Life insurance minimize risk of sudden death

Death of the sole earner is arising the financial risk for the family member. Suppose the Mr. .x has four members in his family, and Mr. X’s spouse and two children are totally depending on him. Mr. X monthly income is $10000 in a month but due to sudden death of the Mr. arise financial problem in front of the family member to survive, Insurance is help in this situation.

Life Insurance Company indemnifies a large sum amount to the family member which help to the family for the children education also help to survive.

Life insurance not only paid on death of the policy holder but also when the policy holder reaches a estimated age.

Insurance is the risk which insurer bear and indemnify to the policy holder or the beneficiary in case of death of the policy holder or the when the policy holder age reached as mention in the deed of the insurance.

Life insurance is not come under the category as like other insurance .As in the other insurance the insurance company paid to the policy holder actual loss arises by any loss but in life insurance there is no question arise for the actual or partial loss.

Life insurance is also contract of good faith that means the policy holder need to disclose all the heath related issue to the insurer or need to submit the medical certificate before the insurance company before apply for the life insurance.

Life insurance policy becomes void if the policy holder committed suicide, or the nominee kill the policy holder to get the policy amount.

In life insurance the policyholder is not actually the sole gainer of the risk arises ,only the family member get the advantage of the insurance policy.

Basic Step for Auto Insurance

Auto Insurance is insurance for car, two-wheeler and three wheeler the main segment is car insurance. Auto insurance is also work as a hedge tool to protect your first investment in the automobile or car .Suppose anyone buy his or her first car and it mate with accident in first ride than the owner loss all his\her investment in a day. Auto insurance is helps to hedge the auto investment by indemnify the loss arises by the accident.

Auto insurance is also indemnifying the accidental coverage to the insurer which also gives some extra advantage to the insurer.

The main coverage area under the auto insurance comes as:

1. Coverage for the loss of vehicle: Insurance Company indemnifies value of the vehicle which insured.

2. Accidental coverage to the Insurer: Auto insurance company paid accidental claim to the insurer, claim amount depend on the basis of terms and condition.

3. Coverage the loss arises to the third party: Insurance Company paid the loss to the third party arises by the accident.

Insurance company can’t fulfill the coverage on certain Scenario:

1. Violation of rules and regulation: If the car driven by the minor age and they don’t have valid license.

2. Violation of traffic rules and regulation: If the insurer drive car after taking alcohol.

3. Not disclosed all the material fact of the insured property: Suppose the insurer use the stolen car in that condition also the insurance company not indemnify the loss arises by the accident.

4. If the insurer intentionally met with accident: If the insurer intentionally met with the accident, or damage his car than the insurance company not indemnify the loss arises to the insurer.

Home Loan charges reduce by the PSU Bank

Home Loan is available with low interest rate from Public sector bank with high number of EMI incomparability to private banks.
Public back are supported by the central bank of the country therefore they are able to go into the market with low interest rate with generally more number of EMI than private banks. We are not go with its long term affect on the Economy of the country because definitely these will create some pressure on the economy and arise the fiscal deficit.
The home loan taker is the prime advantage gainer of the plan, and the govt. Employee is the main target for this loan.
Private bank are also follow these strategy in long-term to protect their existing market.
Personal home is the dream of every individual, and the bank provides the chance to materialize the dream.
To buy a home huge amount required and for an employee or middle class people ,it can’t be possible to arrange such a large some money on the primary stage of their career but the house or the property value will increases and at the middle age or at the last part of their service period if they invest their large some of total life reserve for home than its create the financial crises for the future .
Therefore home loan gives one option to pay the loan amount from the monthly salary and it’s only the 40% of the total income and only in 20 years the employee are able to pay the total amount to the bank.
When you go for the human loan than you need to check all the rules and terms of the bank before apply for the loan.

Insurance is Hedge tool to uncertain risk

Insurance is agreement between the insurance company and the insurance holder, to protect the insurance holder from uncertain risk.
Insurance is also a hedge tool to protect the interest of the people. Insurance company charges premium on the holder on monthly or yearly basis. Now a day’s all movable and immovable goods comes in the criteria of insurance. One more thing need to consider that Insurance Company compensates only the loss portion, or the percentage insured.

Some basic steps:

1] Low Premium rate: Insurance premium vary with different insurance provider, so it’s better to check the market and go for the lowest premium rate available in the market.

2] Good liquidation position: Insurance is the hedge tool to protect from uncertain financial risk, so it’s good to go with that company which has financially strong in the market; means go with the company which has good liquidity position.

3] Disclose all the material facts of the insured item : Insurance company always mention in there rules and condition documents that in some circumstances they not pay the loss to the insurance taker, so always disclose all the material facts to the insurance company to become on the safe side.

4] complain to the regulatory board in case of fraud: If the insurance company not pays the damage or delay the payment than make the complain for this to the regulatory board of that country.

5] Insurance coverage: Insurance company paid only the risk which is insured, so its make sure before take any policy that how much risk is bearable.

6]There is interest on the insured property : Insurance holder need to prove that he has the interest on the insured property and any damage of the property affect the insurance holder financially.

Precaution steps for Home Loan

Home Loans are available by nationalized and private banks more easily than before .EMI on the home loans reduce than before and the loan refund time frame increase than before.
But this one is not only beneficial from point of view of debtors but also from the point of view of banks as banks get high-income.
As the interest rate reduce in the market therefore banks concentrate more on capital return than the interest rate return.
From the debtor point of view also get the benefits of the low EMI and long period to return debt which reduce the burden on the debtor.

There are some precaution need to measure before apply for the home loans from any banks.
1. Terms and Conditions: The whole terms and condition need to check before apply for the home loan.
Check that If there is any hidden charge on the loan.

2.Check the lowest interest rate : Check the lowest interest rate available in the market normally the interest rate are more or less fix, but its differ from bank to bank .As the 1% change is also a big matter .

3. EMI Amount: Emi generally charged 40% of the net disposal income as per the rule. As the future is uncertain it’s better to reduce the EMI 15% of the disposable income ,and save the certain amount as reserve.

4. Future Plan: People generally increase their EMI amount for the future as they think there total income increases in future .It’s true that after 5 years the total income of anyone more than the present income ,but on the same time there expenditure also increases with the time ,so its better t to keep the EMI in the same formate than to increases in future.

Related Info :
Buildings and Contents Insurance : Over 50? Save money with the UK’s specialist over 50s home insurance provider.

Dollar becomes world currency and the large part of the foreign trade made in us dollar.

US dollar come into existence in the world market after the world war 2 .After the second world war most of industrial countries of Europe and Asia suffered a lot .Only the US industries has get the advantage of the huge demands of industrial goods between the second world war and after the second world war .US dollar is not become the world currency due this reason only.
Petroleum was playing the crucial role to get this advantage to the dollar.
USA is the highest energy consumer in the world after the Second World War and the 60% of the total consumption comes from import. It’s the US strategy which convinces the OPEC cartel to sell their petroleum in US dollar. Other countries need to sell their goods or sell their gold to get the dollar on the other hand US don’t need to sell their goods or to sell the gold.
US has to spent a lot to maintain the Army bases in the different part of the world ,spent a large portion of their GDP in the war ,but still the dollar value continue raising in the world there is some reason behind these .Petroleum play the main role and second one that all the OPEC countries are again deposited in the US or invest to purchase the US bonds ,these help a lot to get the US dollar a strong position in the world market.
US dollar close competitor is Euro .Euro comes in the world market after 1990.Euro is provide the new weapon to the European countries to fight against the US dollar supremacy in the world market .
US war against terror and Iraq, Iran and Middle East and Afghanistan war reduce the US influence in the Arabic countries and they are think to change their old pattern to invest in the US security market. It’s true that Euro work as competitor to the US dollar but still the US dollar is only currency used for petroleum trading.
So in near future there is very little chance that Euro get superiority over the US dollar in the Global market.

Basic criteria for valuing a financial institution

Financial Institution main business raise money from the public and lend this in the market ,Interest on the lending is the prime source of earning and the interest on deposited is the main expenditure .Now the whole ability of the management governed how the institute collect money from general public at low rate .
Basic criteria a financial analyst follow for valuing a financial institution as summed up by the CRAMEL model. In this model factors like Capital Adequacy Ratio, Resource raising ability, the quality of assets, the quality of the management, earning quality and leverage are analyzed and conclusion reached.
1.Capital Adequacy ratio: capital consist of assets, again assets divided in high risky and low risky. Risk of the assets increases with the risk of the assets.The ratio of the risk weighted assets of an Financial Institution referred to as Capital Assets Ratio.
2.Resource Raising Ability: Ability of the financial institution measures by their ability of raising fund from market at economic rate, and the fund raiser at short span of time.
3.Assets quality : when the financial institution lend their fund on that time they need to measure the riskiness of the assets .They need to check the credit worthiness of the institution where the fund invested also need to check how the fund used by the lending company and where the investment made by the lending institution.
4.Management Quality: Constitution of the Board of Director. Further the competence, technical expertise and objective of the senior management team, the management system like ALM management, portfolio and risk management and mechanism of the internal audit are also consider.
5.Earning Quality: Financial institution main source of income is the interest on the lending amount. Financial institution need to check that change in the interest rate has any affect on the income of the institution.
6.Liquidity : Liquidity of the Financial Institution effect on the business of the financial institution, keeping this in view its average borrowing tenure is always exceed the average tenure of the investment.
Under this category one may look at debt equity ratio, the interest coverage ratio, the borrowing profile and tenure of the investment.