[hserus]

Originally Posted by inder

Read in newspapers today that FM is thinking of increasing the lock-in of PPF to 20 years. Then what will happen to investors like me who have already invested considering a 15 year horizon.

There is a lot of speculation about the budget - and that is inevitable from every tom dick and harry investment banker / financial reporter before every single budget.

Was this a direct quote from Arun Jaitley if so you can believe it will happen 100%.

Else it is the same as people at tbhp speculating what features will be nice to have in the next generation of Honda City, and then expecting that Honda is going to include all those features.

[tiger_stripes]

Originally Posted by inder

Read in newspapers today that FM is thinking of increasing the lock-in of PPF to 20 years. Then what will happen to investors like me who have already invested considering a 15 year horizon.

Apparently there are two separate proposals. Increase the lock in period for withdrawal of funds from 6 to 8 years. And increase the maturity period to more than 15 years. We will have to wait for the budget to see if any of them are implemented.

[S_U_N]

Here is an interesting piece of information I got from my wife.
Her friend's husband got a mild heart attack a few months ago. Now he is fine. Someone told him that since he got an attack, his housing loan can be waived off - maybe his health insurance company provides that feature - I am not sure.

So, he applied for the waiver and now he got to know that his outstanding loan has been settled with the bank. Also, the money that had already been paid by him (as EMI) has been credited to his account. So, in short he got his full loan waived off.

He booked another house in Mumbai last week.
Does all of this sound too good to be true?

[reverse_gear]

Originally Posted by S_U_N

Here is an interesting piece of information I got from my wife.
Her friend's husband got a mild heart attack a few months ago. Now he is fine. Someone told him that since he got an attack, his housing loan can be waived off - maybe his health insurance company provides that feature - I am not sure.

So, he applied for the waiver and now he got to know that his outstanding loan has been settled with the bank. Also, the money that had already been paid by him (as EMI) has been credited to his account. So, in short he got his full loan waived off.

He booked another house in Mumbai last week.
Does all of this sound too good to be true?

Excellent.

I believe he must have benefited from home loan insurance cover. The premiums are quite high, but if it works as it has in your friend's case, it is a real windfall. Heart attack is one of the items covered.

I am pasting below the contents of an email that I got on this product from a general insurance company when I was proposing to take a home loan some time last year (I hope this is OK with MODs). Several of the General Insurance companies would have similar policies.

"
As per discussion,this mail is with regards to your Home Loan please find the details of Home Loan Liability Cover - HOME SAFE PLUS. The details of the same have been stated as under :

BENEFITS:

A) STATED COVERS -
· 9 Major Critical Illness (On Diagnosis basis)
· Death cover
· Permanent Total Disability
· Loss of Job
· Annuity Cover
· Temporary illness
· Property Structure and content Cover

B) Illustration -
· The cover is on a Fixed Sum Insured. For
eg : If the Sum Insured is Rs 1000,00,00/-, and Loan Outstanding with the bank is Rs. 400,00,00/-, then the Loan Outstanding is paid to the bank directly and the remaining amount of Rs. 600,00,00/- which the client has already paid in the due course is refunded to the client or to the nominee.

C) Key Notes -
· The policy is offered for a period of 5 years.
· The entire premium is funded by
ICICI BANK and can be repayed along with the LOAN EMI.
· In case of foreclosure of the Home Loan a proportionate amount of the Insurance Premium will be refunded back to you.

% Refund Premium
Year of Cancellation
Year 1 - 78%
Year 2 - 57%
Year 3 - 37%
Year 4 -18%

D) Payment Options-
· EMI Option- The premium can be included in the Loan amount and the same can be paid through easy EMI options. .
E) Product Features-

The details of the product have been discussed below :

The covers being offered in the Home Safe Plus are as under,

1) Critical Illness diagnosis Cover
On diagnosis of any of the following illness Heart Attack, Cancer,Kidney Failure, Brain Stroke, Paralysis, Multiple Sclerosis or if theapplicant is required to undergo the following medical procedures,Major Organ Transplant, Bypass Surgery,Heart Valve Replacement Surgery the Insurer will pay Outstanding Amount to ICICI Bank so as to foreclose the loan and the remaining amount to the applicant or to the nominee.The sum insured will remain constant throughout the tenure irrespective of the outstanding with ICICI Bank.

2) Death Cover
If unfortunately the applicant to the Home loan passes away in an Air,Road, Rail, Water or Domestic accident during the tenure of the Insurance the Insurer will pay the outstanding balance to ICICI Bank and the sum already paid by the applicant to the Bank will be refunded to the Nominee.

3) Disability Cover
applicant suffers any disability during the course of his Insurance resulting in his inability to remain gainfully employed the Insurer will pay the outstanding balance to ICICI Bank and the sum already paid by the applicant to the Bank will be refunded back to him.
4) Personal Protect Annuity- In case of Accidental Death or Permanent Total Disability, apart from the above stated benefits, the client or the nominee (as applicable) is entitled for a pension of Rs 25000/month for the next 60 months (5 years) from the date of event.And in case of temporary disability where doctor advises rest for than 7 days, an applicant can claim Rs 3000/- per week upto 50 weeks.
5) Loss of Job- Maximum 3EMI's would be paid.
6) Property Insurance ( Covers the Loan Amount)
Your cherished property will be insured against the following hazards and perils, FIRE, EARTHQUAKE, ELECTRICAL SHORT CIRCUITS, GAS CYLINDER EXPLOSION, LIGHTNING, RIOTS, STRIKE, FLOOD, FLOOD WATER INUNDATION, STORM, MALICIOUS DAMAGE, ROCK SLIDE, CYCLONE, LANDSLIDE, IMPACT DAMAGE,OVERFLOWING OF OVERHEAD WATER TANK, BURSTING OF WATER PIPES, SPRINKLER SYSTEM MALFUNCTION, SUBSIDENCE, AIRCRAFT RELATED DAMAGE, MISSILE TESTING OPERATIONS ETC.

7) Content Insurance ( 40% of the loan amount)
The contents inside your Home i.e Consumer Electronics, Household Appliances, Furniture, Wardrobe, Lightings,China ware, Jewelery,and Precious Stones will be insured AGAINST BURGLARY and FIRE,EARTHQUAKE, ELECTRICAL SHORT CIRCUITS, GAS CYLINDER EXPLOSION,LIGHTNING, RIOTS, STRIKE, FLOOD, FLOOD WATER INUNDATION, STORM,MALICIOUS DAMAGE, ROCK SLIDE, CYCLONE, LANDSLIDE, IMPACT DAMAGE, OVERFLOWING OF OVERHEAD WATER TANK, BURSTING OF WATER PIPES, SPRINKLER SYSTEM MALFUNCTION, SUBSIDENCE, AIRCRAFT RELATED DAMAGE, MISSILE TESTING OPERATIONS ETC .
"

[gearedup]

Originally Posted by reverse_gear

Excellent.
I am pasting below the contents of an email that I got on this product from a general insurance company when I was proposing to take a home loan some time last year (I hope this is OK with MODs). Several of the General Insurance companies would have similar policies.
"

May we know the premium quoted? And this product is only for 5 years, not sure if any Bank will accept any policy term, lesser than the period of the loan.
Any info would be very useful.

[reverse_gear]

Originally Posted by gearedup

May we know the premium quoted? And this product is only for 5 years, not sure if any Bank will accept any policy term, lesser than the period of the loan.
Any info would be very useful.

I was quoted ~3 Lakh as upfront for a loan amount of 48 lakh. But there is also an option of adding to the EMI and paying on monthly basis. But I am really not entirely knowledgable as I did not pursue this much. There are probably better options possible. This is an insurance product linked to the loan, it is not a bank product, so I am not sure I understand the issue of bank accepting it. Sorry if I am not able to guide you too well in this.

[pramodkumar]

Guys,

I know its little late to plan for taxes this year, however I have done 1.35 Lac savings in FD, so far this year planning to do another 15K before 31st March. However, I have some questions while doing savings to build my portfolio as well.

I have 30K(by end for FY 2015-2016) Home loan, which is yet to be taken procession.

I am also planning to invest in Tax saving instruments(Read FD for 5 years), I am not really a fan of long lock-in periods, that is one reason I have opted for the least risk least lock-in period investment. I am also planning to systematically invest in gold(buy coins, every month) and convert it into ornaments every year end.

I have a term cover, an accidental cover and a medical insurance(1+1 Lac) from my employer, does it make sense to take another insurance?

I have gone through the whole thread and have most options suggested are not relevant anymore.

Pramod

[hserus]

You're looking at maxing out 80C but probably are way close to that already with PF, kids' school fees etc just for example.

Sure get medical insurance - additional cover for you, plus your parents if applicable. 1. You get 80D benefit on that and 2. It persists even if you change jobs, so definitely have a backup policy.

Your home loan's EMI interest is still pre construction, you can't claim it now, but whatever is charged till handover, you can claim 20% of the amount every year for 5 years, along with whatever interest you pay in the years after handover.

Gold and ornaments - buy these ONLY sufficient for your traditional needs (daughters' wedding, traditional presents to nephews and nieces on special religious occasions etc). Don't treat it as an "investment", please. Gold value fluctuates rather a lot.

Look at carefully chosen mutual funds or equities - though you had better have a good for fee financial advisor managing it for you, rather than neighbourhood LIC / MF agent uncle or bank "advisor". And that of course depends on your investment horizon, when you want the money etc. Only park spare money into it of course - you can lose money in the short run if the market tanks.

Beyond that I will repeat that you need an advisor - and it'd be pointless to take random advice given on tbhp, investment questions columns in newspapers etc without a detailed analysis of your finances, expenses, major expense deadlines coming up, time to retirement etc etc.

(edit - you can pm me for the advisor I use if you wish)

Originally Posted by pramodkumar

Guys,

I know its little late to plan for taxes this year, however I have done 1.35 Lac savings in FD, so far this year planning to do another 15K before 31st March. However, I have some questions while doing savings to build my portfolio as well.

I have gone through the whole thread and have most options suggested are not relevant anymore.

Pramod

[pramodkumar]

Originally Posted by hserus

Beyond that I will repeat that you need an advisor - and it'd be pointless to take random advice given on tbhp, investment questions columns in newspapers etc without a detailed analysis of your finances, expenses, major expense deadlines coming up, time to retirement etc etc.

(edit - you can pm me for the advisor I use if you wish)

Thanks for your advise, I was looking at some immediate liquidity as I was building a house and some financial discipline(that's why I was thinking of gold)

I would use tbhp and any other forums as reference only and would like to sound little intelligent when I talk to the advisors.

Thanks Again !

Pramod

[hserus]

Any "tax saving" FD at all is a long term one so you don't have immediate liquidity there.

Put it in a series of short term FDs maturing at specific intervals when you need to release cash. Or put it in a well chosen debt mutual fund.

[S_U_N]

Originally Posted by reverse_gear

Excellent.

I believe he must have benefited from home loan insurance cover. The premiums are quite high, but if it works as it has in your friend's case, it is a real windfall. Heart attack is one of the items covered.
"

So, I checked with the person. His home loan and insurance are both from HDFC. He got his outstanding amount waived off and he also got the amount paid credited back to his account.

[reverse_gear]

Originally Posted by S_U_N

So, I checked with the person. His home loan and insurance are both from HDFC. He got his outstanding amount waived off and he also got the amount paid credited back to his account.

I guess home loan would have been from HDFC and insurance from HDFC Ergo (which is their general insurance JV). Quite likely that the insurance was bundled at the time that the loan was issued, so for the person it is like a single window service.

[hserus]

Originally Posted by S_U_N

So, I checked with the person. His home loan and insurance are both from HDFC. He got his outstanding amount waived off and he also got the amount paid credited back to his account.

He will now have to give up any tax benefit he may have claimed based on interest or principal paid on the loan.

[S_U_N]

Originally Posted by reverse_gear

I guess home loan would have been from HDFC and insurance from HDFC Ergo (which is their general insurance JV). Quite likely that the insurance was bundled at the time that the loan was issued, so for the person it is like a single window service.

Yes. That is true in his case. But his wife mentioned that even if the loan was from another bank (say SBI), it would make no difference to the benefits.

Originally Posted by hserus

He will now have to give up any tax benefit he may have claimed based on interest or principal paid on the loan.

Are you sure about this?
How does IT department track such a thing since this is so rare?
He has taken another loan and booked a new house now to get tax benefits.

[hserus]

Originally Posted by S_U_N

Are you sure about this?
How does IT department track such a thing since this is so rare?
He has taken another loan and booked a new house now to get tax benefits.

All transactions with banks / insurance companies etc have your PAN on file. That will do very well for a start, for them to catch you.

It is very easy and in fact automatic to track such "on the books" transactions with organizations that have to implement kyc norms, by law.

Yes there are ways to get around KYC but all of them aren't what you'd describe as legal.