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LIFE INSURANCE
BEST TAX SAVING INVESTMENT OPTION IS HERE!
INVEST 5 LAC P.A & MORE IN YOUR FAVOURITELIFE INSURANCE PLANS OFFERING GUARANTEED RETURNS UPTO 7.23% P.A FOR THE NEXT 40 YEARS
How are Investors Impacted by Tax? Various investment option for investor are no longer tax efficient.
Introducing a revolutionary solution in the realm of investments: a game-changer that defies the limitations imposed by post tax returns. In a landscape where investment avenues often lose their allure due to taxation, we are proud to present a groundbreaking plan that promises tax-free maturity returns of up to ?1 crore. Premium available until 31st March 2024.
Imagine the freedom to grow your wealth without the burden of taxes diminishing your gains. With this innovative product, we are redefining the concept of financial growth and empowering investors to truly maximize their potential. It’s time to embark on a journey where your investments not only flourish but also provide a secure and tax-free future.
Presenting MAX Life Smart Wealth Advantage Growth Elite Wealth for Milestones - a game-changing solution that guarantees tax-free maturity above a premium of ?5 lakh.
Key Benefits of MAX Life SWAG Elite
LET’S CHECK OUT HOW THE PLAN WORKS SCENARIOS TO OPT FROM
Scenario 1- “Unlock the Power of Tax-Free Maturity through Return of Premium & Smart Loan Facility options"
How the Plan Works- Shyam, a 35 years old businessman, wants to invest in a policy wherein he gets tax-free maturity. He invests a sum of ?10 Lac for 10 years in the MAX Swag Elite Plan. At the end of the 25th year, he gets a tax-free guaranteed maturity of ?3.37 crores.
In the above-given scenario, Shyam opts for a return of premium of 1 crore on the 25th year, ensuring it’s 100% taxfree as there are no gains involved. He then secures a loan against the remaining 2.5 crores, granted by Max Life for 95% of its value, amounting to 2.37 crores, also tax-free as liability is always tax-free. As the death benefit is available for life, the loan will be settled with the accrual amount eventually.
You might be wondering about the mechanics behind how this scenario 1 of accrual and loan process operates. Let’s delve into a few examples to elucidate the workings of the Plan
In case of the death of the policyholder at the 5th milestone, the nominee would receive the death benefit, and adjustments would be made to the accrual and loan accounts, with the difference being paid out
Scenario 2- Take your premiums back, leave a tax free legacy for your loved ones
How the Plan Works- Ram, a 40-year-old Bank Manager, is planning for his legacy, making sure his kids have a future without worries. He decides to purchase the MAX Swag Elite Plan, wherein he invests a sum of ?10 Lacs p.a. for 10 years.
Picture abhi baaki hai mere dost- Introducing the pinnacle of all features: the Policy Continuance Benefit, where the policy transcends into an unparalleled realm of benefits for the client. Now, let’s delve into the extraordinary and truly remarkable unique feature.
*PCB- Policy Continuance Benefit
DB- Death Benefit
PPT- Premium Payment Term
SA- Sum Assured
WOP- Waiver of Premium
ADD- Accidental Death & Disability
CIDR- Critical Illness Rider
“In conclusion, the MAX Life SWAG Elite Plan offers a compelling blend of tax-free maturity, legacy planning, and customizable benefits, empowering individuals to secure their financial future with confidence and peace of mind”
GENERAL INSURANCE
Have you ever thought about a health insurance plan that locks in your premium basis your entry age? Or doesn’t let you run out of sum insured, ever? Or even helps you carry forward your leftover sum insured to the next year? Sounds impossible? Not anymore. Introducing ReAssure 2.0, a first-of-its kind health insurance policy that allows you to turn the impossible into possible. The plan is packed with many industry-first features so that you can truly get complete peace of mind.
1. SAVE WHILE YOU STAY PROTECTED, AS YOU AGE
Pay the premium which is applicable as per the age at which you purchase the policy and not your current age. This will continue until a claim is made. This means that if you purchase the policy at 25 years old, and you do not make any claim until you are 55 years old, then, you will only be paying the premium which applies to a 25-year-old every year, until you claim at 55 years old age. The premiums will return to the normal premium cycle only after the first claim is made.
2. NEVER RUN OUT OF YOUR SUM INSURED, EVER
The first claim will trigger the ReAssure+ benefit forever. It is unlimited. Each claim will be up to the base sum insured. It can be used by the same person for the same illness. After you claim, you get the double sum insured from day 1 of the next year. This means that if you have purchased a policy with 10 lakhs of base sum insured and you make a claim of 2 lakhs that year, then the ReAssure+ benefit will be triggered and you will get up to 10 lakhs of the sum insured, which will be over and above the balance of 8 lakhs of base sum insured. This ReAssure+ benefit will remain forever, as many times as you claim. And next year, you will get 20 lakhs of the sum insured from day 1.
3. DON’T LOSE WHAT YOU DON’T USE
Don’t let go of the sum insured for which you have already paid for. Our first-in-industry benefit enables you to carry forward the leftover sum insured to the next policy year upon renewal. This way, your sum insured will keep accumulating with each renewal up to 10x of your base sum insured.
This means that if you have purchased a policy with 10 lakhs of base sum insured and you do not make any claim that year, then your sum insured is not wasted. It is carried forward to the next year and you get 20 lakhs of the sum insured from day 1 itself. This sum insured will continue to carry forward up to 10x of the base sum insured i.e. until it becomes 1.1 crores in this case. Even if you make a claim, the leftover sum insured is carried forward.
WIN-WIN FOR YOU IN ALL SITUATIONS
Designed to help you benefit beyond hospitalisation
Designed to help you benefit at the time of hospitalisation
Safeguard+: Coverage for Non-payable items as per the list I, II, III, IV of Annexure I and no impact on Booster+ for less than INR 1,00,000 claim.
Safeguard: Coverage for Non-payable items as per the list I of Annexure I and no impact on Booster+ for less than INR 50,000 claim.
PRODUCT BENEFIT TABLE
(All Limit In INR unless defined as Percentage)
HOW MUCH DOES IT COST?
Note: All premiums shown are for Titanium+ 1 year policy with SI 20 Lacs. These are inclusive of GST & in INR. Annual & Monthly Premium Mode Available
FIXED INCOME
In a highly anticipated development, Bloomberg has disclosed its decision to incorporate Indian bonds into its Emerging Market indices starting January 31, 2025. This move follows the recommendation of the Bloomberg Index Services advisory committee to include Indian government bonds in its Emerging Market Local Currency Index in mid-February.
Discussions regarding the addition of Indian bonds to the Bloomberg Emerging Market (EM) index have been circulating since JPMorgan Chase & Co announced its incorporation into its benchmark in September of the previous year.
The prospective inclusion in both the Bloomberg EM index and the JPMorgan EM index is expected to trigger a surge in foreign capital inflows into the country. What repercussions will this influx have on India’s macroeconomic indicators and diverse asset classes? To comprehend this impact, let’s analyze the situation step by step.
HOW WILL THE INCLUSION IMPACT FOREIGN INFLOWS?
The incorporation of Indian bonds into the Bloomberg Bond Index is poised to boost the influx of foreign capital into the Indian bond market. The mechanism behind this lies in the nature of index funds, which operate as passive investment vehicles. These funds, mirroring a specific index, replicate its composition by holding securities in the same proportion as dictated by the index provider.
In the context of the bond market, just as when a stock joins an index, index funds adjust their portfolios accordingly, and in this case, all index funds tracking the Bloomberg Bond Index will make adjustments to accommodate Indian sovereign bonds. This implies the purchase of Indian government securities, directing funds into the Indian treasury bond market.
Currently, the cumulative assets under management for index funds following the Bloomberg Bond Index amount to approximately $3 trillion. With India expected to hold a 0.6-0.8 percent index weight, an estimated $10-15 billion is likely to flow into Indian treasuries, as highlighted by IDFC First Bank.
Beyond these passive flows, there is the potential for additional investments from actively managed funds. Unlike passive funds, active funds, benchmarked against an index, do not replicate it precisely. Fund managers have the flexibility to adjust their portfolios, possibly going underweight or overweight on certain securities, including Indian treasuries in this instance. While managers may not entirely avoid a security present in the index, their decisions will be influenced by their bullish or bearish outlook on specific securities relative to others in the index.
WILL IT FACILITATE EASIER ACCESS TO GLOBAL CAPITAL OR LOWER THE COST OF FUNDS?
The inclusion of a country’s bonds in prominent global indices tends to simplify access to global capital and may lead to a reduction in the cost of funds. As these newly included bonds become part of widely tracked indices, investors seeking portfolio diversification are likely to be drawn to these additions. Moreover, such inclusions serve as a confidence building measure for global investors who align their portfolios with these benchmark indices.
The infusion of additional funds resulting from this increased investor interest can contribute to capping treasury yields. This means that even in scenarios of substantial local credit demand or increased government borrowing, there might not be significant upward pressure on yields. The inclusion in global indices can act as a stabilizing factor, potentially curbing the rise in yields and enhancing the overall attractiveness of the country’s bonds to investors.
However, the enhanced visibility achieved through index inclusion alone may not necessarily facilitate easier access to global capital for corporate borrowers in a country, nor automatically lead to a reduction in their borrowing costs. A pivotal factor for such benefits would be a ratings upgrade for the country. Such an upgrade holds the potential to benefit all companies within the country, as it enhances their perceived creditworthiness.
A ratings upgrade signifies an improvement in the country’s overall economic and financial stability, making it more attractive to global investors. This, in turn, can create a favorable environment for corporate entities seeking international capital. The improved credit standing can instill greater confidence among lenders, potentially resulting in reduced borrowing costs for companies within the upgraded country. In essence, while index inclusion provides visibility, a concurrent ratings upgrade is crucial for unlocking the broader advantages of easier access to global capital and cost-effective borrowing for corporate entities.
HOW WILL IT IMPACT THE INDIAN RUPEE?
Typically, an increase in foreign fund inflows is viewed positively for the Indian rupee. With India’s inclusion in the index, foreign investors seeking alignment with the new weightage specified by the bond index will need to convert their local currency or dollars into rupees, leading to an uptick in demand for the Indian currency.
However, the anticipated surge in foreign inflows, totaling between $30 billion and $45 billion (comprising $10 billion to $15 billion from potential inclusion in Bloomberg’s bond index and $20 billion to $25 billion from JP Morgan’s bond inclusion) throughout FY25, may present a situation of abundance for India. If an excess of dollars enters the country and leads to rupee appreciation, it could pose challenges. A stronger rupee makes imports more expensive, potentially causing inflationary pressures in the economy. Thus, while the influx of foreign funds is generally positive, managing the balance to prevent an undue appreciation of the rupee becomes a critical consideration for India.
Indeed, forex experts do not view this challenge as insurmountable. Historically, the central bank has demonstrated its ability to manage the rupee within a targeted range by engaging in buying or selling of dollars in the open market. This intervention allows for a controlled approach to prevent excessive appreciation or depreciation of the currency.
Furthermore, any potential outflows triggered by foreign investors in response to a stronger rupee might be balanced by the anticipated new fund inflows. This equilibrium could help mitigate concerns about the currency’s excessive strengthening.
Currently, market participants do not appear overly concerned about a potential surge in the rupee. The prevailing sentiment suggests a level of confidence that the central bank’s interventions, coupled with the anticipated foreign inflows, may effectively address and balance the currency dynamics.
SO IN SHORT THE INCLUSION IN THIS WIDELY TRACKED INDEX CAN HAVE SEVERAL EFFECTS:
1. Increased Visibility and Access: Inclusion in the Bloomberg Bond Index elevates the visibility of Indian bonds on the global stage. This heightened visibility can attract the attention of a broader array of international investors, providing them with easier access to the Indian bond market.
2. Foreign Investment Inflows: As a result of index inclusion, foreign investors who track or replicate the Bloomberg Bond Index will likely allocate funds to Indian bonds. This influx of foreign capital can contribute to the depth and liquidity of the Indian bond market.
3. Currency Impact: Foreign investors, in order to invest in Indian bonds, will need to convert their currencies into Indian rupees. This increased demand for the rupee can influence its exchange rate. Generally, a rise in foreign fund inflows is seen as positive for the local currency.
4. Market Confidence: Inclusion in a prestigious global index like Bloomberg Bond Index can enhance market confidence. It signals to international investors that Indian bonds meet certain criteria and standards, potentially boosting overall investor confidence in the country’s financial markets.
5. Interest Rate Dynamics: The additional foreign investment may have an impact on local interest rates. Depending on the magnitude of the inflows, it could influence the demand and supply dynamics in the bond market, potentially affecting interest rates in the country.
6. Diversification for Investors: Inclusion in global indices offers international investors a chance to diversify their portfolios. As they seek opportunities in emerging markets, Indian bonds being part of a major index could become an attractive option for investors looking for a balanced and diversified investment strategy.
7. Potential for Ratings Upgrades: While not guaranteed, index inclusion can be a positive factor for credit rating agencies when evaluating a country’s creditworthiness. This could potentially pave the way for ratings upgrades, making the country more appealing to a broader spectrum of investors.
In summary, being part of the Bloomberg Bond Index signifies a recognition of the Indian bond market on the global stage, potentially leading to increased foreign investment, improved market confidence, and a variety of impacts on currency and interest rate dynamics.
MUTUAL FUNDS
WHAT IS A FOCUSED FUND?
Focused funds are a category of mutual fund investment that comprises a smaller variety of stocks. With this investment scheme, the funds are concentrated on a limited variation from only a few sectors, instead of a diverse mixture of different equity positions.
These funds mostly hold their positions in roughly 20-30 companies or less, while other funds hold positions in over 100 companies. These funds are also known as “best idea funds” owing to their mandate of choosing a limited number of companies for purchasing stocks. The principal aim of these funds is to deliver maximum returns by investing in high performing assets.
WHAT IS THE PURPOSE OF FOCUSED FUNDS?
One of the principal benefits of investing in ordinary mutual funds is to promote diversity in equity investments. Most mutual funds invest in a large number of companies that have pre-determined weights to save investors from the hassle of selecting each security. Now, while this diversification helps investors maximize their returns while minimizing risks and volatility, on the flip side, they can also present certain drawbacks.
For instance, when investments are spread across various sectors and companies, the returns from them can also get limited because not all companies can outperform simultaneously.
The primary purpose of focused mutual funds is to allocate their holdings across a restricted number of carefully researched equity and debt funds. Even though these funds do not offer the advantages that come with the diversification of funds, they bank on the benefits that come with careful research for selecting stocks.
Thus, returns from these funds are considered to be more volatile. They are riskier than the mutual funds that invest in a large number of stocks but can also deliver higher returns than them. They are also alternatively known as “concentrated funds” or “under-diversified funds.”
MAJOR ADVANTAGES:
WHO SHOULD INVEST?
Focused equity fund investments are usually for veteran investors and individuals with a high-risk appetite. Since these funds are considered to be more volatile, it is best for investors looking for safe investment options to refrain from investing in them.
However, despite the risks they present, these funds are expected to gain more traction in the future. With a promise of higher returns than other mutual funds, they can help investors maximize the gains from their investments.
Additionally, since these funds only invest in several carefully selected securities, they are much more effective in bringing high returns to investors.
FOLLOWING ARE SOME OF THE FOCUSED FUNDS:
1. HDFC Focused 30 Fund
2. ICICI Prudential Focused Equity Fund
3. 360 ONE (Formerly IIFL) Focused Equity Fund
Disclaimer: Bajaj Capital Limited (‘BCL’) has taken due care and caution in presenting factually correct data contained herein above. While BCL has made every effort to ensure that the information/data being provided is accurate. BCL does not guarantee the accuracy, adequacy or completeness of any data/information in the publication and the same is meant for the use of the recipient and not for circulation. Readers are advised to satisfy themselves about the merits and details of each investment scheme, before taking any investment decision. BCL shall not be held liable for any consequences, legal or otherwise, arising out of use of any such information/ data and further states that it has no financial liability whatsoever to the recipient/ readers of this publication. Neither BCL nor any of its directors/ employees/ representatives accept any liability for any direct or consequential loss arising from the use of data/ information contained in the publication or any information/ data generated from the publication. Nothing contained in this publication shall constitute or be deemed to constitute a recommendation or an invitation or solicitation for any product or services. Any dispute arising in future shall be, subject to the Court(S) at Delhi. Views given in the articles are the personal views of the contributors and not that of the company. Readers are advised to go through the respective product brochure/ offer documents before making any investment decisions. Disclaimer: The rates of interest are applicable as on the data mentioned herein above. The rate may be revised at the sole discretion of the respective companies inviting the Fixed Deposits without further notice. Printed by, Rajiv Wadehra, Published By, Raji Wadehra on behalf of Bajaj Capital Investment Centre Limited, Bajaj House, 97 Nehru Place, New Delhi - 110019, and Printed at Sundeep press C-105/2, Naraina, Industrial Area Phase - New Delhi - 110028, and Published at Bajaj House,97 Nehru Place, New Delhi - 110019, Editor-Rajiv Wadehra (CIN: U0000DL1988PLC039417))
All Insurance products are sourced by Bajaj Capital Insurance Broking Ltd.