to convert shares into demat form?
Dematerialisation (demat in short form) signifies conversion of a share certificate from its present physical form to electronic form for the same number of holding. Demat is optional and an investor can still hold shares in physical form. However, she has to demat the shares if she wishes to sell the same through the stock exchanges. Similarly, if an investor purchases shares, she will get delivery of the shares in demat form.

There are two depositories, NSDL and Central Depository Services Ltd (CDSL), which hold securities of an investor in electronic form, through depository participants (DPs). DPs provide the link between an investor and company through the Depository.

Mr Doshi from NSDL said, physical shares can be dematerialized in the demat account in the name(s) of share holders holding physical shares. In case, shares are held jointly in physical form by investors, then the same can be dematerialized by opening a demat account in joint names.

"However," he said, "as I understand,  investors prefer to make use of existing demat account held in single name by first transferring physical shares held in joint name into single name. Transferring physical shares requires payment of transfer fees through franking of transfer deed documents, a service investors used to avail from BOI Shareholding. Since BOI Shareholding has now stopped this service, investors can use franking facility provided by some banks."

Here is how you can convert your physical shares into demat...

• Open a Beneficiary Account with a DP registered with SEBI and with any one of the depositories, NSDL or CDSL.
• Submit the dematerialization request form (DRF) (in triplicate) to your DP duly filled in and signed by all the shareholders, along with share certificate(s) and necessary documents. Ensure that the names and order of names as per certificate(s) matches with the names and order of the names as per the DP account.
• Obtain an acknowledgement from the DP.
• On receipt of DRF, the DP will generate a dematerialization request number (DRN), which is electronically transmitted to the Company or STA through the concerned Depository.
• Simultaneously, the DP will send the physical certificate(s) with the original DRF to the Company or STA for verification and confirmation.
• The Company or STA, on receipt of DRF and share certificate(s) will process the request. If the DRF is found to be in order, i.e. verified signature and certificate(s), then it will electronically confirm the request.
• The DP on receipt of such confirmation, will credit the account with the shares dematerialized.
• The DP will hold the shares in the dematerialised form thereafter on the shareholders behalf and she will become beneficial owner of these dematerialised shares.

Important points to note
1) Validity of the executed instrument of transfer:
for shares: - 60 days from the date of execution.
for debentures: - for an indefinite period
2) SEBI has notified vide its Circular No. MRD/DoP/Cir-05/2009 dated 20 May 2009 that it is mandatory for all transactions in the securities market including transfer of shares in physical form of listed Companies to be accompanied with copies of PAN card/s of all the transferees. Therefore attach self-certified copies of PAN card/s of all the transferees along with the instrument of transfer
3) Keep photocopies of certificates, instrument(s) of transfer and other documents sent by post. In case of a loss in transit, they come handy.
4) Always include your complete address along with pin code while filling in the instrument of transfer/opening an account with a depository participant.
5) Do not send share certificates / DRF documents to the Company / Registrars directly.


source : moneylife

Why its important to invest money for future

Today’s article is going to be very very basic. It’s one of the lessons which we should teach our kids when are growing up. The question is “Why Invest money at all?”

A lot of investors are not very serious when it comes to save enough money and invest it properly so that it grows well. A lot of investors are quite consumed in their life and don’t deal with this conversation fully. Only after years of working they realise that they have done a very bad job when it comes to investing their money.

Why you should invest money at all ?

There is a simple conversation which I think everyone should go through once. I call it as X+Y theory. Its very simple.

X is the number of years when they will go to work and bring back money to pay their bills and acquire all they want to enjoy (movies, clothes, eating out, travel, food, fees). This is mostly ACTIVE income and money will come only when you work.

Y is the number of years, which we will spend without earning. We will still need food, clothes, travel, eating out and various other things, but the problem is we will not be working in those years, either by choice or mostly because we are unable to. Now where will the money come in that phase? The money has to come from somewhere?Right?

So you mainly invest so that you create enough wealth which can last your Y years. I know I am making retirement planning very jazzy at this moment, But NO, this is just going one level deeper and answering the basic question of “Why should I invest at all?”

Note that when we are in X yrs phase, we are not too much concerned about the Y yrs, because the X yrs phase itself has many issues. Kids , House, job, health, parents, relationships and many issues which keeps us occupied enough and only when we approach the Y phase, we are bit scared and tensed, but then it gets too late.

3 basic level reasons you should invest your money?

Below I will talk of primary level issues why one should invest their money to grow in future. And when I say grow your money, I am not talking about saving it in bank account, I mean talking about really letting it grow beyond inflation.

1. Because of Inflation 

The most basic reason to invest your money is to protect it from Inflation. Your money will decrease after many years in its purchasing power. A Rs 100 note will not be able to buy the same thing in future, what it can buy today. So you need to invest money properly so that you are able to at least buy the same quantity tomorrow or preferably a larger quantity.

2. Financial Independence

This is exactly what I was talking above. I am sure everyone want to work, but not becoming money slave’s. If you do not invest your money, you will never be able to create a corpus of money you can rely on, and will never be able to get free from your work. If you want to make sure your reason to go to job should be “because I love my job” and not “I need to pay my bills, I am helpless”, then start building that corpus as soon as possible.

And I am not talking about cutting down your desires and entertainment. Do all that, but also start creating that corpus. Keep a balance.

3. Reach your life goals

If you earn Rs 100 per month, and you need Rs 50 for some purpose suddenly you can surely handle is somehow. But what if you need Rs 5000, but you earn only Rs 100? In that case, you need to make sure you have accumulated that amount before hand, slowly and steadily.

We all know some of our financial responsibilities will be coming up in distant future and they would need a big amount. Things like house down payment, children college education, marriage and many other things like that. If you do not invest, how will you fund those goals? It’s as simple as that.

You are sum of your experiences in life

A lot of youngsters have seen their parents struggle for money and their mindset is already set in a way that they understand the importance of saving properly and growing their money. However a big number of people have had a bad relationship with money. They live pay check to pay check, splurge beyond the limit and are careless enough when it comes to money.

A lot of people might say that they are just stupid to act like that and are highly careless and irresponsible. But I think its just a matter of lack of financial literacy or their way of looking at life is different. Everyone is raised differently in their lives and we all have difference experiences. We become what we experience at some level. If you save enough or do not save enough, at the end its just has an outcome which you need to be aware about. That’s all.

How to teach this lesson to your kids (and some adults)?

The simplest way to teach this lesson to small children is to tell them the Ant and Grasshopper story. It’s one of the most simple and powerful stories.

MORAL : It is best to prepare for the days of necessity.

Invest early and with discipline

To get the maximum benefit, make sure you start your investments as early as possible. Even if it’s small in the start, that’s ok. At least you will prepare yourself to invest bigger amount in future if you at least invest small amounts in the start. You will build some wealth (even though its small) and build your mindset to invest regularly.

SOURCE : jagoinvestor

DHFL Fixed deposits – Wealth 2 Health

source :goodmoneying

When we talk of investments in corporate fixed deposits, very few highly rated names comes to mind. Dewan Housing finance limited (DHFL) is one of those. Having been rated as AAA by CARE and Brick works, along with A1+ by crisil, DHFL fixed deposits are one of the popular corporate fixed deposits products in the retail segment.

Recently DHFL has come up with a fixed deposit Overdraft product with name Wealth 2 health, specifically meant to meet the medical emergencies without breaking the fixed deposit. It has gained good media attention.

DHFL Fixed deposits – Wealth 2 Health

Structurally it is a normal corporate fixed deposit product. A health card would be issued within 3 months of FD Creation through Vidal Health (Holding company of erstwhile TTK healthcare TPA). Limit of 75% of FD amount gets tagged to the health card. Card would be in the name of First holder of the fixed deposit.

Now whenever you visit any of the empaneled hospital or diagnostic center and don’t have liquid cash available with you or blocked in fixed deposits like of DHFL, then you need not to pay any cash over there for treatment or tests conducted. You just have to show this health card at the billing counter and they will punch in your details on Vidal website, which gets authorized through OTP received on first holder mobile phone only.

Each time a customer authorizes a payment to designated hospital/diagnostic center, a loan against FD equivalent to the amount authorized is created. This loan would be at 2% higher rate than FD. This loan can be repaid back fully or partially. Even if you don’t want to repay it, then on maturity you will get your FD maturity proceeds after adjusting the interest and principal of loan availed.

Unlike Bank FD, corporate FDs have very low liquidity, and thus offering Overdraft facility through health card definitely is an attraction in itself. Corporate FDs are considered as of high risk and thus also gives high interest rates than bank FDs.

Please note that this product is not health Insurance product but a Loan against Fixed deposit. Wealth 2 health card is just to provide investor with liquidity so he needs not to break the complete fixed deposit for any medical emergency.

DHFL Fixed deposits Wealth 2 Health – Other features/benefits

-Cash less access to hospitals and Diagnostic centers
-1 lakh of accidental death insurance for first holder
-5-25% of discount on tests and hospitalization
-Access to doctor on Phone for opinion/Second Opinion

DHFL Fixed deposits – Rate card ( June 2015)

DHFL wealth 2 health -Should you invest?

See this is a simple loan against FD product, which you can otherwise also take from any bank with much more convenience. If you are comfortable with investment in corporate fixed deposits, then DHFL does come under must consider category due to its high Credit rating. Issuance of Health card is a just an additional feature with no costs attached, and thus is purely up to you if you want to use it or not.

But where amount is significant and one wants to invest in DHFL fixed deposits due to high interest rate structure, then surely this health card feature provides necessary liquidity for medical exigencies.

From Financial planning angle, I would not like it to be termed as good place to park for Emergency funding, as emergencies doesn’t just arise due to medical issues. There may be Job loss, some house repairs, some emergency purchases etc. for which there has to be liquid emergency funding available with you. Moreover this health card will be valid only at selected hospitals and diagnostic centers which may or may not be your preferred one.

So in nutshell, get into DHFL FD just from investment perspective after understanding the basic risks involved in Corporate Fixed Deposits and not just looking at Wealth 2 Health Feature. Maintain adequate emergency fund to keep up with necessary liquidity.


source :goodmoneying