MONEY MULTIPLYING NEWS

LIFE INSURANCE

Protection and Peace: TAILORED TERM PLANS FOR SELF EMPLOYED HEROES

You have always strived to fulfill all your responsibilities and care for your family. Yet, life is unpredictable, and it’s essential to ensure our families are well-protected against any uncertainties.

Do you know the Term Insurance Protection Gap in India?

• Only 3 Out Of 100 People in India Have Life Insurance Policy: Economic Survey
• Economic Survey 2022-2023:Most Indians buy Life Insurance for savings, not protection
• 95% of the Indian population remains uninsured: National insurance Academy

So, what’s the solution? Introducing Bajaj Allianz Life Insurance iSecure Term Plan—a non-linked, non-participating individual life insurance plan. This pure risk premium plan offers regular and limited premium level coverage, ensuring your family’s financial needs are securely met.

Include your spouse at a later date in your existing policy, if you are single at present.

Plan to meet the recurring expenses of your loved ones’ by opting for payment of benefits in installments.

How does the plan work?

Let’s Understand with more examples:-

Benefits

Maturity Benefit

No maturity benefit shall be payable on survival till the end of the policy term.

Death Benefit

? Individual Life: -

a) In case of unfortunate death of life assured during the policy term, provided all premiums are paid up to date, the benefit will be Sum Assured on Death.

b) The policy cover will terminate immediately on death of the life assured.

Joint Life:

a) The death benefit is payable on death of each life, provided the policy is in-force. The benefit payable will be Sum Assured on Death.

b) On death of any one of the life assured, the policy will automatically continue on the surviving life assured with a reduced premium.

c) The policy cover will terminate immediately on death of the surviving life assured.

Summarizing the new & improved underwriting for Self Employed

1. Power of Surrogates in Secure

• Surrogate income proofs can be used as a standalone income proof:

Fixed Deposits/MF/Portfolio statements: Annual income = 0.5 x Value of Total Investments

• Monthly SIP: Annual income = Monthly SIP x 24.
• Car ownership: Annual income = 2 times of the IDV as on date.
• House/Shop ownership documents/Home or property Loan: Annual income = 24 x EMI
• Credit Card limits: Annual income = Monthly Credit limit x 2.

*Combinations of 2 surrogates are not allowed to arrive at financial eligibility

2. Income Proof waiver

• Income proof not required if -

? Credit Bureau Income is available

? Imputed Income (calc basis analytics model) is matching the required criteria

3.Income Criteria

• Minimum income for Self Employed is Rs. 2.5 Lakhs (Rs. 4 Lakhs in other products)

Eligibility Criteria

Riders Available

• Bajaj Allianz Accidental Death Benefit Rider.
• Bajaj Allianz Accidental Permanent Total/ Partial Disability Benefit Rider.
• Bajaj Allianz Waiver of Premium Benefit Rider

“Your Family Deserves the Best: Bajaj Allianz iSecure Term Plan”

FIXED INCOME

The Reserve Bank of India (RBI) has made several key announcements regarding its monetary policy:

1. Repo Rate: The RBI has kept the repo rate steady at 6.5%. The repo rate is the rate at which the central bank lends money to commercial banks. Maintaining this rate indicates that the RBI aims to keep borrowing costs stable.
2. Standing Deposit Facility (SDF): The SDF rate remains unchanged at 6.25%. This facility allows banks to park their excess funds with the RBI without needing collateral.
3. Marginal Standing Facility (MSF): The MSF rate is also maintained at 6.75%. MSF is a window for banks to borrow from the RBI in an emergency when inter-bank liquidity dries up.
4. Economic Outlook:

• Growth: The RBI has revised its GDP growth projection for the fiscal year 2024-2025 (FY25) upwards to 7.20% from the previous estimate of 7.00%. This upward revision reflects the RBI’s optimism about the resilience of domestic economic activity, supported by strong domestic demand.
• Inflation: The Consumer Price Index (CPI) inflation projection for FY25 remains unchanged at 4.5%. However, the RBI notes that the path to disinflation is being disrupted by volatile and elevated food prices, which are attributed to adverse weather events affecting agricultural output.

5. Monetary Policy Committee (MPC) Voting: The decision to maintain the policy repo rate at 6.5% and the stance of “withdrawal of accommodation” was made with a majority vote of 4:2 within the MPC. This means that four members of the committee were in favor of keeping the current rate and stance, while two members voted against it.

Summary of Announcements and Measures:

• Repo Rate: Maintained at 6.50%
• Standing Deposit Facility (SDF): Remains at 6.25%
• Marginal Standing Facility (MSF): Remains at 6.75%
• Economic Activity: Continues to be resilient, supported by domestic demand.
• Disinflation Path: Disrupted by volatile and high food
• inflation due to adverse weather events.
• GDP Growth Projection for FY25: Revised upwards to 7.20% from 7.00%.
• CPI Inflation Projection for FY25: Maintained at 4.50%.
• MPC Voting: 4:2 in favor of maintaining the policy repo rate and the stance of “withdrawal of accommodation”.

Interpretation:

The RBI’s decision to keep rates unchanged suggests a cautious approach towards ensuring economic stability while acknowledging inflation risks, particularly from food prices.

The revision in growth projections signals confidence in the economy’s recovery and robustness, driven by strong internal demand despite external uncertainties. The split vote within the MPC highlights differing views on the balance between fostering growth and controlling inflation.

The outlook for interest rate policies, both globally and in India, is signaling potential reversals, though the exact timing remains uncertain. Here’s an elaboration on the various points:

Global Interest Rate Trends

• ECB and Other Central Banks: The European Central Bank (ECB) has already reversed its interest rate cycle as of June 6, 2024, meaning it has likely lowered rates. Similarly, central banks in Switzerland, Sweden, and Canada have also eased their policy rates, reflecting a global trend towards monetary easing.
• US Federal Reserve: The market expects the US Federal Reserve to ease rates in its meeting on September 18, 2024. This anticipated move by the Fed could influence global financial markets and economic policies in other countries.

RBI’s Monetary Policy Considerations

• Next MPC Meeting: The RBI’s Monetary Policy Committee (MPC) is set to meet on August 8, 2024. There is speculation that the RBI might shift its policy stance from “withdrawal of accommodation” to a neutral stance, marking a step towards potential rate cuts in the future.
• Voting Dynamics: The last MPC vote was 4:2 in favor of maintaining the current stance, with two external members advocating for a change in stance and a reduction in the policy rate. This split suggests that there is growing support within thvve committee for easing monetary policy.
• Change in MPC Composition: The upcoming August meeting will be the last for the current set of external members on the MPC. By the October 2024 meeting, new external members will be appointed, and their perspectives will significantly influence future rate decisions.

Factors Influencing Rate Decisions

• Monsoon Progress: The Indian Meteorological Department (IMD) has projected a monsoon at 106% of the long period average (LPA). The progress and distribution of the monsoon are crucial as they affect agricultural output and food prices, which are significant components of inflation.
• Union Budget and Fiscal Deficit: The union budget to be presented in July 2024 is expected to maintain the fiscal deficit target at 5.1% of GDP. Fiscal consolidation efforts will be key in managing the overall economic stability.
• Global Rate Actions: Global monetary policy actions, especially those by major economies like the US, will be closely watched as they can impact capital flows and currency stability.

RBI Governor’s Statement

The RBI Governor highlighted that while global interest rate trends are important, the RBI’s actions will be based on domestic economic conditions. This suggests that even if the US Fed does not cut rates, the RBI might proceed with its own rate actions if local factors, such as achieving stable inflation around 4%, justify it. This approach emphasizes the RBI’s focus on domestic economic indicators over external influences.

Interpretation

• The RBI is signaling readiness to change its policy stance if domestic economic conditions, such as durable inflation control, warrant it.
• The upcoming MPC meeting in August 2024 is crucial as it ight set the stage for future rate cuts.
• The change in MPC members in October 2024 adds an element of uncertainty to the future monetary policy direction.
• Key domestic factors to watch include monsoon performance, the fiscal path outlined in the union budget, and global monetary policy trends.

In summary, while the RBI is attentive to global monetary trends, its primary focus remains on domestic economic conditions. The possibility of a shift towards rate easing appears to be gaining support within the MPC, contingent on favorable local economic indicators and the perspectives of new MPC members to be appointed later in the year.

MUTUAL FUNDS

While making investments, investors keep certain aspects in mind—how to grow their capital and protect their capital.

Markets offer many benefits to investors, along with a range of investment options. The risk and return potential of each investment option varies. During volatile times, asset allocation can help you remain at peace to a certain extent. To some extent, asset allocation contributes to stability in volatile markets, e.g., the pandemic-led sharp correction in March 2020. However, a high level of volatility is associated with equity as an asset class. This is why most investors stay away from equities or under-allocate to equities, despite this asset class?s long-term solid return potential. Such cautious investors, constantly fearful of high volatility, could consider investing in funds that dynamically manage equity allocation based on valuation levels.

Funds that invest in dynamic asset allocation, also known as Balanced Advantage Funds, are hybrid mutual funds that allocate investments in equity and debt instruments. This strategic allocation helps to minimize the risk, given its dynamic nature that adapts to all the market conditions by increasing or decreasing the allocation to debt or equity as required. For instance, when valuations are high (for example, October 2021), the exposure to equity is reduced compared to when valuations are low, and equity allocation is increased (for example, March 2020). The diversified investment style of open-ended dynamic asset allocation funds attempts to maintain adequate equity allocation levels while allocating a portion of the assets to fixed income securities based on market conditions. It also aims to benefit from volatility by reducing the overall cyclicality of the portfolio with an aim for potential capital appreciation.

A strategy such as this appears to have helped tame volatility in the past. In addition, it allows investors to participate in the long-term growth potential of equities.

Benefits of investing in Dynamic Asset Allocation Funds:

1. These funds help investors participate in the long-term growth potential of equities with much lower volatility.
2. They help in systematically managing equity and debt allocation based on valuations and keep emotions away from asset allocation decisions.
3. These funds provide a tax-efficient and cost-efficient dynamic asset allocation solution – taxation similar to equity-oriented schemes.

Suitability:

This ideal strategy is for investors seeking stable risk-adjusted returns with lower drawdown over long-term investment horizons.

DAA/Balanced Advantage Fund:

GENERAL INSURANCE

Presenting the Star Health Product: “Star Health Insurance Plan - Women Care.” This specialized insurance plan is designed to cater to the unique health needs of women. ? This comprehensive health insurance plan is specifically designed to address the unique healthcare needs of women. It provides extensive coverage for a range of health issues, including maternity care, reproductive health, preventive screenings, and critical illnesses. The plan aims to support women at every stage of life, ensuring they have access to the best medical care and financial protection. With tailored benefits and exclusive features, the ?Women Care? plan empowers women to prioritize their health and well-being with confidence and peace of mind.

Highlights of the Plan

Maternity Coverage is available up to the Limit of 1 Lacs according to the Sum Insured.

Maternity covered after 1 year for 15 Lacs & above Sum Insured.

New Born Baby Cover from DAY 1.

Bariatric Surgery covered up to the limits of Rs. 2,50,000/- and Rs. 5,00,000/- which are inclusive of pre and post hospitalisation expenses.

Automatic Restoration : - Up to 100% of the Basic SI) (Available immediately upon partial/full utilization of the limit of coverage).

Features of the Plan

How much does it Cost - Few Examples ..

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