Category: Insurance

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 http://www.asksandipsabharwal.com/ 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:-

Notes: 
  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 https://bit.ly/3aXZRql.

The differences of the two portfolios are as below:-


How to go ahead?

Just reply back to us on services@humfauji.in 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.
28 Aug 2017
Is this Diamond worth your money

Is this Diamond worth your money?

Life Insurance Corporation of India (LIC) is aggressively marketing its insurance policy, LIC Bima Diamond Plan, as a ‘Diamond for Life’. Let’s see if this ‘Diamond’ is worth your money?

LIC Bima Diamond Plan is a typical non-linked, with-profit, limited premium payment money-back life insurance plan. Non-linked means it is not ULIP or your money will not be linked to equity market movements. With-profit means, it is like investment product where you get returns on your investment based on the product feature. Money back means at a different interval of the policy term, you will receive some money from this policy.

Highlights of the policy

  1. It is a fixed tenure insurance policy. There are three tenure options – 16 years, 20 years and 24 years.
  2. The premium paying term is less than the tenure of the policy e. g. for a 16-year policy you have to pay only for 12 years.Money-Back (Survival Benefits)every 4th year.
  3. The premium rate of LIC Bima Diamond is one of the highest.
  4. It gives life cover even aftermaturity of the policy. It gives extra protection up to half of the policy tenure additionally. For example, for a 16-year policy, you would get life cover till 24 years. However, during the period of this extended protection, the sum assured would be half of the original amount.
  5. It gives life cover even after you stop paying the premium (called Auto Cover). This relaxation is up to two years.
  6. Itvdoes not give annual reversionary bonus. You would get loyalty addition after a certain tenure.
  7. This plan hasa loan facility.
  8. You can take accident & disability rider and new Term Assurance Rider.
  9. The maximum sum assured is Rs 5 lakhs, minimum 1 Lakh and entry age is minimum 14 years completed.

Positives of Bima Diamond Plan

  • It gives life cover even in case of non-payment of premium for up to 2 years. This feature does not leave you vulnerable at the time of financial distress.
  • The death cover continues beyond the policy maturity and can keep you insured till the age of 76 years.
  • You can add term assurance and accident rider to enhance your death cover.
  • You can avail loan from this policy for up to 80-90% of surrender value.

Negatives of Bima Diamond Plan

  • The premium rate is too high. For a sum assured of Rs 5 lakhs, the premium is up to Rs 46,000 per year.
  • Maximum sum assured is Rs 5 lakhs. This amount is exceedingly low for a normal middle-class family.
  • Though touted as a benefit, the sum assured gets halved in extended protection period which is grossly insufficient for a family after 20 years.
  • The maturity benefit would be very low as it pays the basic sum assured less the periodic money back payment already done. Thus if the sum assured for a 20-year policy is Rs 5 lakhs, the maturity sum assured would be only Rs 2 lakhs.
  • The returns from LIC Bima Diamond is less than the market rate. LIC is still giving 5-6% return. One would be in a better position by opting VPF and PPF for saving purpose.
  • Auto Coveris highlighted as a unique benefit but in case of death during this period, the due premium is deducted from the benefit payable. So it seems the idea is to run the policy as much as possible instead of showing in their books as LAPSED policies.
  • At maturity you are eligible for Maturity Sum Assured, which is 55% to 40% of Basic Sum Assured and Loyalty Addition. Hence, do notthink that the maturity benefit will be full sum assured as is the case with other plans.
  • Extended cover is showcased as a unique benefit. But, head-to-head, LIC’s New Jeevan Anand seems to be better in this aspect as offers the extended cover forever and full to the value of sum assured. In this plan, it is only up tohalf of policy term and half of sum assured.

Final Verdict

Any Endowment insurance plan of LIC is primarily an investment product, wherein you actually neither get good insurance cover nor satisfactory investment returns. It is sold as a good combination of protection and returns while all endowment insurance policies of all insurance companies fail on both the counts. In fact, the problem is mixing insurance with investment. Such a combo product never benefits the investor but only the insurance companies and the agents since the premiums are high, commissions are high and when time you discover this after taking the policy, you realise it has been structured in such a way that you can exit only at prohibitive costs (losses) to you.

Hence, we would recommend you to consider only a good term insurance plan for death cover, if you do need such a cover. For tax saving purpose, choose Equity Linked Saving Schemes (ELSS) or PPF/DSOPF. For investments, nothing better than a good portfolio of mutual funds.

For more information, feel free to reach us on, contactus@humfauji.in or call + 011 – 4240 2032, 40545977, 49036836 or

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