Category: Insurance

29 Mar 2021

Beginning of a new financial year – a good time to review and plan your finances

We were hoping for life to be normal again. The roll out of Covid-19 vaccines sent some relief all across the world. However, the pandemic is raising its head again in India, with the number of daily cases as well as casualties going up again. While we are hopeful that things won’t reach the stage they did last year, one can never predict completely.

Last year, same time, people were caught off-guard with no room left to plan for an uncertain short-term and medium-term future. This time however, we will not have an excuse, if things go south, god forbid, from here again.

This is also a good time to revisit your personal finances in general, and your investment portfolio in particular, as we will soon be entering a new financial year. Let us understand why.

Salary Increases

This is probably the most plausible reason to revisit your financial planning at this stage. Most large corporate organisations schedule their annual increment and appraisal cycles around this time. If you are a lucky person getting a raise, don’t just spend all of it.

If you are in the armed forces, this is the time when your annual increment has either just happened or is about to happen.

Put some thought around how you plan to use it and whether that is the best possible option. Certainly, it is important to pamper yourself by some amount of indulgence for yourself and your family. But, make sure you put the raise to good use beyond the short-term.

Annual Tax Planning

As you must be observing right now or might have observed over the past few weeks, many people end up taking hasty decisions with respect to their tax planning towards the end of the financial year.

In spite of us harping on tax planning throughout the year, we still get numerous frantic calls in last 15 days of March on what to do to save tax under section 80C!

In fact, this should ideally be a good time to effectively plan for the next financial year. Not just that, if you plan efficiently, you will notice that tax planning for tax benefits for investments and insurance needs to be done only once in most cases. Let us explain.

Suppose you decide right now that in 2021-22, you will be disciplined with your annual tax planning. You will make the purchase of must-have financial products like health insurance and term life insurance, if so required by you, right in the beginning of the financial year, or in the initial few months. Then over the next few months you can invest the remainder of your 80C investments wisely in provident fund, public provident fund, or tax-saving mutual funds, as you choose.

Next year in March, you will then be worry free, unlike many of your peers. Then, a major part of your tax-saving investments for the year 2022-23 will automatically align with your payments in the early part of the financial year. This takes away the burden of last-minute planning and removes the errors that come in with last minute execution of hasty decisions.

Portfolio Rebalancing and Medium-Term Tax Planning

People who already have an investment portfolio might find this to be a good opportunity to analyse the performance of the portfolio and make adjustments to fine-tune it. While portfolio rebalancing should not wait for the change of a financial year, this time is helpful in a different way.

Suppose you have a financial goal coming up in the next year or two. You have been planning for this goal for a few years now and have been investing the savings for the same in equity mutual funds. This is the perfect time for you to evaluate the investment vis-à-vis the goal and start moving that amount from the equity funds to either debt funds or to your savings account. The reason being that if you make the withdrawal at the last minute without planning, your gains might be taxed at a higher rate for the long-term capital gains.

Instead, if you make withdrawals every year over the next couple of years, you can plan in a way that your returns are within the permitted range of tax-free capital gains. Not just tax efficiency, this will also shield your upcoming financial goals from market volatility.

Financial planning is not just about planning, but also calls for discipline in decision making as well as in implementation of those decisions. The beginning of the financial year is a good time to start with an efficient plan. The most crucial aspect of this journey is timely rebalancing of portfolio to ensure tax-efficiency as well as to meet financial goals timely.

13 Oct 2020
Should you buy corona specific insurance policies

Should you buy Corona-specific insurance policies?

The year 2020 has been overshadowed by the Coronavirus pandemic. While there can be some things about the handling of the entire situation by the government that you can be dissatisfied about, there are some other things that are praiseworthy. One such measure has been introducing Covid-19 specific health insurance policies by the Insurance Regulatory and Development Authority of India (IRDAI).

The regulator has come out with such two policies – Corona Kavach and Corona Rakshak. Let us understand what these insurance policies are and whether you should buy one.

What is Corona Kavach?

This is an indemnity-based health insurance plan. This means that operationally, this works like any other regular health insurance policy. In case of hospitalisation and treatment, the insurance company will pay for your hospital bills either as a reimbursement to you or directly to the hospital. The amount payable by the insurance company is subject to your sum assured in the policy. As per the IRDAI guidelines, the maximum sum assured available through this policy can be Rs 5 lakh.

What is Corona Rakshak?

This is a defined benefit health insurance. This means that the insurance company will pay the entire sum assured to you, the policyholder, in case the defined event takes place. In this case, if a policyholder contracts Covid-19, s/he will get a lump sum payment from the insurance company. This is irrespective of the hospitalisation and treatment expenses. The maximum sum assured available to you under this policy would be Rs 2.5 lakh.

This is akin to some other defined benefit insurance plans like a term life insurance or a critical illness health insurance. The amount you receive in such policies as a lump sum can be used as per your need without any restrictions, and there are no questions asked if the specified event takes place.

Things you must note

These policies are short-term policies in nature. This means that, unlike regular health or life insurance plans, these policies cannot be renewed year on year. As of now, the maximum tenure for these policies allowed is less than a year, the maximum typically being 9 ½ months.

Moreover, the insurance benefit will kick in only if the policyholder is tested positive for Covid-19 and is hospitalised for at least 24 hours. In the case of Corona Rakshak, the continuous hospitalisation needs to be for at least 72 hours to be eligible for the insurance benefit.

Should you buy Corona Kavach or Corona Rakshak?

Now here comes the tricky part. Just look around for anecdotal experiences of Covid-19 patients. The bill can easily run into several lakh rupees. There have been several instances that we know of, where the bill crossed even Rs 10 lakh. The better hospital you opt for, the higher will be the bill, and we all want to avail best healthcare in such a critical situation.

Hence, in our view, the maximum sum assured under these specific policies is not sufficient. However, if someone does not have a health insurance policy at all, then getting a Corona Kavach policy as the first line of financial defence for the short term could make sense. Here too, we would advise to go for a regular health insurance policy with an adequate sum assured for yourself and your family. While ‘adequate’ varies from one person to another, with the rising cost of quality healthcare, this should be a 7-digit figure.

If you already have good health insurance, like in the case of serving officers and most of the retired officers, it may not be required unless you are not happy with the armed forces medical facilities or are inadequate in your area. However, for your other near and dear ones who do not enjoy such a benefit, you can definitely think about the Corona Kavach or Rakshak policy. Even though the sum assured is low in such policies, the amount can act as an income replacement for the hospitalisation period or till the time one recovers fully.

All said, make sure your financial plan has adequate provisioning for health and life insurance so that any setback doesn’t derail your financial life.

07 Apr 2020
Stock Advisory Services

Stock Advisory Services

Bowing to the persistent demand from faujis to start Stock Advisory services for them, We, at Hum Fauji Initiatives, have decided to foray into this. We have entered into it now since these are fabulous times to get into stocks right now – most of us do not realise that we have a massive investment life-time opportunity in front of us, though current risk and volatility may stay in the markets for longer than we anticipate.

The true investor welcomes volatility…a wildly fluctuating market means that irrationally low prices will periodically be attached to solid businesses. ~ WARREN BUFFET

He who is not courageous enough to take risks, will accomplish nothing in life. ~ MUHAMMAD ALI.

What is the Offer?

We have tied up with Mr Sandip Sabharwal, who is one of the best-known names in Indian Stock Advisory services. He is a B Tech in Chemical Engineering from the Indian Institute of Technology Delhi and did his PGDM from IIM Bangalore. He started his career with SBI Funds Management Pvt Ltd and worked for SBI Mutual Fund for the first 11 years of his career. During his tenure as Head of Equity from 2003 to 2005, the equity assets of SBI Mutual Fund grew from Rs 300 Cr to around Rs 6000 Cr. Most Equity Funds of SBIMF were top ranked in their respective categories from 2004 to 2006. He worked in JM Financial Asset Management Company Pvt Ltd and was Chief Investment Officer for Equity Funds from late 2006 till March 2009. Equity Assets of JM grew from Rs 200 Crores to Rs 5000 Crores from December 2006 to February 2008. Most key funds were top performing in the year 2007. Three were among the top 10 performing funds in the world as per Lipper. Subsequently till the middle of 2013, he headed the PMS division of Prabhudas Liladher Pvt Ltd.

He is now a SEBI registered Investment Adviser. He is regarded as one of the Best Stock pickers in the Indian Equity Markets with a proven track record of picking out multi-bagger stocks. He has a knack of predicting short-term and long-term stock market movements and has correctly predicted various market and commodity cycles. He writes expert columns on Equities, Commodities & Currencies in prominent business papers. Having worked for more than 15 years in the MF industry, Sandip has strong and sharp insights into the functioning of various industries and stocks & their valuations.

Right now, Sandip offers a large number of portfolio advisory services personally managed by him. To read more about Sandip Sabharwal, you could google him or head over to his stock advisory service at or go to his facebook or twitter handles. Hum Fauji Initiatives has forged an exclusive tie up with him for two such services at extremely lucrative rates:-

  1. With the complementary Individual Stock Advisory service given for up to Rs 2500, your actual cost of Target Bluechip Portfolio and the Target Midcap Portfolio comes down to a mere Rs 19,100 + GST and Rs 18,200 + GST for the year.
  1. In case you wish to subscribe to Sandip Sabharwal’s other stock advisory services like Power Alpha plan, Platinum Plan, Short Term Plans or Trading Plans, the same can be made available to you at similar lucrative terms and conditions.
How is this Stock Advisory Service different from the Aggressive-3 Portfolio Launched by us recently?

For all those who wish to see the Aggressive-3 Portfolio details again, please click on the link

The differences of the two portfolios are as below:-

How to go ahead?

Just reply back to us on or

  • During Lock Down Period: Ring up on our VoIP number 744 711 892 Extension 212 (Shambhavi) OR mobile number 9999 053 522 (Priya).
  • During Other Periods: Ring up on our landline 011 – 4081 4681 (30 lines) and ask for Shambhavi or Priya.

We will engage with you and take you ahead from there.

Please remember that if you are interested in these Stock Advisory services, there could not be a better time to go ahead than right now when the stock prices are at such attractive valuations. However, do not forget that:-

  • Any stock investment has its risks and even at attractive rates of stocks right now, the risk does not go away.
  • Your risk profile should be such that you can withstand the volatility of stock markets unperturbed, since the volatility may continue for a long period of time, maybe of even a few years.
  • Your own future requirements and financial goals are much more important than getting high returns. Hence, please do not put any money in stock markets which you require for your own personal use or of your family members for next 4-5 years.
  • Hum Fauji Initiatives or Sandip Sabharwal will not be accepting any responsibility for any of the recommendations not performing as anticipated during our recommendations. Please exercise your own judgement and caution while buying and trading the stocks as recommended in the above plans and advisories.