Financial planning is the preparation of a plan considering client’s current financial situation, identifying areas of need, and planning for future life events.

Wealth management is a more encompassing approach that focuses on investment management, estate planning, asset protection, and private banking.

Here are a few things to consider prior to buying your health insurance policy:

• Coverage type – individual (covering one person), family floater (covering a family) or group (covering a group)
• Coverage amount – consider growth in medical expenses from current level
• Network hospital – make sure that your preferred hospitals are covered
• Room rent or sub-limits – this would be an in important criteria during hospitalisation, so make sure you understand the details

 

Health insurance policies generally have exclusions, including the following

• Waiting period for specific ailments and pre-existing conditions
• Non-medical expenses – including registration charges
• Non admissible causes – alcohol, drug abuse, adventure sports
• Restrictions included in policy clauses – unproven medical procedures

Coverage amount – choose coverage amount depending on your financial liabilities, number of family members and dependents, rate of inflation, standard of living. This would require financial assessment and planning. Do give this activity a fair amount of time and effort

Claim settlement ratio – the idea of term insurance is to provide financial assurance to your loved ones in case of your unfortunate demise. So high claim settlement ratio (ratio of the claims paid to the policyholders/beneficiaries/nominees by the insurance companies v/s the total claims received from the customers is of utmost importance. Get in touch with your financial advisor or check IRDAI website for details.

The following are important things to know and remember.

 

• Interest Rates

Your home loan interest rate is one of the most important considerations. Check the interest rate upfront and ask whether it is fixed rate or floating rate. In case of floating rate loans, rates would change as per benchmark rate so you are exposed to risk of interest rate movement.

Even fixed rate loans may have reset clause where the rates are reset after a pre-agreed interval. Check for reset clauses in the loan agreement

 

• Fees

Lenders charge a number of fee including processing fee, legal and technical fee, pre-payment charges etc. Ask for a schedule of charges from the lender. Many of these fee components are negotiable, so go ahead and ask for reduction or waiver

 

• Down payments

Home Loans cover upto about 80% of property value. Though the ratio may differ from lender to lender. Do understand the lender’s requirement and negotiate if you need to.