Wednesday, November 23, 2011

Tintin - The Movie

If you are a fan of Tintin (and who isn't?), just go and see the movie. Period.

Just like any other boy, I was a fan of Tintin during my school as well as college days. I am still a fan. I still remember that when I had my sacred thread ceremony in 1992, I got some cash presents and my first instinct was to buy a Tintin book and a Sony Walkman. And in 1992, a Tintin book cost Rs 80. That was a lot for us then. All the others were read by borrowing from the library or friends who were gracious enough to lend their copy. Just checked the price of the set now and it costs Rs 6545 on flipkart. A lot still!! And Tintin is something that you love reading again and again though you know what would happen by heart. The illustrations form the magic of the book and one of the reasons the movie is so good is because of the fact that those colors and the background just come out of the book. The movie feels so close to the book. Steven Spielberg deserves a lot of credit for keeping the core of the book intact. The motion capture technology that was used in the movie really makes the movie come to life and you can really feel as if you are reading the book itself.

The other aspect of the movie is the 3D format, which is simply amazing. If you have seen Harry Potter in 3D and then you watch Tintin in 3D then you can feel the difference. It just feels so real and makes the experience much more intense. But I am sure the 2D format would be more than enjoyable as well.

The other aspect is that the filmmakers have tried not to alter the story too much and have stuck to the original script. That is not something that you can say about other adaptations - like the second part of Harry Potter 7. Since HP 7 was so huge, the filmmakers really has a tough time to fill in everything and a die hard HP fan might be disappointed with the movie. I definitely was.

And last but not the least is the fact that you identify very well with the characters. They just come to life. The best of them is Captain Haddock. He is simply hilarious. Tintin is not bad either but I feel that the Captain just steals the show. Of course, we also have Thompson and Thomson!

The movie just drives you back to your childhood days and you will have a smile plastered on you face throughout. So, do not miss this. Go and have the adventure. And watch it in 3D - makes the experience that much better!          

Monday, November 14, 2011

My views on "Revolution 2020"

I just completed reading the latest offering from Chetan Bhagat. And I have mixed feelings. The book on a whole is written in simple English, is well paced and has a gripping story. I was hooked to it most of the time, though, at points, the story was a bit of a drag. And the best part is, it would remind you of the good old school and college days when you were preparing for the IIT-JEE. The slogging that you did and the grief that you went through when you did not do well.

It would also remind you of the good times that you spent in school and college with your girlfriend. The times when you two went to the parks and spent endless hours gossiping. It will remind you of the fights that you had and the sleepless nights you spent after the fight.

It will also remind you about the tensions with your best friend and remind you of how you felt when he did well and you did not. 

To his credit, Chetan Bhagat knows what the Indian youth feels and writes about that. He knows the pulse of his audience and known well what sells.

Having said all these, there are some aspects on which I feel Bhagat could have put in some more work. Throughout the book, Gopal is the narrator of the story and the picture that we form about Raghav and Aarti (his two other friends - the trio form the main characters of the book) is through the eyes of Gopal. We never come to know what Raghav and Aarti are actually thinking. We also do not know the thoughts behind their actions. And this is specially true in the case of Aarti and to a lesser extent in the case of Raghav. I don't want to spoil your fun by describing the exact instances - you will surely understand what I am talking about.

Also, the climax is not really fitting. Gopal suddenly has a big change of heart - he does something that is diametrically opposite of what he is actually. I feel Bhagat should have put in some more thought on the climax to make it more realistic.

Finally, my view is that the book should be read - at least once. Though "Five Point Someone" is still be my favorite as far as Bhagat's novels are concerned, I liked reading this one as well. Maybe, if Bhagat still continued with his Investment Banking profession and did the writing part-time, we would have got the quality of "Five Point Someone" in his other books as well!!

Sunday, November 6, 2011

Savings Bank Interest Rate Deregulation

Last week, the full page advertisement of Kotak Mahindra Bank in the front page of The Times of India would have caught the attention of many of us. RBI, in a key move, deregulated the savings bank interest rate. Simple speaking, the bank can offer a rate of their choice for the savings account. Previously, the rate was fixed at 4% i.e. all the banks offered a uniform rate of 4%.

Yes Bank and Kotak Mahindra Bank have fired the first salvo by offering an interest rate of 6%. Other banks might follow.

So, the question is, should you transfer your account to a bank offering a higher interest rate?

First, let's do a simple calculation. For the sake of simplicity, suppose you have 1 Lac in your savings account throughout the year. So, at 4%, you would be getting an interest of Rs 4000, while at 6% you would be getting an interest of Rs 6000. So, the difference is Rs 2000. That's the gain that you make by shifting the account. Any loss then? Nothing monetary, but you might think of the following hassles:

If your primary savings account is a few years old then there are a lot of things associated with it:
(a) You salary gets deposited to it every month: You will have to inform your employer to make the deposit in the new account. Now, your employee might not have a direct dealing with your new bank. So that's a problem.
(b) Your ECS payments for loans and bills would be liked with your primary account. Home Loan, Car Loan, Mobile Bill, Electricity Bill, Landline Bill, Credit Card Bill and what not. So you will have to run around a bit to get all these shifted and linked again to your new account. Not a difficult task but quite a time consuming one!
(c) If your demat account is linked with your primary account, then you need to check whether your demat account provider has a linkup with the bank where your new account will be. If yes, that's good. If no, then you would need to maintain both the savings accounts or close your demat account and open a new demat account associated with your new savings account - Don't even think about this - Shifting a demat account is a very time consuming and is a big headache!
(d) Moreover, you are accustomed to your old bank and making a change is never easy - no matter how good the facilities are. You have to learn and get used to new things.
(e) If you have some post dated cheques issued, then you would have to cancel them or maintain money in your old account to service those cheques. That means maintaining one addition account - again remembering some more things and tracking them!!
(f) Getting a personal loan or a new credit card from your old bank would be much easier than getting one from the new bank. Though banks these days go by your credit score, but a few years financial record (hopefully good and not bad!!) with the bank always helps

So, if it seems that changing the account would not be useful enough, what can you do to derive more from your present account? Go for a sweep in/sweep out facility. Most of the banks provide these. So, when your money in the savings account crosses a particular limit, that excess money is transferred to kind of a fixed deposit. But the advantage is that this kind of a fixed deposit is that you can withdraw that money any time. So not only are you making more (by way of interest) from the excess cash but you also have the liquidity in case of an emergency. See advantages of a Sweep-In facility here.

Think about all these before making your choice!

I believe we would hear a lot more regarding this deregulation. Things are just hotting up. Some say that customers with more money in their account (say more than 1 Lac) could be offered a higher interest rate. Others even say that there could be a downward revision of rates - though that seems to be unlikely. Many say that banks with a large pie of funds in their savings deposits might not do any change at all. So, let's wait and watch! 

Sunday, October 30, 2011

Things to check while buying Health Insurance

All of us, especially those working in the private sector, should have some form of health insurance. Though most of the companies provide health insurance, it is also a good idea to have  a separate insurance that covers yourself and your family. This could come in handy in the event while you are changing jobs or the company health insurance is restructured and some benefits are curtailed.

The primary things that we obviously look at while buying Health Insurance are:
1. Total Insured Amount
2. Cost of Insurance
3. Whether it is a Individual Policy or a Family Floater
4. The Hospitals covered by the policy where the Cashless Facility is provided

But, there are some other things that we should also look at as well. Else, they could spring a surprise later while you are making a claim. These are:

1. Exclusions: These are the host of exclusions or ailments which will not be covered under the cashless or reimbursement plans. A common example is HIV/AIDS. 

Also, pre-existing cases are not covered from the start of the policy. They are generally covered after a 3 or 4 year waiting period. In some cases, pre-existing diseases are not covered at all and are included as a permanent exclusion. A common example is Bronchial Asthma.

Other common exclusions would be weight loss treatment, cosmetic treatment, infertility treatment, artificial limbs, non-allopathic (e.g. homeopathic) treatment.

Such exclusions will always be there in every policy. However, the important thing is to know these beforehand so that you are not caught unawares later.

2. Loading: If you happen to make a claim on your policy, you may be liable to pay an extra amount or, loading, on your next premium. Which means that your premium could increase if you make a claim. 

Surprised? Well, this is quite common and I am not even sure that you can do anything about it.

So, while buying the insurance, ask whether there is loading. It's better to know now than getting a shock later.

Also, do read the fine print. I have heard of cases where the agents were ignorant or mislead the customer and they found out of such cases later.

If you want to know more about loading, read here.

3. Sub-limits: Some insurers have introduced sub-limits on specific parts of the bill. So, the amount you can claim on these parts are capped, irrespective of the amount of sum insured.

Sub-limits could be imposed on daily room charges, Doctor's fees, OT charges etc. So, your policy could specify that the room rental cannot exceed Rs 5000 per day. In cases where the room rent is (say) Rs 7000 per day, then you will have to pay Rs 2000 out of your own pocket. Even if your policy has a coverage of 3 Lacs and you make a claim of only 1 Lac, then also this Rs 2000 goes from your pocket.

Sub-limits can also be imposed on specific procedures like cataract operations or knee replacement surgeries.

So, beware of such sub-limits and know them beforehand.

There is one advantage of sub-limits. In some cases, if you opt for sub-limits, the cost of your premium could be slightly lower.

4. Co-Pay: In case a co-pay clause is present, you might have to share some part of the expenses - no matter what the amount covered is.

So, if there is a co-pay clause of 10%, your sum insured is 3 Lac and you make a claim of 1 Lac, then you will have to pay 10% of 1 Lac i.e. Rs 10,000 out of your own pocket.

This clause is sometimes levied in case of pre-existing diseases or in case of senior citizens. This clause is also present in group insurance policies (policies that are provided by your employee).

Ask your agent if such a clause exists and in what cases. Also read the fine print to be doubly sure.

5. Renewal Age: Simply put, this is the age up to which you are allowed to renew your insurance. Beyond that age, the insurance company will not provide you with insurance.

With the rising cost of medical care, senior citizens would find this clause as a very big drawback. Most insurers provide coverage till the age of 70 or 80 years.

But there is a change coming. Some insurers have started offering policies where there is no age limit. Try to opt for such policies. The premium in the later years would be quite high in such cases, but it would still be beneficial to cover yourself. Since you will have an estimate of the premium beforehand, you can plan the retirement years in advance and cater to the health insurance premium as well.

So, ask your agent about the renewal age.

6. Maternity and New Born Baby Coverage: Some insurance policies do not cover any maternity expenses. There are other policies however where the maternity expenses are covered after the 3rd or the 4th year of the policy. But there would be a limit on the amount that is provided as a maternity coverage. 

Ask your agent about the maternity benefits, the year from when it is covered and the limit.

The coverage of the new born baby is also something that you should know about. In some cases, the new born baby is covered from the third month of birth. There could be policies where the new born is covered from Day 1. Just ask - its better to know beforehand.

So, next time you go to buy a Health Insurance, keep these in mind. These can go a long way in avoiding nasty surprises later.

This is in no way an exhaustive list. Please do comment if these are some more things that we should keep in mind.

Last but no the least, stay healthy!!

Tuesday, October 25, 2011

Booking Train Tickets Online

Recently I had to book train tickets for one of my relatives. Naturally, I went to the IRCTC website first. But that day the IRCTC website was quite slow. It took me a couple of minutes just to log in into the website and then the list of station would not show up in the drop down menu. I got pretty frustrated and decided to use the MakeMyTrip for booking the ticket. 

It was a breeze using the MakeMyTrip website. The User Interface is much better designed than IRCTC. And the best thing is that even though you are booking for a particular date and a particular class of travel, you can view the availability for other classes as well as the availability for adjacent dates. While in IRCTC, you can only check the availability in adjacent dates in the same search - you cannot view the status for other classes.  

Once you make your choice, you have to fill in the passenger details and make the payment. The ticket will be emailed to you immediately. You can also take a print then and there after the booking process has completed or email the ticket to some other person of your choice. Overall, a very good experience and fast experience.

However, MMT will charge you Rs 20 as a service fee. But, I felt that it is worth trying out. Give it a shot and you will find it a much better experience than IRCTC.

Wednesday, October 19, 2011

Home Loan Insurance

We Indians are buying homes like never before. The real estate market is booming. With the rise in income, even people who do not come from a strong financial background (meaning, they do not have substantial ancestral assets) can dream of possessing a good home. But for them a home loan is the way to go.

With this home loan comes the burden of EMI's which can stretch for many years. A large part of the monthly household income goes out in paying these EMI's. In the cases where both husband and wife are working, they can pool together their income to go for a bigger home (which entails a larger EMI).

In such situations, the untimely demise of the earning member can cause grave financial difficulties to the other family members. With a large loan burden, income has to be generated from some other source to service the EMI's regularly (a very tough job indeed) or the home has to be sold (a very difficult situation - not only has the family lost a near and dear one but they now have to shift to some other place as well. To arrange all these can be hugely difficult)

Though the loss of a family member can never be fulfilled, but the burden of the  home loan can be eliminated by taking a Home Loan Insurance. The Housing Finance companies, who provide the home loan, also sell these insurance policies in addition. 

How it works

In simple terms, in case of the demise of the person who is paying the EMI's, the insurance policy will pay off the remaining principal amount of the home loan. So the loan will be fully paid off and there would be no burden on the remaining family members.

Cost of Home Loan Insurance

For a 40 Lac loan with a tenure of 20 years, HDFC offers the Home Loan Insurance for approximately between Rs 9000 and Rs 10,000 for a 30 year male. [This was in August 2010] So, in addition to your monthly EMI's, you will also have to pay this amount extra every year.

What you get

In case of the demise of the person who took the loan, the remaining principal amount is paid off by the Insurance and the family members do not have to take the burden of the EMI's. Suppose the remaining principal is 25L. Then this amount of 25L will be paid off by the Insurance.

The Process to get the Insurance

The process is very simple. Once you get the loan approval, you can talk to the housing finance company and a agent will guide you. Just give him the cheque and a few documents - age proof, identification proof, income proof and you are done. No medical tests.

But is there a better alternative to this?

Yes, there is. Go for a online Term Insurance of the same amount as the loan. 

The Benefits

It will cost you around 20% lesser.But the better part is that the nominee will get the full amount back in case of a eventuality. If you took a 40 Lac insurance, the nominee gets 40 Lacs. If the principal outstanding is 25 Lac, then the nominee can keep 15 lac for herself after paying off the 25 Lac outstanding principal of the loan. 

But in a home loan insurance, only the loan amount is paid off. The dependents do not get anything.

Read more about online Term Insurance here.

The Process

It takes some more time and patience to get a online term insurance as compared to a home loan insurance, but it is worth it. The benefits far outweigh the effort that it takes.

In conclusion, do take a home loan protection insurance along with your home loan. Also, do think about a online term insurance instead of a pure home loan insurance when you get your dream home!! It will give you some peace of mind!!

Tuesday, October 18, 2011

Buy Life Insurance Online!!

No, this is not another advertisement to sell you a life insurance policy.

This is my experience of buying a Term Life Insurance Policy online for myself and my wife.

Why the need?

The need for a policy arose after we bought a flat and took a home loan for it. The insurance was a cover if something happened to either of us (me or wife) during the tenure of the loan. This, I believe, is a very practical thing to do. In case of any eventuality, you would not want your near and dear ones to lose the place where they were living or make it difficult to make ends meet trying to repay the loan [when the income has reduced significantly].

The options

The housing finance company from where we took the loan has they own "Home Loan Protection Policy" as well - this was the one that we evaluated first. 

Based on the comparison with a Pure Term Insurance, I found that the Term Insurance was better [I will cover the comparison between a "Home Loan Protection Policy" and a "Term Insurance" in a later post]

The Insurance Options

This was in 2010 and online term insurance was at a very nascent stage. If I remember correctly, only 2 or 3 insurance companies were offering those. I did a comparison between ICICI Prudential (iProtect) and Aegon Religare (iTerm). Though the premium was slightly less for Aegon Religare, I still opted for the ICICI Prudential policy since Aegon Religare's rejection ratio was on a higher side. Also ICICI Prudential was a better established player with more experience in India.

The Process

Well the process is simple, isn't it? That is what the insurance companies would like you to believe. You just decide the sum and tenure, fill in some details and make the payment. That's it. Well the actual process starts after that!!!

So, this is what happens:

1. You go to the website and fill in the sum insured, the tenure of insurance and generally your age and whether you are a tobacco user. On filling these, you get the premium. Once you are OK with the premium, you go to the next step.

2. You fill in a lot of details about yourself - name, address, policies that you already have and their sum insured, your health details etc.

3. Once all these are done, you make the payment and that's it! NO! This is only the proposal that you have filled up.

4. After this you are supposed to submit hard copies of you identify proof, age proof etc to a person from the insurance company. Depending on your luck, that person could come within the next few days or you might have to make a few calls to make that happen.

5. Also, if the sum insured is above a certain limit (it is 25 Lacs for ICICI Prudential) then you will have to undergo a medical test. It basically consists of some blood tests, blood pressure measurement and an ECG. ICICI prudential will provide all the details and you have the option of going to a medical center or the team will come to your house. That's the good part. But co-ordinating all these and getting it all done will take 1 or 2 weeks.

6. After a wait of 1/2 weeks the medical results are out and if all is in order then the policy will be mailed to you. But it is better to follow up with them regularly and things will move a little faster.

So, if all goes well you will have a policy in your hands after 5 to 6 weeks of making the actual payment. Cool!!

So, if you want to save 20% to 30% on the premium every year are ready to do some (actually all) of the work yourself (the work that is usually done by the agent), then go for it. The pain is in getting it done, after that it's hassle free.

Deviation in the process

In case you have some medical condition found during the medical test or if you have declared some medical condition while filling the health declaration, then the insurance company might increase your premium. In such cases, they will first send a questionnaire where you have to fill in the details of your condition and based on this they might increase your premium (I am not sure whether they can deny coverage altogether or not - most probably they can). They you will have to go and pay that premium in the nearest ICICI Prudential office - there is no way to paying this online (at least there was no way when we took the policy in 2010). Once you have made the payment, you should call them up so that the process can be expedited. In this case, it could take some more time for the actual policy to come.

Well, that in short (or not too short!!) was something about buying a term insurance online. Please do let me know if you have any queries. I would be glad to answer if I know the answer!!