Now Stay Fit and Get Benefits on Your Health Insurance Policy   Jun 19, 2015

June 19, 2015
Weekly Facts
Close Change %Change
S&P BSE Sensex* 27,316.17 890.87 3.37%
Re/US $ 63.73 0.25 0.39%
Gold Rs/10g 26,900.00 30.00 0.11%
Crude ($/barrel) 61.51 -3.08 -4.77%
F.D. Rates (1-Yr) 6.75% - 8.50%
Weekly changes as on June 18, 2015
*BSE Sensex as on June 19, 2015

In times when medical inflation is on a rise, the importance of health insurance cannot be undermined. God forbid, but if you are hospitalised today, medical bills can dig a huge hole in your pocket and damage your long term financial wellbeing. But if you have an optimal health insurance cover, you need not worry. The costs you incur on medical expenses will increase (as medical inflation is on a rise), but as you grow older it can be greatly reduced with the right health insurance policy with an optimal risk cover. So, there’s no plausible reason as why you should not opt for a health insurance cover.

The Insurance Regulatory and Development Authority of India (IRDA), since the last few years has taken a customer-centric approach rolling out appropriate guidelines in the direction. Even now, IRDA is planning major changes in health insurance which calls for more incentives for and a level playing field for life and non-life insurers, amongst others?

So what is IRDA mooting?
  • For health insurance policyholders, IRDA proposes to incentivise better rates once their health and fitness is monitored on a regular basis. At present, insurers aren’t pricing based on the fitness levels on account of the apprehension over lack of availability of adequate data on the same.
  • Apart from wellness incentive, the insurance companies would be able to reward customers who maintain a good level of fitness with better insurance rates.
  • Long term critical illness plans could also become more specialised with more ailments being aided and more long term products offered.
  • There could also be higher solvency requirement for group health insurance. At present, 150% solvency margin is required to be maintained by insurers at all times; which is now expected to go up to 200% for group health insurance policies, while the existing limits may remain for retail health policies.
PersonalFN is of the view that while the idea of incentivising wellness in pricing is welcome, how insurers would go about adopting the same remains to be seen in a scenario where availability of adequate data is a challenge. If this has to be implemented well, medical test will be made compulsory across age group (which is not the case at present). The proposal of increasing solvency ratio for group health insurance is virtuous, as there’s more money at stake. A high solvency ratio for group health insurance segment, means those operating in this space would have to deploy more funds.


Property prices in Maharashtra, especially in Mumbai have gone off the roof. Those who are actually looking for a house to live in with their family are finding it quite difficult…and even taking a home loan, for some, is stretching beyond means.

From 2008 to 2015, the Maharashtra Government has increased Ready Reckoner (RR) rates from 10% to 40% in the endeavour to reduce the gap between RR rate of the property and the actual market rate. But as a consequence, builders have found it difficult to turnover their inventory. Mumbai has the second-highest unsold inventory of 46 months after Delhi-National Capital Region (NCR) at 71 months according to the residential market report of Liases Foras, a real estate rating and research company.

High RR rates have also gone on to affect the redevelopment activity in some regions since it has implications on Transfer of Development Rights (TDR), fungible Floor Space Index (FSI), open space deficiency premium; amongst host of other aspects.

But now to correct the situation going forward, the Maharashtra Government may involve realty players in fixing RR rates, providing suggestion and raising objections. Therefore the present system of fixing RR rates on an ad-hoc basis may discontinue and give way to the consultative process along with possibly a better methodology to derive RR rates.

But would this bring down property prices?
PersonalFN is of the view that for property prices to reduce, builder should first turnover their inventory. Builders have just not bothered to step down on rates and turnover their inventory, which is why it has not yet translated into a meaningful correction for the real estate market. This is despite the fact that many players in the real estate sector are grappling with high stress on their balance sheets. Probably builders fear that they would lose their upper hand while dealing with prospective buyers. The Income-tax department is planning to change the tax treatment for builders who hold onto inventory to their advantage i.e. to hoard prices. If that’s implemented well, it may help in bringing down property prices.

But mere involving the realty players in fixing RR rates would not help bring down property prices nor would it introduce transparency in the system.


The global macroeconomic headwinds have brought the focus yet again on gold. Historically, whenever there has been a weakness in the dollar investors have flocked to gold as a store of value. And quite conversely, the precious yellow metal has been a less favourable choice of investment when the U.S. dollar has strengthened.

At present a fear that the Federal Reserve in the U.S. may increase policy rates, from a near zero interest rate environment, has been looming. The U.S. Federal Reserve Chairperson, Ms Janet Yellen's remarks that interest rates are likely to rise this year has made global markets jittery, but the U.S. dollar has become stronger vis-à-vis other major currencies of the world.

In anticipation of rate hike by the Federal Reserve in the U.S., commodities traders have been betting on a fall in gold prices. Traders have been shorting gold looking to make a profit, as price falls.

To know the prudent approach to invest in gold, please click here.


Soon after the Indian Meteorological Department (IMD) came out with a forecast of below average monsoon this year; speculations about higher inflation gathered pace. Also, unseasonal rain showers and extended heat wave were expected to severely push up the prices of fruits and vegetables across the country. However, actual inflation data for May 2015 shows that things didn’t turn out to be as bad as expected earlier.

Retail inflation as measured by the movement of Consumer Price Index (CPI) came in at 5.01% in May 2015 as against 8.28% recorded in May 2014; but, it is a tad higher than 4.87% registered in April 2015. Interestingly food price inflation, at 4.80% was the lowest since December 2014. It has happened only twice over last 1 year that food inflation came lower than the overall retail inflation.

To read more about this news and our views, please click here.

The Complete Guide to Public Provident Fund (PPF) - 2015 Edition

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  • Technology has been an enabler and has influenced how many us mange our daily affairs. When it comes to banking, or even ordering a pizza; many of us do it via the app on our smartphones. It has brought down the hassles for many of us, while we are all busy making a living.

    Financial advisory firm WhiteInc, is developing an app (for both iOS and Android users) that would allow you to reclaim your dormant PF account through your smartphone.

    The app is expected to be rolled out in another two to three months and is likely to help young professionals who do not have the time and expertise to claim their provident fund, according to WhiteInc. But a fee is likely to be charged for offering this service, which will be based on the amount of claim.

    According to Minister of State for Labour, Mr Bandaru Dattateya about Rs 27,000 crore is lying unclaimed in the Employees Provident Fund (EPF). PersonalFN is of the view that, with more smartphone users, an app of this nature would help in bringing down the unclaimed funds lying in EPF and Public Provident Fund (PPF).

Group Health Insurance Plan: "An insurance plan that provides healthcare coverage to a select group of people. Group health insurance plans are one of the major benefits offered by many employers. These plans are generally uniform in nature, offering the same benefits to all employees or members of the group."
(Source: Investopedia)
Quote : "A wise man should have money in his head, but not in his heart." - Jonathan Swift

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