Rohit Sharma rsharma@rediffmail.com
I am 46 years old. Am I eligible to buy a term insurance at this age? If so, what kind of plan should I go for to ensure an assured sum of `1 crore and increasing monthly income?
Yes, you are eligible to take a term insurance. Whether a cover of Rs 1 crore is sufficient for you will depend on your current and expected future income, your household expenditure and any mortgages or loans you may have. The thumb rule for life cover is that it should be 12-15 times your annual income. You can use online calculators to check out the optimal life cover you should go for. A term plan is the most basic and essential step for protecting the future of one’s family. In the event of death of the breadwinner, it ensures that the family of the deceased are able to repay loans and run household without compromising on lifestyle. Keeping inflation in view, it is recommended to opt for an increasing monthly income plan to manage household expenses.
Manik Nangia, Director Marketing
& Chief Digital Officer, Max Life Insurance
Gaurav Panwar panwargaurav@gmail.com
What is a convertible term policy? What are some of the benefits of buying a convertible policy and what are the terms and conditions?
Convertible term policies are those that allow for converting a short-term protection to a whole life (permanent insurance) without additional underwriting checks. Convertibility is an option that is generally priced separately in a life insurance product. As the market evolves, we can hope to see more product offerings with convertible policies.
Manik Nangia, Director Marketing
& Chief Digital Officer, Max Life Insurance
Aditya Raje, adityaraje@gmail.com
I am 30 years old and am planning to get married next year. What type of insurance products should I opt for apart from the plain vanilla life insurance?
As you start your married life, the first and most important insurance to opt for would be term insurance and health insurance plans. The next step would be to start planning your life goals such as retirement. It is said that the day you start earning, you should start planning a retirement corpus for self and spouse. Once you decide to begin a family, it is recommended to take a children’s education plan to ensure you have an adequate pool of funds to finance it.
Manik Nangia, Director Marketing
& Chief Digital Officer, Max Life Insurance
Venkat, Chennai
I receive regular messages about base expense ratios. As a layman, how can I use this information?
Under Securities and Exchange Board of India (SEBI) guidelines, asset management companies are bound to inform investors on any changes in fund expense ratios for the sake of transparency. Even though recent changes in expense ratios are minuscule and in favour of investors, it has no considerable impact on investment returns.
B Gopkumar, CEO Reliance Smartmoney.com
Anubhav Jain, New Delhi
I try to do due diligence before making any trade. But I am a little overwhelmed by the charting tools, indicators and jargons when trying to analyse whether or not to make a trade. Is there any indicator or a set of indicators to help make the right decisions, and summarise all market information in a succinct manner?
You are not the only one to feel overwhelmed about indicators, trends and charts surrounding trading and investing. However, looking for a shortcut or one best indicator is the answer to your problem, simply because there is no such indicator. Indicators are used by traders globally to analyse factors and trends that may not be revealed by a simple price chart. The moving average, relative strength index, Fibonacci Retracements, Bollinger Bands, etc. are designed to serve specific purposes and will help to yield profitable results, if used correctly. That said, the first step is to understand these indicators and crack down on what they can be used for, and when to use them. You should look out for indicators that use different formulas, but calculate very similar things - often called “indicator families” by experts. Having three-four such indicators belonging to the same family will however not add to your analysis. In fact, they are likely to make your chart more confusing. Merely knowing which indicators can calculate and analyse is not particularly beneficial for you as a trader. Rather one should learn how to apply these indicators at the right situation. Trading is not something you can master overnight. While indicators can be overwhelming (some traders choose to forgo their use completely), they help in understanding how price and volume data can be effectively manipulated to silence out noise, and predict trends and patterns. To understand the use of indicators is a crucial skill for any trader, and it takes time to master.
Rahul Jain, Head Edelweiss Personal Wealth Advisory
Sahaj, Kanpur
Which ITR form should I file if I have incurred losses of about Rs 14 lakh in futures and options trading? Will this be counted as speculative or non-speculative loss? Will tax audit be required for this?
You should use ITR 3 form. From 2017, ITR 4 has been renamed as ITR3. Preferably, you should seek advice from your chartered accountant or tax consultant before filing returns
B Gopkumar, CEO Reliance Smartmoney.com