[vasanthjn]

Originally Posted by S_U_N

Earlier there was a discussion on buying gold from NSEL.

Probably buying Gold ETF from a regular demat account is a better option in this case.
At least I don't see how NSEL is cheaper than FundsIndia equity platform.

If you are buying gold only for the sake of investment then Gold ETFs are the best bet, but in a latter date if you plan to purchase gold with this savings then it is strongly recommended that e-Gold is considered. The reason being eGold can be converted into physical gold by paying a very small amount. The minimum conversion size is 5 grams.

Assuming that you buy ETF and at a latter date want to buy gold (coins/biscuits), then for purchase of gold you would pay an additional charge of wastage and making charges. This can be avoided if you buy eGold.

On taxation front, ETFs would be treated similar to stock, but eGold would be treated seperately like any other capital asset and would be taxed accordingly. eGold also would be considered for Wealth Tax.

[carboy]

Originally Posted by vasanthjn

Assuming that you buy ETF and at a latter date want to buy gold (coins/biscuits), then for purchase of gold you would pay an additional charge of wastage and making charges. This can be avoided if you buy eGold.

In what form is eGold redeemed?

[Technocrat]

Originally Posted by abeerbagul

Lets say I have a 6 year old car which has depreciated down to a negligible amount, but still has a lot of mechanical life left in it. At this point I would like to stop taking comprehensive insurance, and just keep third party insurance for legal compliance. Because the risk cover part of comprehensive insurance is no longer needed.

A car is a depreciating asset, you are not. A functional Car's book value can become zero, a functional man's book value(if you can call that) wont.

Also, I am glad that you are able to forecast or estimate the right amount after x number of years considering Inflation & other costs at that point of time. Also the confidence in your investments.

[abeerbagul]

Just as a car's value depreciates (reduces) over time, the financial risk in life keeps reducing, provided we take sensible decisions during the course of our career.

It should be fairly possible to achieve a stable investment corpus within 20 years of starting your career, to the point where you no longer need to work to put food on the table.

So lets say you start career at 25, by the age of 45 your income from investments should be equal to your household requirements, inflation adjusted.

So at the age of 30, if I am taking insurance as a risk cover, I will need it only till 45 or max 50. Afterwards, it is better to just stop the policy and invest the premium. This means a policy term of 15 - 20 years.

Now if someone is still not "well off" at the age of 50, he/she has made some major mistakes repeatedly in financial planning.

This is totally my view of things. Sorry if it comes across too rigidly, do not want to turn it into a debate

[vasanthjn]

Originally Posted by carboy

In what form is eGold redeemed?

eGold can be converted to Physical Gold. At present the procedure is you surrender the eGold units to your broker through appropriate forms and this procedure takes around 2/3 weeks. At the end of this period you can collect it from the designated agency. At present Brinks Arya India Pvt. Ltd operates in all the Tier 1 cities and NSEL in few selected Tier 2 cities.
Note: I stand corrected from my earlier post that even 1 gm of eGold can be converted to Physical Gold.

[carboy]

Originally Posted by vasanthjn

eGold can be converted to Physical Gold.

My question was along the lines of 'In what form do you get the physical gold'? i.e. if you redeem 5 gms, how do you get the 5 gms?

Originally Posted by abeerbagul

Now if someone is still not "well off" at the age of 50, he/she has made some major mistakes repeatedly in financial planning.

I guess 70-80% of the country's 50+ have made major mistakes in financial planning.

[ghodlur]

Originally Posted by S_U_N

The blood tests would reveal that you are smoker. I think there is a test for nicotine present in blood (not 100% sure though).
Let's say you hide the fact, and if you die and post mortem reveals you were a smoker, then your claim would be outright rejected.
I don't somehow agree with the shorter duration of term cover.
If I am 30 and I die at 60, then I would be glad that I took 35 year term. At least my depends get money at that stage.

Nicotine in the blood breaks down after 72 hrs, you wouldnt find the trace of Nictoine in your blood or urine sample if you smoked today and did the medicals 3 days later. I was told this by a medical rep, yet to find out any hard paper on the same. Googling does give some info but not to the Indian context.
Also most of the Insurance companies keep the smoker's clause for a period of say upto 2 years. In case the Insured dies within this period and there is a claim then the settelement of claim will depend upon what the Insured had declared during the policy purchase.

[Oxy]

Originally Posted by ghodlur

Nicotine in the blood breaks down after 72 hrs, you wouldnt find the trace of Nictoine in your blood or urine sample if you smoked today and did the medicals 3 days later. I was told this by a medical rep, yet to find out any hard paper on the same. Googling does give some info but not to the Indian context.
Also most of the Insurance companies keep the smoker's clause for a period of say upto 2 years. In case the Insured dies within this period and there is a claim then the settelement of claim will depend upon what the Insured had declared during the policy purchase.

That may be true, but say if a person has been regularly smoking for 20 years and decides to quit one fine day. He doesn't smoke for a week and takes the policy saying that he's a non smoker. What happens then?

I am pretty certain that the 20 year period of regular smoking would have caused some kind of nicotine deposits in the lungs, which on the event of death, would come out during the post mortem and may result in the rejection of the claim.

[S_U_N]

Originally Posted by carboy

Assuming you retire @60 & don't die, what would you & your dependents do?

Decide at that stage, if you wish to continue paying premiums or cancel your policy. There would be more clarity at that stage than now.

If you die @60, your dependents would have your insurance money + your savings.

Not bad from financial perspective, eh?

If you don't die @60, your dependents would have only your saving and also the extra burden of your expenses because you are still alive.


If they did need that extra money if you died @60, it would be much worse if you didn't die @60 because the extra expense of 1 person.

This would also be the case if your cover ceased to exist at that point (say if you go for 25 years term instead).
The extra premium's true value after 25 years from now would be negligible.

e.g. Aegon Religare, 32 years, non smoker takes a cover of 50 lacs.
Term 25 years, all addons included: premium Rs. 5600
Term 35 years, all addons included: premium Rs. 6200

Now, how difficult will it be to bear extra Rs. 600 -1000 each year for 25 years and then decide whether to continue or not after 20-25 years from now?

Personally, I have taken two policies for different term period. So, my cover will be 50% less after 30 years, but my family would get money during a period when the odds are against the insurance company.

Originally Posted by vasanthjn

Assuming that you buy ETF and at a latter date want to buy gold (coins/biscuits), then for purchase of gold you would pay an additional charge of wastage and making charges. This can be avoided if you buy eGold.

Somehow the charges that I have come across are quite high compared to regular demat account.

Probably ETF is a better bet for me.

On taxation front, ETFs would be treated similar to stock, but eGold would be treated seperately like any other capital asset and would be taxed accordingly. eGold also would be considered for Wealth Tax.

Thank you for the taxation part. I think ETF is better in that sense, right?

Originally Posted by carboy

My question was along the lines of 'In what form do you get the physical gold'? i.e. if you redeem 5 gms, how do you get the 5 gms?


I guess 70-80% of the country's 50+ have made major mistakes in financial planning.

After the application is filed, you need to specify the location. They probably tell you where to go and collect the physical gold.

Originally Posted by ghodlur

Nicotine in the blood breaks down after 72 hrs, you wouldnt find the trace of Nictoine in your blood or urine sample if you smoked today and did the medicals 3 days later.

Assume that a person smokes and meets with an accident the same day.
The blood tests done at that point in time will clearly tell if you have nicotine or not.
So, since we cannot predict when accidents (or death) can occur, the blood tests would always be like a hanging sword.
Hence blood test result is more important during claim settlement (compared to the one during policy inception.)

[carboy]

Originally Posted by S_U_N

Decide at that stage, if you wish to continue paying premiums or cancel your policy. There would be more clarity at that stage than now.

You probably misunderstood my question - my question wasn't what you would do about the policy. My question was what would you do now that you haven't got the money because of not dying.

Originally Posted by S_U_N

Not bad from financial perspective, eh?

Not really. Much worse from financial perspective in the case where you did not die & didn't get the insurance money. If the money was needed after you died, it most certainly is needed if you are alive & retired.

Originally Posted by S_U_N

This would also be the case if your cover ceased to exist at that point (say if you go for 25 years term instead).

Yes. That's why you need to decide a term based on the following
- How long are you going to be working and contributing to family income
- During this period, if something happens would your savings at that point allow your family to live well or would there be a drastic change in their lifestyle.

Originally Posted by S_U_N

After the application is filed, you need to specify the location. They probably tell you where to go and collect the physical gold.

I am not asking where you would get it. I am asking 'in what form' would you get it?

[vasanthjn]

Originally Posted by carboy

My question was along the lines of 'In what form do you get the physical gold'? i.e. if you redeem 5 gms, how do you get the 5 gms?

Based on the quantity of Gold surrendered for conversion it would be made available in Gold Coins / Biscuits.

[S_U_N]

Originally Posted by carboy

You probably misunderstood my question - my question wasn't what you would do about the policy. My question was what would you do now that you haven't got the money because of not dying.

As I said earlier, re-evaluate and if necessary terminate the policy.

Not really. Much worse from financial perspective in the case where you did not die & didn't get the insurance money. If the money was needed after you died, it most certainly is needed if you are alive & retired.

I disagree here. I consider it as a bonus for the family. It does not mean, that there are no other resources already arranged for by that time. But this is additional (and very useful). Hence bonus.

I am not asking where you would get it. I am asking 'in what form' would you get it?

Gold bar/ coin.
Details here, but probably outdated.
http://www.nationalspotexchange.com/...ar041_2010.pdf

[vasanthjn]

Originally Posted by S_U_N

Somehow the charges that I have come across are quite high compared to regular demat account.

Probably ETF is a better bet for me.

Even if you buy ETF, you need to pay brokerage charges. This varies anywhere between 0.4% to 1%. For eGold I pay a brokerage of 0.4% (i am just a retail investor) and annual demat charges of Rs.200. In my opinion eGold suits people who may want to convert their units to physical Gold at a latter date.

[carboy]

Originally Posted by S_U_N

As I said earlier, re-evaluate and if necessary terminate the policy.

Terminating the policy would not give the money which would have been available had the insured person died.

Originally Posted by S_U_N

I disagree here. I consider it as a bonus for the family. It does not mean, that there are no other resources already arranged for by that time. But this is additional (and very useful). Hence bonus.

If you looking for a bonus, look at investments not insurance.

Originally Posted by S_U_N

Gold bar/ coin.

I asked because the original post(not you) http://www.team-bhp.com/forum/shifti...ml#post2935945 said that you will save making & wastage charges of coins/bars if you go for egold as compared to ETF. If you are getting coins/bars in egold also, then obviously you are paying making/wastage charges here also - either directly or indirectly.

[S_U_N]

Originally Posted by vasanthjn

Even if you buy ETF, you need to pay brokerage charges. This varies anywhere between 0.4% to 1%.

For eGold I pay a brokerage of 0.4% (i am just a retail investor) and annual demat charges of Rs.200. In my opinion eGold suits people who may want to convert their units to physical Gold at a latter date.

FundsIndia charge for ETF is around 0.4%.
However, for eGold, Commodity Guru Trading Services has quoted me much higher and I am looking at other brokers now.

1. Rs. 750 (one time charges).
2. Rs. 350 (AMC from second year only - first year free).

0.5% transaction fee.

Who is the broker in your case?

Originally Posted by carboy

I asked because the original post(not you) http://www.team-bhp.com/forum/shifti...ml#post2935945 said that you will save making & wastage charges of coins/bars if you go for egold as compared to ETF. If you are getting coins/bars in egold also, then obviously you are paying making/wastage charges here also - either directly or indirectly.

Perhaps, vasanthjn can comment on this part. I don't know if there is any wastage/ making charge for bars (coins will have some charge).