The Complete Guide to Financial Planning

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www.bajajcapital.com - 1 -

The

CompleteGuide to

FinancialPlanningVersion: November 2011 / India


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Index

Content PageNo

Financial Planning 6

Introduction 7

360o

Financial Planning 8

What is 360 Financial Planning? 8 Why do you need Bajaj Capital's 360 Financial Planning? 8 How will 360 Financial Planning help you? 9 Who needs 360 Financial Planning? 9 How do I get my personalised 360 Financial Plan created? 9Comprehensive 360 Financial Planning 10

Sample Financial Plan 11

Personal Financial Plan 11 Portfolio Projection 12 Cash-flow Projection 13 Asset Allocation 14 Current Situation 15 Financial Plan Goals 16Financial Frequently Asked Questions (FAQ) 17

360o

Plan 20

1. Investment Planning 21

Importance of Investment Planning 22 Evaluating options 23 Investment Strategies 24 Risk Vs Returns 25 Investment Planning Steps 26 Investment Planning Tips 28 Inflation Devil 29 The Power of Compounding 30 Risk Thermometer 32


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Content PageNo

2. Insurance Planning 35

(Life Insurance) 37

Retirement Planning 38 Insurance Planning 40 Saving Planning 42 Health Insurance / Planning 44 Tax Planning 45 Education Planning 46 You 47(General Insurance For Individual) 48

Health Insurance 49 Motor Insurance 50 Home Insurance 51 Travel Insurance 52

Personal Accident 53(General Insurance For Corporates) 54

Group Mediclaim 55 Group Personal Accident 56 Office Property & Asset Insurance 57 Liability Insurance 62 Directors' And Officers' Liability Insurance 64 Marine Insurance 66 Professional Indemnity 68 See Also 693. Retirement Planning 70 Retire And Prosper 71 Retirement Planning Tips 72 Why Plan For Retirement 734. Tax Planning 74

Tax Planning Tips 75 Tax Saving Schemes 77 Tax Free Income 795. Children's Future Planning 81

6. Cash Flow Planning 82

Personal Budget 83 Cash Flow Planning Basics 84


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Content PageNo

About Investments 85

I. Mutual Funds (Mf) 86

What Are Mutual Funds? 86 Why Choose Mutual Funds? 87 Types of Mutual Funds 88 Snapshot of Mutual Fund Schemes 89 How to Calculate the Growth of Your Mutual Fund

Investments?90

Points To Remember 91 Mutual Fund Acronym 92 Income Tax Pan Number Requirement For Mf Investments 94 Gold Mutual Funds 96 See Also 98II. Bonds 99

Types Of Bonds 99 See Also 103III. Pension Schemes 104

About NPS 105IV. Real Estate 108

Our Services 109 Buying Real Estate 110 Our Presence 110V. Company Fixed Deposits 111

Fixed Deposits Glossary 112 Frequently Asked Questions (FAQ) 113 See Also 115VI. Post Office Schemes (POS) 116

Post Office Monthly Income Scheme (MIS) 117 Post Office Time Deposit Scheme (TD) 118 Post Office Savings Account 119 National Savings Certificate (NSC) 120 Kisan Vikas Patra (KVP) 121 Public Provident Fund (PPF) 122 Senior Citizen's Savings Scheme 124VII. Initial Public Offering (IPO) 125

Frequently Asked Questions (FAQ) (IPO / FPO) 126


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VIII. Portfolio Management Service (PMS) 129

Wealth Management 130

Why La Premier 131 Our Philosophy 132 Our Products Suit 133 Our Exclusive Services 134 Our Advisory Process 135 Our Institutional Advisory Services 136 Our Team 137NRI Services 138

List of NRI Services 140 NRI Help Center 142Research & Publication 143

Financial Tools 144

Knowledge Cafe 145

How To Achieve Lifetime of Investment Success 146 Investment Mantras For The Uninitiated 147 Systematic Approach To Investments: S.T.P or S.I.P 149 Get Yourself a Financial Planer - Even If It Requires You To

Pay Fees150

Make Your Portfolio Uncertainty Proof 151 Choosing Financial Advisor 152About Bajaj Capital Ltd 153

Chairman Message 154 Milestone 155 Our Mission, Aim and Objectives 157 Our Vision 157 Our Networks 157 Who's Who at Bajaj Capital 158 The Significance of Our Logo 160


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Financial PlanningThe only thing permanent in life is change. Times change; People change; so does life. You expect lifeto be much better tomorrow than it is today. Tomorrow, you hope to fulfill all your dreams andaspirations. But what happens if things take an untoward turn? What if life doesnt happen the way you

planned it for? At Bajaj Capital we understand this. We know that an unexpected change in yourfinancial situation can be incredibly stressful. Hence we help you plan your financial life. We make surethat whatever is the situation; financially your life never goes unrestrained. So we bring for you the mostpreferred solution: Financial Planning!


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IntroductionLets Simplify! Financial Planning

Theres just no way around it: absolutely everyone needs financial advice.

Should you invest with risk?Go into more debt?Live more frugally (carefully)?Give to charity?Retire early with enough assets?

These are some questions that we all seek answers to. For many, following a financial plan sounds like achore (task). It creates images of tedious expense tracking, cutting out on all the fun things in your life,and being forced to count every penny.

Fortunately, that doesn't have to be the case. Financial planning is a process of:

Setting objectives, Assessing Assets and Resources, Estimating future financial needs, and Making plans to achieve monetary goals.

Financial Planning can be as simple or complex as you make it, but no matter how you create your planif you follow it, you'll be on your way to Financial Independence.


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360o

Financial Planning

Financial Planning is becoming increasingly popular in developed countries all over the world. Now,with a little help from Bajaj Capital, you too can give yourself the 360 Financial Planning edge!

What is 360 Financial Planning?

360 Financial Planning is a unique software-based simulation that takes a holistic view of your life-long financial needs and charts a personalized investment strategy to help you meet them.

Broadly, it involves: Identifying your current financial status Listing and prioritizing your goals Creating a sound investment plan to achieve them Monitoring the plan to facilitate swift (speedy) corrective action

360 Financial Planning is based on the premise that every individual has certain basic financial needsthat are expressed at various stages of life (getting married, buying assets like homes, vehicles, orproviding for your child's education and wedding and retiring finally ). With the help of 360 FinancialPlanning, you can prepare yourself well in time for all these goals.

Why do you need Bajaj Capital's 360 Financial Planning?

You may have many dreams, needs and desires. For example, you could be dreaming of:

Owning a new car Buying a dream house

Providing your children with the best education Planning a grand wedding for your children Having a great time after your retirement

But in today's world of skyrocketing costs and increasing inflation, how many of these dreams can youhope to turn into reality? By planning well, you can utilize your limited resources to the fullest. 360Financial Planning helps you see the big picture and invest for specific long-term and short-term goalswell in time.


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Financial PlanningHow will 360 Financial Planning help you?

Instead of investing in an ad-hoc manner, 360 Financial Planning helps you take a holistic, all-roundview. Briefly, 360 Financial Planning comprises:

Investment Planning To make your wealth grow

Cash Flow Planning To provide for assets and meet the periodic cash requirementsTax Planning To save on taxes and increase your income

Insurance Planning To protect yourself, your family and your assets

Children's Future Planning To give your children a financially secure future

Retirement Planning Because retirement is a time to relax, not to get worried

Who needs 360 Financial Planning?

Everyone does, because everyone has a right to dream. And realising dreams is easier when you work toa plan that's:

Reliable Realistic Proven

Bajaj Capital's 360 Financial Planning Programme could make a difference to all those who wish tolead a worry-free, financially secure life.

How do I get my personalised 360 Financial Plan created?

Here is how Financial Plans are prepared:

The process begins with identifying your needs with the help of the Need Analysis Form Our Financial Planners then use the especially-created 360 Financial Planning software to

generate a personalized Snapshot. The Snapshot gives you a graphic account of all your financial requirements, at every stage of

your future life. Based on the Snapshot, our experts work out an investment strategy. Once implemented, our experts keep regular track of your investments

A Financial Planning session takes just 15 minutes but gives you benefits of a lifetime.

Identifying your needs and setting your goals.

Creating a 360 degree Financial Snapshot based on your goals.

Deriving upon an investment strategy based on it.

Keeping a regular track of your investments

Review and re-plan your investments from time to time.


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Comprehensive 360 Financial PlanningTotal happiness in one's life comes from four quadrants:

1. Spiritual,2. Mental,3. Physical and4. Financial well-being.

All the four quadrants are interdependent and can't provide complete peace of mind in isolation.Financial Independence completes your wellness wheel with mind, body and sprit and leads you towardstotal happiness so that you can enjoy every moment in your lifespan. Also the "buy today, paytomorrow" habit of today's generation makes the need of Personal Financial-Planning more pertinent(relevant). If you don't plan your future finances in advance, tomorrow it will be too late for you to meetyour old age needs of regular income and medical care. Increasing life expectancy and no social securityprovision in India add to the fact and make an urgent call for Financial Planning for every human being.

Comprehensive 360 Financial Planning is like making your own financial horoscope. A roadmap toenable you to make all the provisions for your financial needs and responsibilities in life; you can planahead for the following through comprehensive financial planning.

Dream House Plan your finances well to turn your dream house into a reality. The prideand a sense of security in owning a house is tremendous.

Education of Children Every parent dreams of giving the best education to their children. Withproper Financial Planning now you can plan ahead for their education.

Child's Wedding The wedding of our children always hold a very important place of our life.So make it a gala (festival) affair with financial planning

Wealth Creation Lots and lots of money- that's what anybody dreams and wants to have. Planit and create wealth to have a secure future.

Retired Life After working hard in life anybody would love to spend later years of lifecomfortably. So plan it now with prudent financial planning.

Risk Management Protect your movable and immovable assets through insurance. It's a part offinancial planning.


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Sample Financial PlanDon't just dream... Plan!

Financial Planning is becoming increasingly popular in developed countries all over the world. Now,

with a little help from Bajaj Capital, you too can give yourself the 360 Financial Planning edge!Get your Financial Plan prepared now. To help you understand better here is a sample snapshot.

Your Financial Plan would look like this (Following are view of sample snapshot):

PERSONAL FINANCIAL PLAN


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Sample Financial Plan

PORTFOLIO PROJECTION


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CASHFLOW PROJECTION


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ASSET ALLOCATION


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CURRENT SITUATION


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FINANCIAL PLAN GOALS


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Financial Frequently Asked Questions (FAQ)What is Financial Planning?

Financial planning is the process of meeting your life goals through the proper management of yourfinances. Financial planning helps you make advance provision for financial needs that will arise in the

future. The objective of financial planning is to ensure that the right amount of money is available in theright hands at the right point in the future to achieve an individual's life goals.

Why should I make a Financial Plan?

Financial planning provides direction and meaning to your financial decisions. It allows you tounderstand how each financial decision you make affects other areas of your finances. For example,buying a particular investment product might help you save adequately to finance your child's highereducation or it may provide enough for a comfortable retirement. You can also adapt more easily to lifechanges and feel more secure that your goals are on track.

Who is a Financial Planner?

A financial planner is someone who uses the financial planning process to help you determine how tomeet your life goals. The key function of a financial planner is to help people identify their financialplanning needs, their present priorities and the products that are most suitable to meet their needs. He orshe normally possesses detailed knowledge of a wide range of financial planning tools and products, buthis major role is to help clients choose the best products for each need. The planner can take a 'bigpicture' view of your financial situation and make financial planning recommendations that are right foryou.

Can I do my own Financial Planning?

Some personal finance software packages, magazines or self-help books can help you do your ownfinancial planning. However, you may decide to seek help from a professional financial planner if:

You need expertise you don't possess in certain areas. For example, a planner can help youevaluate the level of risk in your investment portfolio and revise your asset allocation

You don't have the time to spare to do your own financial planning; You know that you need to improve your current financial situation but don't know where to

start; You feel that a professional advisor could help you improve on how you are currently managing

your finances; You have an immediate need or unexpected life event such as an inheritance or major illness; You want to get a professional opinion about the financial plan you developed for yourself.

What should I look for in a Financial Planner?A financial planner works for you. His or her loyalty should be to the client, not the product (s)he istrying to sell. The financial planner should be in a position to provide you with unbiased advice andrecommend products that match your needs and are the best performing ones available. Look for anyaffiliations of the financial planner to any product manufacturer. Until unless the financial planner istruly independent, (s)he will not be able to give you objective advice.


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F.A.QHow can I plan for tomorrow when I can hardly pay for today?

Have a budget. Determine what you actually spend each month. There are fixed expenses like rent, loanrepayments, etc. every month about which we can do little. The variable items such as food, clothingand entertainment are often what get away from us. Use your discretion to contain these variableexpenses to start saving.

How much should I be saving?It is hard to apply a rule of thumb toward savings, because it varies with age and income level. Tenpercent is a good start. If you find that is too high for you, don't let that deter you. You can start byputting a little aside each month and then slowly increasing it.

What if I don't achieve my goals?

Financial planning is a common sense approach to managing your finances to reach your life goals. Itcannot change your situation overnight; it is a lifelong process. Remember that events beyond yourcontrol such as inflation or changes in the stock market or interest rates will affect your financialplanning results.

Why do I have to provide so much personal information?Consider a visit to your doctor. Without complete and fully accurate details, your doctor cannotprescribe the best course of action. The same applies to financial planning. In order to obtain the bestservice for your 'financial health' all details and specifics must be disclosed.

What type of information do I have to provide?

Typically, information regarding investments held, number of dependants, income and expendituredetails, and savings and financial planning needs, etc. The more accurate information you give, thebetter the quality of advice given.

What should a Financial Plan include?

A financial plan should include a review of your net worth, goals and objectives, investment portfolio,cash flow, investments, retirement planning, tax planning and insurance needs, as well as a plan forimplementing your goals.

Why is there an evaluation of my insurance needs?

Evaluating your insurance needs is part of personal financial planning. Insurance takes care of yourunpredictable needs and as these needs can arise at anytime, insurance is extremely important.Investments take care of your predictable needs and ideally should follow after your unpredictable needsare first addressed. The insurance industry has changed a great deal over the past few years and there is awhole array of new products from LIC as well as private insurance companies.

What about taxes?It is important that financial plans are tax efficient. The financial plan should help you in minimizingyour tax liability and also maximizing your after-tax returns from your investments. Some financialplanners help their clients in preparing and filing their tax returns.


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F.A.QAfter a plan is developed, what next?

The best plan is useless unless it is put into action. Your financial planner will assist you completely inimplementing the plan, if and when, desired by you.

How often should I update the plan?

It is good to review the plan when there is a lifestyle change such as marriage, birth, death or divorce.

Any change in financial position should be evaluated as well. Most people have an annual update thatreviews how the plan is being implemented. The review also considers changing goals andcircumstances.


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Plan

1. Investment Planning2. Insurance Planning3. Retirement Planning.4. Tax Planning5. Children's Future Planning6. Cash Flow Planning

InvestmentsPlanning

InsurancePlanning

RetirementPlanning

TaxPlanning

Children's FuturePlanning Cash Flow

Planning


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1. Investment Planning

Everyone needs to save for a rainy day. Once you have saved enough to take care of emergencies, youshould start thinking about investing and to make your money grow. We can help you plan yourinvestments so that you can reap adequate benefits and achieve your financial goals.

Bajaj Capital's Investment Planning Service includes:

Risk Profiling Asset Allocation and Portfolio Construction Creation and Accumulation of Wealth through Systematic Investment Plans (SIP) Regular review of progress and Portfolio Rebalancing

Essentially, Investment Planning involves identifying your financial goals throughout your life, andprioritising them. Investment Planning is important because it helps you to drive the maximum benefitfrom your investments.

Your success as an investor depends upon your ability to choose the right investment options. This, inturn, depends on your requirements, needs and goals. For most investors, however, the three primecriteria of evaluating any investment option are liquidity, safety and return.

Investment Planning also helps you to decide upon the right investment strategy. Besides yourindividual requirement, your investment strategy would also depend upon your age, personalcircumstances and your risk appetite. These aspects are typically taken care of during investmentplanning.

Investment Planning also helps you to strike a balance between risk and returns. By prudent planning, itis possible to arrive at an optimal mix of risk and returns that suits your particular needs andrequirements.


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Plan > Investment Planning

IMPORTANCE OF INVESTMENT PLANNING

Essentially, Investment Planning involves identifying your financial goals throughout your life, andprioritizing them. For example, if you want to invest for funding your vacation next year, don't choosean investment vehicle that has a three-year lock-in. Similarly, if you want to invest for your daughter's

marriage after 10 years, don't invest in 1yr bonds for the next 10 years. Instead, choose an option thatmatches your investment horizon.

Investment Planning is important because it helps you to derive the maximum benefit from yourinvestments. Your success as an investor depends upon your ability to choose the right investmentoptions. This, in turn, depends on your requirements, needs and goals. The choice of the best investmentoptions for you will depend on your personal circumstances as well as general market conditions. Forexample, a good investment for a long-term retirement plan may not be a good investment for highereducation expenses.

In most cases, the right investment is a balance of three things:

Liquidity, Safety and Return.

Investment Planning also helps you to decide upon the right investment strategy. Besides yourindividual requirement, your investment strategy would also depend upon your age, personalcircumstances and your risk appetite. These aspects are typically taken care of during investmentplanning. Investment Planning further helps you to strike a balance between risk and returns. By prudentplanning, it is possible to arrive at an optimal mix of risk and returns, which suits your particular needsand requirements.


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EVALUATING OPTIONS

(Best Investment Planning)

Choosing the Right Investment Options

The choice of the best investment options for you will depend on your personal circumstances as well asgeneral market conditions. For example, a good investment for a long-term retirement plan may not be agood investment for higher education expenses. In most cases, the right investment is a balance of threethings: Liquidity, Safety and Return.

To a large extent, the choice of the right investment option will also depend upon your financial goals.For example, if you want to invest for funding your vacation next year, don't choose an investmentvehicle that has a three-year lock-in. Similarly, if you want to invest for your daughter's marriage after10 years, don't invest in 1yr bonds for the next 10 years. Instead, choose an option that matches yourinvestment horizon.

Choosing the Right Investment Option

LIQUIDITY

How easily an investment can be converted to cash,since part of your invested money must be availableto cover financial emergencies.

SAFETY

The biggest risk is the risk of losing the money youhave invested. Another equally important risk is thatyour investments will not grow and you'll not earnenough from it to offset the impact of inflation.There are additional risks like decline in economic

growth. But the biggest risk of all is not investing atall.

RETURN

Investments are made for the purpose of generatingreturns. Safe investments often promise a specific,though limited return. Those that involve more riskoffer the opportunity to make - or lose - a lot ofmoney.


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INVESTMENT STRATEGIES

You can make your own investment picking approach or adopt one after consulting financial experts orinvestment advisors. Whatever method you use, keep in mind the importance of diversification, orvariety in your investment portfolio and the need for a strategy, or a plan, to guide your choices.

Investment ApproachesThe options you choose to put your money in; reflect the investment strategy you are using - whetheryou realize it or not. Most people adopt the following approaches:-

ConservativeThese investors take only limited risk by concentrating on secure, fixed-income investments etc.

ModerateSuch Investors take moderate risk by investing in mutual funds, bonds, select blue-chip equity shares,etc.

AggressiveThese are investors who take major risk on investments in order to have high (above-average) returnslike speculative or unpredictable equity shares, etc.

As a matter of fact, the investment approach of an investor is directly linked to his or her ability toshoulder risk. The ability to take risks depends largely on personal circumstances and factors like age,past experiences with investing, level of responsibility, etc.

Try our Risk Thermometer find out your risk-taking abilityhttp://www.bajajcapital.com/financial-planning/investment-planning/risk_thermometer.php

An investor's money never goes to sleep. It earns him interest every hour of the day and all 365 days ofthe year.


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INVESTMENT PLANNING STEPS

Investment Planning is the key to successful investing. It is a scientific process, which, if done in theright sprit, can help you achieve your financial goals. Here are the basic steps of Investment Planning.

Step 1: Identify your financial needs and goals

The starting point of a sound investment plan is to begin with a clear understanding of you financialneeds and goals. Typically, any financial need or goal would translate into determining the tenure ofyour investment (investment horizon). All investment needs and goals can therefore be translated into:

Short-term (less than 1 year), Medium-term (more than 1 year), and Long-term (more than 5 years).

Here is an example of the financial goal of a typical household (a couple with two children).

Financial Goals Expected Cost(at todays prices in Rs)

Time Frame Investment Horizon

Anils computer 0.5 Lakhs Next month Short-term

Sunitas school admission 0.35 Lakhs 6 months Short-term

Vacation 0.5 Lakhs 1-2 years Medium-term

Buying a second car 5 Lakhs 2-3 years Medium-term

Anils education 2 Lakhs 10-12 years Long-term

Sunitas education 2 Lakhs 12-15 years Long-term

Retirement 20 Lakhs 20-25 years Long-term

Step 2: Understanding investment choices

There are three basic investment categories: Equity, Debt, and Cash.

Any investment can be classified into one of these three categories, or asset classes. The key toinvestment success lies in understanding how each asset class performs over the various investmenthorizons, the choices within each category and the risks involved in making investment decisions ineach of these choices.

Equity or Stocks: are ownership shares investors buy in a corporation. When you make equityinvestments, you become part-owner (to the extent of your shareholding) of the company you haveinvested in. However, there is no particular rate of return indicated while investing. The current value ofyour holding is reflected in the price at which the stock/share is traded in the stock markets. Hence, theseconstitute a relatively riskier form of investment.


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Debt Instruments or Bonds: are loans investors make to corporations or the government. They promise afixed return at the time of making the investment. Also the promise of getting the money back isdependent on who is making the promise. In case of the Government, the promise will certainly getfulfilled, but if the issuer of debt is a company or an institution, the quality of the issuer needs to beadjudged, to ascertain its ability to keep the promise. Debt investments, therefore, provide you with the

promise that your principal will be returned along with the interest payable thereon.

Cash: includes money in bank savings accounts and other liquid investment options.

AssetClasses

Instruments Risk

Cash Savings deposits in a bank, Liquid Mutual funds Low

DebtGOI Relief Bonds, Public Provident Fund, NationalSavings Certificate, Company Fixed Deposits, Debt-based Mutual funds ,Debentures/Bonds

Low to Medium, depending on thetype of issuer. In case the issuer isGovt, the risk of default is negligible

Equity

Equity-based Mutual Funds Stocks/shares issued by

various companies High

Step 3: Decide an appropriate mix of various investment choices (Asset Allocation Plan)

Making an asset allocation plan is about determining the proportion of investments in each of the threebasic asset classes. Essentially this depends upon your profile as an investor. Whatever stage of life youare at, you would need to invest part of your money for security and liquidity. A part of yourinvestments should generate regular income and part of it should contribute to growth and capitalappreciation. The proportion however, will vary based on individual goals, time horizons available tomeet those goals and one's risk profile (the tolerance reaction to any down turn in the stock/debt

markets). The key to investment success lies in determining the appropriate mix of the above mentionedcategories and not just the individual investments that are done within each category.


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INVESTMENT PLANNING TIPS

Set a GoalWhat you want to achieve and when-deciding this is important. So set financial goals to bring purposeand clarity to the investment process.

Research RegularlyNext step is to know what kind of investments will help you achieve the goal. You can do it yourself ortake the help of a professional investment advisor.

Invest EarlyOnce you know where to invest; do it as soon as possible. The earlier you begin, the more you benefitfrom the power of compounding.

Budget PlanningA must for all prudent investors; Budget Make you live within your means and give a clear picture of

your finances.

Avoid DebtsAvoid unnecessary borrowings. Treat extra expenses as a loan that you must repay yourself. Makesaving a habit. Small changes in your lifestyle can result in major changes in your saving corpus.

Review and ReinvestBe alert and open to changes. Markets change, your needs change, investment instruments change. Beaware and make it a point to review your investments from time to time to create maximum wealth foryourself.


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INFLATION DEVIL

Inflation, the rate at which the general level of prices for goods and services rises, can steadily erode thepurchasing power of your income. That is why you should invest a portion of your savings at a ratehigher than the inflation rate to recover the loss of purchasing power.

This means that over time a rupee will be able to buy a lesser amount of goods and services. If theinflation rate is 5%, then Rs. 100 worth of goods will cost Rs. 105 after a year.

The following table indicates how the value of Rs 1 Lac will change over time atdifferent levels of inflation.

Years Inflation % P.A

2% 3% 4% 4.5% 5% 6%

5 90,573 86,261 82,193 80,245 78,353 74,726

10 82,035 74,409 67,556 64,393 61,391 55,839

15 74,301 64,186 55,526 51,672 48,102 41,727

20 67,297 55,368 45,639 41,464 37,689 31,18025 60,953 47,761 37,512 33,273 29,530 23,300

30 55,207 41,199 30,832 26,700 23,138 17,411

Table indicating the value of Rs 1 Lac at different levels of inflation over time.


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THE POWER OF COMPOUNDING

Regardless of where you choose to put your money - cash, stocks, bonds, or a combination of these - thekey to saving for the future is to make your money work for you. This is done through the power ofcompounding.

Compounding investment earnings is what can make even small investments become larger, givenenough time. You are probably already familiar with the principle of compounding. The money you putinto a bank account earns an interest. Then, you earn interest on the money you originally put in, plus onthe interest you have accumulated. As the size of your account grows, you earn interest on a bigger andbigger pool of money.

The following table shows how much your money would grow when you invest afixed amountper month over a period of 10, 15, 20, 25, and 30 years, assuming aninterest rate of 10% p.a.

Years Amount (Rs)1000 2000 3000 4000 5000

5 78,082 156,165 234,247 312,330 390,412

10 206,552 413,104 619,656 826,208 1,032,760

15 417,924 835,849 1,253,773 1,671,697 2,089,621

20 765,697 1,531,394 2,297,091 3,062,788 3,828,485

25 1,337,890 2,675,781 4,013,671 5,351,561 6,689,452

30 2,279,325 4,558,651 6,837,976 9,117,301 11,396,627

Here's how much your money would grow if you make a lump sum (one-time)investment and leave it untouched. The interest rate has been assumed to be 10%.

Years Amount (Rs)

100000 200000 300000 400000 500000

5 161,051 322,102 483,153 644,204 805,255

10 259,374 518,748 778,123 1,037,497 1,296,871

15 417,725 835,450 1,253,174 1,670,899 2,088,624

20 672,750 1,345,500 2,018,250 2,691,000 3,363,750

25 1,083,471 2,166,941 3,250,412 4,333,882 5,417,353

30 1,744,940 3,489,880 5,234,821 6,979,761 8,724,701

The real power of compounding comes with time. The earlier you start saving, the more your money canwork for you. To attain certain amount of corpus within a set period of time, a pro-active investmentstyle is preferable. Thus, no matter how young you are, the sooner you begin saving for the future, thebetter it is.


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The Magic of Compounding:

Long time ago there was a King in India who loved to play games. He soon grew bored of all the gamesplayed at that time and wanted a new game that was challenging. He commissioned a poormathematician who lived in his kingdom to come up with a new game. The mathematician invented the

game of chess. When he showed it to the king, the ruler was so pleased that he gave the inventor theright to name his prize for the invention. The man, who was very wise, asked the king: "Your highness,if you place just one grain of rice on the first square of this chess board, and double it for every square, Iwill consider myself well rewarded." "Are you sure?" asked the king, greatly surprised. "Just grains ofrice, not gold?" "Yes, your highness" affirmed the humble man. "So it shall be" ordered the king, and hiscourtiers started placing the grain on the chess board. One grain on the first square, 2 on the second, 4 onthe third, 8 on the fourth and so on. By the time they came to the 10th square they had to place 512grains of rice. The number swelled to 5, 24,288 grains on the 20th square. When they came to the halfway mark, the 32nd square, the grain count was 214, 74, and 83,648- that is over 214 crores! Soon thecount increased to lakhs of crores and eventually the hapless king had to hand over his entire kingdom tothe clever mathematician. And it all began with just one grain of rice!

Moral of the story:Never underestimate the power of compounding. It is rightly called as the 8th wonder of the world.Small amount of money invested every month from the beginning of your work-life can lead to millionsat the time of your retirement.


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RISK THERMOMETER

The age group I belong to is: 21 - 30 Years 31 - 35 Years 35 - 45 Years 45 - 55 Years Above 55 Years

I have: More Then 3 dependents 1-3 dependents No dependents

Which statement best describes your approach as an investor? I am very cautious about taking risks, and I want to avoid losses. I am somewhat cautious about taking risks, and I can handle relatively small losses. I can take some risks that are generally associated with greater account growth potential but I

wish to minimize short-term losses in my account. I am open to taking risks for growth potential. I am less concerned about short-term (less than

one year) losses or gains; I am more interested in long-term growth. I am risk taker and want to maximize the growth of my account over the next decade or longer. I

am not concerned about short-term losses.

When is your next big spending due or expected? Less than 1 year Between 1 year 3 years Between 3 years 5 years More than 5 years

Do you have an emergency fund set aside to meet any unexpected requirement? No, I do not have any money for emergencies. I have enough to meet one month's expenses. I have enough to meet two to three months' expenses. I have enough to meet four to six months' expenses. I have more than six month's worth.

You receive an unexpected bonus equivalent to three months' salary, Will you?

Put it in a bank deposit at 5% guaranteed return? Invest it in an instrument which gives a return in the range of 4-7%. Invest it in an instrument that gives a return of around 15% p.a.with a downside 3 risk of 10%.


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How often do you monitor your investments? Daily or Weekly Monthly Occasionally

When you make an investment decision, you Decide on gut feel. Seek advice from friends and well-wishers. Rely on your investment advisor. Analyze all options thoroughly.

Investments with higher short-term volatility are more likely to have a greater chance of meeting long-term goals. Conversely, investments likely to provide stable returns and minimum short-term losses areless likely to meet long-term investment goals. With this in mind, which of the following is mostconsistent with your investment attitude?

Avoiding short-term losses is more important to me than meeting long-term goals. I am equally concerned about avoiding short-term losses as well as meeting long-term goals. I am willing to bear short-term fluctuations to maximize the chance of meeting my long-term

goals.

The chart below shows possible growth of Rs. 100 over a five-year period for a series of differentinvestment strategies. Which of the five scenarios are you most comfortable with as an investor?

130 to 160 110 to 176 90 to 200 77 to 250 59 to 280

What percentage (%) of your portfolio is allocated to Equity currently? No investment in Equity Upto 10% Between 10% to 30% Between 30% to 60% More than 60%


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Risk Thermometer Result


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2. Insurance Planning

Security is something we all look for:

Security of our Future, Security of Finances, and Security of our Loved Ones.

This makes Insurance Planning important

Goes a popular saying that explains the importance of Insurance Planning:It is extremely important that every person, especially the breadwinner, covers the risks to his life, sothat his family's quality of life does not undergo any drastic change in case of an unfortunateeventuality.

So what are the risks that we run? To name a few:

Risk on our lives The worries of replacement of the incomes that we contribute to therunning of the household

Risks of medical contingencies Since they have the capability of depleting our wealth considerably

Risks to assets As the replacement of these can have tremendous financialimplications

If we can imagine a situation where our goals are disturbed by acts beyond our control, we realize therelevance of insurance in our lives. Insurance, simply put, is the cover for all the risks that we run intoduring our lives. Insurance enables us to live our lives to the fullest, without worrying about thefinancial impact of events that could hamper it. In other words, insurance protects us from the

contingencies that could affect us.


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Plan > Insurance PlanningWhy Insurance Planning?

(For different stages of life)

Insurance Planning is concerned with ensuring adequate coverage against insurable risks. Calculatingthe right level of risk cover is a specialized activity, requiring considerable expertise. Proper InsurancePlanning can help you look at the possibility of getting a wider coverage for the same amount of

premium or the same level of coverage for the same amount of premium or the same level of coveragefor a reduced premium. Hence, the need for proper insurance planning

Insurance Planning takes into account the risks that surround you and then provides an adequatecoverage against those risks. There is no risk not worth insuring yourself against. Be it life or non-life.And insurance should first and foremost be looked as a measure to guard against all risks.

Now depending upon person to person Insurance needs differ too. It depends on your age, profile,requirements, level of risks, your income etc. So insurance planning takes into account all the factorsbefore chalking out a plan customized for you and gives you the most suitable option.


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Plan > Insurance Planning

LIFE INSURANCE

Life Insurance for Retirement Why & How to Plan Life Insurance Life Insurance for Savings Life Insurance for Health Life Insurance for Tax Savings Life Insurance for Children Education / Future


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RETIREMENT PLANNING

(Life Insurance)

Retirement planning is the important task of deciding how one will live once he/she retires. Retirementplanning involves the consideration of a number of factors, including at what age you hope to retire,

how much money you will need to cover the living expenses coupled with the things you plan to doonce you've retired, and where your money will come from.

In short, retirement planning is planning your finances for the period of life after you stop working.

Why Retirement Planning is necessary?

Longer retirement years:Average life spans are increasing in India and hence, the retirement years are likely to be longer.With the rise in inflation you will need more money to live in comfort.

Financial independence post retirement:Earlier, people could depend on their children to take care of them post retirement. However, asa modern individual, would you not like to maintain your financial independence post retirementalso?

Inflation:Inflation is an important factor. Post retirement, you need a regular income to ensure that yourexpenses can be met.

How to plan for retirement?

Here is a small way to do your Retirement Planning:

1. First of all see what is your current household expenditure are.2. Inflation is one important factor that needs to be taken into account, so grow your current

household expenditure at an assumed rate of inflation for the years remaining for retirement.3. You will get the required inflation adjusted post retirement income.4. Then you will have to calculate the monthly investment required to meet the desired retirement

income required.

When to start for Retirement Planning?

"You are never too young to start for retirement planning" as the famous saying goes.

So plan for your retirement as early as possible so that you can create a good amount of corpus foryourself at the time you retire.

There are various factors that need to be taken into account to do retirement planning for oneself likecost, inflation, market volatility etc as these factors eat up the money saved by you.


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Plan > Insurance PlanningLet us see an example here:

Mr. Mohan started investing Rs 4000 per month at the age of 30 and his friend Mr. Sohan startedslightly late at the age of 40. He invested Rs 6000 per month, when both of them retired at the age 60.

Mr. Mohan Mr. Sohan

Age at which began investing (yrs) 30 years 40 yearsMonthly investment amount (Rs) 4000 6000

Total Amount invested (Rs) 14,40,000 14,40,000

Corpus at age 60 (Rs) 91,17,301 45,94,181

Mr. Mohan is a rich man by almost Rs 45,00,000.

This is the power to start investing early as it makes an exponential difference.


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INSURANCE PLANNING

(Life Insurance)

Insurance Planning is one of the most important pillars of Financial Planning. This is because LifeInsurance is the only tool which can fulfill financial commitments in case of untimely death of the bread

earner of the family. Thus having an appropriate life cover is important.

Why Insurance Planning is required?

Increasing liabilities:People today prefer to take loans to fulfill their needs, instead of waiting to save for the future.Hence, in your absence, your family needs to take care of this loan

Nuclear family structure:Earlier, people could depend on their extended joint family system to take care of their near anddear ones in case of their absence. However, the share of families with more than 5 members has

come down from 64% in 1990 to 56% in 2005 and is expected to decrease further.

Increasing lifestyle diseases:People these days are prone to many diseases as a result of which the longevity of life is alsoreduced. Thus it gets important to take an appropriate risk cover and give your family afinancially secure future.

Loans & Liabilities:Insurance policy also helps to cover up one's loans and liabilities. The house one buys for ourshelter, we would never want to let it go. Thus an insurance policy can help one to cover the loanliabilities.

How much Life Cover should one take?

This is determined by the concept of Human Life Value (HLV).

HLV is the monetary value of all the yet-to-be fulfilled needs of the dependents plus all the outstandingliabilities.

Human life value, commonly known as HLV, is an easy to use numeric way of arriving at an answer tothe question above. An individual's HLV is typically expressed in terms of multiple of his or her annualincome.

1. Some people think that they are adequately insured but in reality this is not the case.2. As a thumb rule, 100 times of the monthly household expenditure should be an ideal risk cover

for an individual.3. 80-90% of the risk is covered through 100 times of the monthly household expenditure.4. The objective of this is that people think that they are adequately insured but in reality they are

not able to manage their household expenditure for even 2 years also.


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Plan > Insurance PlanningWhen to start for your Insurance Planning?

Look at the table below:

It shows the premium amounts that an individual at different ages would pay for a risk cover of Rs.1Crore for 20 years.

Age Premium

30 years 34653

35 years 46070

40 years 65973

45 years 98504

There is a difference in the premium amount if you take insurance at later ages. This is because theprobability of diseases is larger at high ages and mortality is high.


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SAVING PLANNING

(Life Insurance)

Savings and investments go hand in hand. In fact small amount of money saved magically compoundsinto a good lumpsum amount in future which can be utilised to fulfill one's financial goals and thus

results in wealth creation for future.

The earlier one starts to plan for wealth creation, the earlier and conveniently the goals of life can bemet.

Case-I Case-II Case-III

Target Amount (Rs.) 3200000 3200000 3200000

Tenure (years) 20 15 10

Returns (%) 10 10 10

Annual Investment (Rs.) 55870 100716 200785

Monthly Investment (Rs.) 4656 8393 16732

Why are Savings / Investments required?

1. Asset purchase needs are fulfilled:Savings and investments result in wealth creation for an individual. He can use his savings or thelumpsum amount that he has created for purchasing any asset he wants and can fulfill hischerished dream.

2. Disciplined savings to curb wasteful expenditures:Insurance inculcates the habit of regular and disciplined savings, which is the key to successfullong term financial planning. Pay your premiums regularly and enjoy the uninterrupted benefits

of wealth insurance.

3. Tax benefits :Apart from protection and savings, wealth insurance plans also offer tax benefits as perprevailing tax laws.


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When to start doing savings for yourself?

It is never too early to plan for oneself. Rather planning done on time helps save and create a handsomecorpus after a few years.

Look at the table below:

It shows the amount of money that an individual would need to save per month in order to have a corpusof Rs.32 Lacs after 20, 15 and 10 years, assuming growth rate of 10%.

Case-I Case-II Case-III

Target Amount (Rs.) 3200000 3200000 3200000

Tenure (years) 20 15 10

Returns (%) 10 10 10

Annual Investment (Rs.) 55870 100716 200785

Monthly Investment (Rs.) 4656 8393 16732


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HEALTH INSURANCE / PLANNING

(Life Insurance)

Health is wealth as the common saying goes. Health is the most important thing for any individual andtherefore planning well for it becomes important.

Why is Health Insurance necessary?

1. Medical emergencies can strike anytime to anyone unexpectedly, so to handle these unforeseencontingencies health planning becomes necessary.

2. Due to heavy cost involved in good medical care, one's savings get exhausted in heavy medicalexpenses and with rising cost it can get worse.

3. Also due to changing lifestyles of people due to long working hours, lack of exercise, stresslevels, bad eating habits etc, the immunity system gets weakened and thus the chances of illnessgets increased.

How to take Health Insurance?

Generally, there are no savings available under health plans. Thus planning for one's health can be donethrough Unit Linked Health Plans (ULHP). Unit Linked Health Plans are the plans wherein theindividual can also create a fund for himself, as being a unit linked plan his investments are also made inthe market. These plans would help create a corpus and thus cover up health emergencies.

Thus sound health cover planning ensures you have access to sufficient funds to meet direct medicalexpenses of the treatment, indirect expenses at the time of treatment and loss of income, if any, due tothe illness.


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TAX PLANNING

(Life Insurance)

Tax Planning is a very important part of an individual's financial planning. Nobody wants to give theirhard earned money as taxes. Therefore planning for taxes is important so that one can get maximum

advantage of all the provisions available under the Income Tax Act 1961.

Insurance policies enjoy tax benefits under section 80C and section 10(10D), subject to conditions. Buttax savings should not be the sole reason to buy an insurance policy. An individual should focus on hisgoal planning as well and then buy the life insurance plan. Tax saving is incidental in nature. Thereforeone should look at his needs and objectives also while buying insurance.


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EDUCATION PLANNING

(Life Insurance)

Planning for their children and giving them the best of everything is every parent's dream. Child'seducation and marriage requires a lot of systematic planning. These are generally goal based planning

and thus some amount of money needs to be allocated every month.

However planning for the child's future through Unit Linked Plans is an ideal solution as it gives thefamily an ideal solution as it gives the benefit of both family protection and high returns.

Why Child Insurance is required?

1. Increasing cost of education, because of which one needs to star saving early.2. For the overall development of child and to make him an all rounder in all the fields, child

planning becomes necessary as it increases the overall cost of education.3. Child Insurance plans has the benefit of Waiver of Premium, which says that if something

happens to the parent, all the future premiums are waived off and are paid by the insurancecompany and thus the goal for which child planning was done does not get defeated.

4. Also it inculcates tax savings under the prevailing income tax laws.Parameters to be taken into consideration while doing Child Planning

1. Start as early as possible:2. Generally the tenure for planning for your child is 12-15 years. Thus one should start planning

early so that you are able to create some amount of corpus at the time your child requires. Alsothe compounding effect reduces if you start late. Thus planning for your child on time isimportant.

3. Equity based investments to get good returns:4. You can invest your money in a unit linked child plan wherein your money can be invested in

equity based fund as well, so that you are able to enjoy the market uptrend and thus create wealthfor yourself.

5. Waiver of Premium concept :The benefit of waiver of premium is very important in context of child plans. This says that incase anything happens to the father of the child, the insurance company will waive off all thefuture unpaid premiums and will pay them on behalf of the parent. On the other hand, all thefuture benefits would remain intact. Thus the purpose for which the child plan was taken doesn'tget defeated.

6. Make your current investment by taking into account your child's future goals


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Plan > Insurance PlanningGENERAL INSURANCE

General Insurance for Health (Mediclaim) General Insurance for Motor General Insurance for Home General Insurance for Travel General Insurance for Personal Accident General Insurance for Corporate

- Group Mediclaim Policy- Group Personal Accident- Office Property & Asset Insurance- Liability Insurance- Directors' and Officers' Liability Insurance- Marine Insurance- Professional Indemnity

Silent Features:

General Insurance comprises of insurance of property against fire, burglary etc, personal insurance suchas Accident and Health Insurance, and liability insurance which covers legal liabilities.

There are also other covers such as Errors and Omissions insurance for professionals, creditinsurance etc.

Non-life insurance companies have products that cover property against Fire and allied perils, floodstorm and inundation, earthquake and so on.

There are products that cover property against burglary, theft etc. The non-life companies also offer policies covering machinery against breakdown, there are policies

that cover the hull of ships and so on. A Marine Cargo policy covers goods in transit including by sea, air and road. Further, insurance of motor vehicles against damages and theft forms a major chunk of non-life

insurance business. Personal insurance covers include policies for Accident, Health etc. Products offering Personal

Accident cover are benefit policies. Health insurance covers offered by non-life insurers are mainly hospitalization covers either on

reimbursement or cashless basis. Liability insurance covers such as Motor Third Party Liability Insurance, Workmens Compensation

Policy etc offer cover against legal liabilities that may arise under the respective statutes MotorVehicles Act.

There are general insurance products that are in the nature of package policies offering acombination of the covers mentioned above. For instance, there are package policies available for

householders, shop keepers and also for professionals such as doctors, chartered accountants etc.Apart from offering standard covers, insurers also offer customized or tailor-made ones.


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HEALTH INSURANCE

(General Insurance)

Health is wealth and a Mediclaim Policy is the best way to insure it. Mediclaim is the best solution thatyou can use to cover up all medical expenses. These policies cover the insured person for in-patient

hospitalization provide extensive coverage including room charges, boarding expenses, nursingexpenses, operation theater charges, ICU charges, surgeon fees, specialist fees, medical practitioner,consultant fees, cost of medicines and drugs, blood, oxygen, diagnostic test, cost of pacemaker, artificiallimbs, etc. Pre and post hospitalization, pre-existing diseases, day care treatment, domiciliaryhospitalization, cost of health check-up, ambulance charges, etc. are also covered. Also the premiumpaid is eligible for tax benefit under section 80D of the Income Tax Act, 1961. You can avail the benefitof discount in premium for every claim free year of the policy. Some of policies also offer cashlesshospitalization service at all network hospitals. Today, there are several insurance companies offeringwider health coverage at affordable premium rates. We bring to you different products available to suityour best requirements.

Health Insurance (popularly known as Medi-claim Policy) offers protection from unexpected medicalemergencies, providing a financial support.

Health insurance therefore, can be a source of support as it takes care of the financial burden your familymay have to go through. It will help you tackle such situations with ease by providing you with timelyand adequate medical care.

This policy covers individual & ones family from medical expenses during

1. Sudden illness,2. Surgeries (acquired in respect of any disease, which has arisen during the policy period.)3. Accidents including room charges, doctor's fees, medicines, tests etc

that may arise in future.

Options available:

1. Family Floater2. Individual Health Insurance3. Individual Health Insurance + Critical Care4. Critical Care5. Personal Accident6. Top Up Policy7. Health Policy Including OPD Coverage8. Family Floater Including Parents or in-laws


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MOTOR INSURANCE

(General Insurance)

Motor Insurance is a wide comprehensive cover designed to provide protection to you & your car.Protection from loss of car or damage to the car giving a secured driving

It covers:1. Own damage2. Legal liability of insured towards third party personal injury and property damage arising out of

an accident involving the insured vehicle3. Passengers4. Hired driver5. Depreciation Reimbursement6. Loss of Personal Belongings7. Daily Allowance8. No Claim Bonus Protection9. Repair of Glass, Fibre, Plastic and Rubber Parts10.Key Replacement11.Emergency Transport and Hotel Expenses12.Return to Invoice

Options available -

1. Car Insurance2. Two wheeler3. Commercial vehicles4. Passenger Carrying Vehicle5. 3 wheeler6. Tractors etc.


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HOME INSURANCE

(General Insurance)

Home Insurance policy provides a cover to the structure and contents of your home from all unforeseennatural & man-made catastrophes.

It provides protection for property and interests of the insured and his family members. It is imperativethat you secure your home which gives one peace of mind protecting the most valued possession.

Coverages are:

1. Fire & Allied Perils2. Burglary & Theft3. Electrical & Mechanical breakdown (Domestic, Audio & Audio-visual appliances)4. Public Liability (Third Party Liability)5. Covers Accidental breakage6. Coverage to building & contents7. Personal Accident to self & family


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TRAVEL INSURANCE

(General Insurance)

Travel Insurance / Overseas Medi-claim policy is a basic requirement when one travels abroad, either itsfor business, sight-seeing, shopping or pleasure.

This policy covers you for any kind of hospitalization which is very expensively priced overseas. Alsocovers for:

1. Baggage loss,2. Passport loss,3. Personal accident,4. Trip cancellation5. Home Insurance when you are traveling6. Dental Expenses7. Maternity expenses in life saving scenario etc.

It is a single policy which covers all unforeseen risks medical & non-medical when one is in a strangeplace.

Options available:

1. Single Trip2. Multi Trip3. Student Medical4. Senior Citizen5. Pay per day basis


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PERSONAL ACCIDENT

(General Insurance)

Accidents do not happen when you are driving a car, or away on a vacation. It may happen anytime &anywhere.

Considering that modern day life is so dangerous, a personal accident policy is a solution to suchvagaries of life.

Its a Benefit Policy.

Coverages are:

1. Accidental Death Benefit2. Accidental Permanent Total / Partial Disability Benefit3. Accidental Partial / Temporary Disability Benefit4. Broken Bones5. Burns


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GENERAL INSURANCE FOR CORPORATE

- Group Mediclaim Policy- Group Personal Accident- Office Property & Asset Insurance- Liability Insurance- Directors' and Officers' Liability Insurance- Marine Insurance- Professional Indemnity


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Plan > Insurance PlanningGeneral Insurance for Corporate

GROUP MEDICLAIM

(For Corporates)

Group Mediclaim Policy

Rising costs of Healthcare have made it necessary for every employer to cover their employees and theirfamilies from financial instability that may arise in case of a hospitalization. Group Health Insurancealso called as Group Mediclaim in India is primarily cashless hospitalization coverage for youremployees and their families.

It covers the following: Hospitalization costs - if the hospitalization is for more than 24 hours. Pre and Post Hospitalization Costs. Ancillary Costs like Ambulance [specifically mentioned in the policy]. Cashless Coverage for Self+Spouse+2 Kids+ 2 Parents Pre-Existing illness Coverage from Day 1 Maternity Coverage from Day 1 Day 1 Baby Coverage Waiver of 30 Days waiting Period Waiver of 1 and 2 year Exclusions on various illnesses Waiver of any sub-limits in the policy Full Coverage for parents without Medical Tests


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GROUP PERSONAL ACCIDENT

(For Corporates)

Considering the lifestyle today; every employee in your organization is exposed to various risks of

accidental death and disability, specifically at work and while traveling to and fro the work place.

In case of any such event actually happening, the Employer has a moral duty to provide compensation,hence in our opinion; this cover becomes one of the most critical covers for employees.

A Group Personal Accident Policy provides worldwide comprehensive lump sum coverage to your stafffrom risks of accidental death and disability.

It covers the following: Accidental Death Accidental Permanent Total Disability Accidental Permanent Partial Disability Accidental Temporary Total Disability

Periodic Addition/Deletion is possible. Groups as small as 3 members can be covered


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OFFICE PROPERTY & ASSET INSURANCE

(For Corporates)

Property Insurance

1. Fire Insurance:Your office/plant is your showcase to the world. You manage and maintain your office/plantwith lot of detail, passion and money. A major fire can result in a disaster for a business to theextent that many companies never recover. The importance of having a fire insurance policycannot be over emphasized.

Fire Insurance covers your office's structure and contents not only against the risk of fire but alsoother perils like lightning, flood, storm, earthquake, riots, terrorism etc.

2. Burglary InsuranceThis policy covers property contained in business premises, stocks owned or held in trust againstthe risk of burglary. It also covers cash, valuables, securities kept in a locked safe or cash box inlocked steel cupboard on specific request.

3. Machinery Breakdown (MBD) InsuranceThe unexpected occurrences of Machinery Breakdown can damage machinery and causeexpensive production delays or interrupt cash flow. This policy covers the breakdown ofmachinery due to various perils. This policy is indispensable for businesses that operate using alarge number of machines. The breakdown of a single machine may bring the operations of thefactory to a standstill. This policy covers monetary costs involved in restoration or replacementof machines. \

4. Money InsuranceBusinesses handle cash, and bankers' drafts, making this form of insurance essential.

5. The Insurance Covers: Covers money while in transit in the personal custody of the insured or his employee. Covers money in premises during business hours, Covers money in a safe or strong room outside business hours.

6. All Risks InsuranceThis policy covers valuables like Jewellery, ornaments, paintings, work of art, and similar

artifacts of sentimental values.

The policy provides cover on a wide basis and covers loss or damage due to fire, riot & strike,burglary, house breaking, theft and accidental loss or damage. Cover is not freely granted onaccount of its vulnerability to losses and moral hazard.


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360o Plan > Insurance PlanningGeneral Insurance for Corporate > Office Property & Asset Insurance

7. Contractor's All Risk (CAR) Insurance:Construction being a risk prone industry, accidents, including personal injuries and propertydamage are very frequent, and these accidents may bust your plans, schedules and costs. A CARpolicy covers the physical damage to materials to be used for the project - whether in transit, in

storage or forming part of the contract works. There is also an ancillary cover up to moderatelimits for third party liabilities. It is a main feature of the CAR policy to cover those who have animmediate material interest in the project. That includes the owner, the contractor and usually allsub contractors.

Equipment Insurance

Businesses today depend on computers, laptops and other electronic devices for their day-to-dayoperations. The Electronic Equipments Insurance policy protects your equipment like computers,communication systems and other electronic equipment from any risk while such equipment is at work,

at rest or during maintenance operations. The policy can also cover the additional expenditure that youwill have to incur by way of hiring substitute systems.

1. Scope of Cover:Cover operates when the insured property is at work or at rest or being dismantled for thepurpose of cleaning/overhauling or during subsequent re-erection.

2. The Policy broadly covers:Material damage to electronic equipment (which can include systems software) due to suddenand unforeseen events, under Section I Cost of external data media, including cost ofreconstruction of data under Section II, as also increased cost of working under Section III.

While Section I is compulsory, Section II and Section III are optional.

3. Sum InsuredSection I:New Replacement cost of the insured property including Freight, Erection cost, CustomsDuty, if any.

Section II:Cost of restoring the external data media by replacing lost or damaged data media by newmaterial and lost information.

Section III:Sum Insured should represent the hiring charges per hour for substitute equipment forensuring continued data processing for the period of indemnity specified, includingpersonnel and transportation charges.


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Fire Insurance

For most of the businesses, a Fire/Property Insurance policy is more like a routine electricity/water bill.The Insurance Company sends the renewal notice, you negotiate on premium and premium is paid off.

The policy is then forgotten till the renewal comes up.

With terrorism and other risks growing, your business needs to be insulated and protected from any suchfinancial catastrophe. Fire, Riots, Terrorism, Explosion, etc. can cause severe damage to the survival andcontinuity of any business. At the same time, you need to have the correct idea of what the policy coversand what are the extensions you can go for.

Question: What does Fire & Special Perils Insurance Cover?Fire and Special Perils Insurance, one of the oldest forms of Insurance covers these risks, covers amajority of risks on property, making it one of the most crucial and basic covers any business needs totake.

It covers the following perils:1. Fire2. Lightning3. Explosion/Implosion4. Aircraft Damage5. Riot, Strike, Malicious and Terrorism Damage6. Atmospheric Perils: Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood and

Inundation.7. Loss or visible physical damage to property due to impact of any Road/Rail Vehicle or animal in

direct contact not belonging to the owner/employees

8. Subsidence and Land Slide including Rock Slide.9. Bursting/Overflowing of Water Tanks, Apparatus and Pipe10.Missile Testing Operations11.Bush Fire [Excluding Forest Fire]12.Important Add-On


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The following are some important Add-On/Riders which could be added as per your requirement to thepolicy:

1. Earthquake:Earthquake is an Exclusion in the Standard Fire Policy, this needs to be taken as an add on coverwith payment of additional premium.

2. Incremental Cost of Alternate AccommodationThis provides for additional expenses incurred in for the alternate accommodation.

For e.g. you pay a lease of Rs. 2 Lakhs for your current property per month, and due tofire and alternate accommodation for your staff, you are forced to lease a property of Rs. 5Lakhs, then you can insure your additional cost of Rs. 3 Lakhs. In case you own the property,you can insure the additional cost for Rs. 5 Lakhs.

3. Omission to Insure Additions and AlterationsIf you have regular purchase of equipment, machinery, valuable parts - you can take a blanketcover of say 10% of the total value of equipment, to avoid the danger of omission to add/alter.

4. Start Up ExpensesIf after reinstatement of the property, there would be additional costs to start the smoothfunctioning of your business/production, you can take a cover against these expenses too.

5. Spoilage Material DamageIf your production plant runs continuously, then there is a risk of sudden stoppage, due to whichthere could be damage to the machinery as well as spoilage of material in the machinery. Thisdamage can be covered as an ADD ON.

To conclude, Fire & Allied Insurance is a very vast and flexible Insurance Coverage,covering various man and god made calamities, extremely essential as a part of your RiskManagement System.

It could be the most comprehensive coverage for you, at the same time, if you don'tinvest time or professionals- it could actually be another electric bill, with no return.


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Office Package Policy

Office Insurance Package is a comprehensive package of different insurance policies that provideflexibility and cover for various contingencies. A package policy like this avoids you arranging different

policies for fire, burglary, machinery breakdown etc. It provides you complete control of managing allyour risks in office under one policy.

Over and above this, an Office Insurance being a package plan also helps you get gooddiscounts.

1. Fire (Building and Contents)Covers losses caused by fire, lightening, riot, strike, storm, cyclone, flood and terrorism.

2. BurglaryProtects contents of your shop against any loss or damage caused by burglary or attemptedburglary

3. Burglary of cash in safeProvides for losses resulting from the burglary of cash kept in safe

4. Cash in transitCovers losses because of burglary of cash while it is being carried from the bank/ATM toyour shop

5. Glass breakageCovers loss or damage to any fixed plain glass caused by any accident, external and visiblemeans.

6. Damage to neon signCovers neon or glow signs displayed at your shop premises against damage caused by fire,accident, riot, and flood.

7. Cheque forgeryCovers loss caused by forgery or material alteration of cheques, drafts or any othernegotiable instruments issued by you or in your favour.

8. Fidelity:Covers direct financial losses sustained due to fraud or any dishonest act by your salaried

employees.

9. Tenant's legal liability:This cover provides for legal liability imposed on you by the property owner on account ofdamage to property by fire, earthquake, flood and riots.

10.Employer's liability:It provides for legal liability to your employees.


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LIABILITY INSURANCE

(For Corporates)

In the increasingly litigious world that we are in Irrespective of the size of business, it is critical to

consider liability insurance. It is prudent to cover your business against all kinds of liabilities - publicliability (third party injury or property damage) from industrial and non-industrial operations, productliability, professional indemnity, D&O liability and E&O liability. Bonsai Insurance offers a wide arrayof liability products to suit your business needs.

The following are some of the products:1. Product Liability2. Public Liability Act Only3. Workmen's' Compensation Policy4. Public Liability Insurance (Industrial Risks) Policy5. Public Liability Insurance (Non-Industrial Risks) Policy6. Product Liability Insurance Introduction

Safety and reliability of products are an important concern to consumers, sellers & manufacturers.Faulty products can be hazardous for the consumers' health & property. The manufacturer/ seller offaulty could be held liable for such damages, exposing themselves to financial losses.

Product liability insurance protects the companies exposed to above risk by financially assistingpolicyholders in such situations.

This Policy broadly covers:

1. Legal liability of the Insured towards damages to the third party arising due to faulty productsmanufactured / sold by the insured, liability with respect to:

Accidental death Bodily injury or disease Loss or damage to property Legal costs and expenses incurred with the prior consent of the Insurer and within the

limit of indemnity.

2. Depending on exposure (end users, sales territories, nature of products & turnover), the proposerhas to fix two limits of indemnity under the policy:

Any One Accident (AOA) Any One Year (AOY) AOA and AOY can be in ratio of 1:1, 1:2, and 1:3 and maximum can be 1:4. It is not

permissible to issue the policy with unlimited liability.

3. Public Liability - Industrial & Non Risks


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Plan > Insurance PlanningGeneral Insurance for Corporate > Liability Insurance

4. Legal liability of the Insured towards damages to third party with respect to: Accidental death Bodily injury or disease Loss or damage to property Legal costs and expenses incurred with the prior consent of the Insurer and within the

limit of indemnity

5. Public Liability - Act OnlyThis Policy broadly covers the Owner's statutory liability on the no-fault principle for thefollowing conditions resulting from an accident while handling any hazardous substances:

Death of or injury to any person Damage to property


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DIRECTORS' AND OFFICERS' LIABILITY INSURANCE

(For Corporates)

The Directors' and Officers' Liability Insurance [D&O] policy has been designed specifically to meet

any financial liabilities imposed upon the Directors' or Officers' in their personal capacity for anywrongful act, knowingly or unknowingly in their respective capacity under Common Law, CorporateLaw and Security Law causing financial loss to the other stakeholders of the company.

In a recent spate of litigation, a number of adverse court verdicts regarding the liability of directors andofficers of companies to various stakeholders like Employees, Creditors, and Shareholders were passedwhere the directors and officers were held personally liable for payment of compensation to the thirdparty.

This policy is necessary for directors and officers of every company if they wish to avoid potentiallitigation owing to:

1. Failure of supervision.2. Inaccuracy in statements of financial accounts.3. Lack of judgment and good faith.4. Mismanagement of funds.5. Misstatements in prospectuses.6. Allotment of shares.7. Unauthorized loans or investments.8. Failure to obtain competitive bids.9. Imprudent expansion resulting in a loss.10.Using inside information.11.Unwarranted dividend payment, salaries or compensation.12.Misleading statements filed with the stock exchange.13.Misrepresentation in acquisition agreement for the purchase of another company.14.Wrongful dismissal of an employee.15.Risks Covered

This policy covers all claims made in event of:1. Mergers, takeovers and divestment.2. Liquidation.3. Changes in control of shareholding.4. Share issues.5. Shareholder claims.6. Misdeeds of co-directors.7. Trustee accountability and responsibility.8. Customs and excise allegations.9. Administrative liabilities.10.Termination of employment.11.Disposal of old firm/ entry of new owners.12.Miscellaneous litigation.13.Compensation Offered


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Plan > Insurance PlanningGeneral Insurance for Corporate > Directors' & Officers' Liability Insurance

The extent of indemnity being severely restricted by the Companies' Act will reimburse the extent oflegal costs expended only if the Director/ Officer successfully defend the act taken against him.

Also, coverage is available on a 'claims made' basis and applies only to claims made against the Board

of Directors during the policy period, irrespective of when the wrongful act occurred.

The Cover Applies To:1. Liabilities arising from any claim made against Directors and/ or Officers of the company by

reason of any wrongful act in their respective capacity.2. Liabilities against the company where it is required to indemnify the Directors/ Officers pursuant

to common, or3. Statutory law provisions or Memorandum and Articles of Association.4. The company and its subsidiaries that are under the common control of the Directors / Officers.

Exclusions:

1. The policy will not pay for the losses arising from any claim.2. Prior and pending litigation and claims submitted under previous policies.3. Bodily injury, sickness, disease, emotional distress, death, damage or destruction of tangible

property including loss.4. Insured v/s Insured. Viz. Directors suing each other.5. Illegal personal profit and remuneration.6. Deliberate, dishonest or fraudulent acts.7. Pollution and/ or contamination.8. Insider trading.

In the increasingly litigious corporate world, directors and officers are getting more and more exposed to

variety of legal liability.

There are lots of limitations, to the extent of which a Director or an officer can always be vigilant andtake right decisions. The major constraints come from market risks, political risks or financial risks.

The D&O helps the Directors and the Company to transfer such financial risks and legal liabilities toprofessional fund managers.


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MARINE INSURANCE

(For Corporates)

A contract of marine insurance is an agreement whereby the insurer covers against losses incidental to

marine adventure. There is a marine adventure when any insurable property is exposed to maritimeperils i.e. perils consequent to navigation

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