Evaluating Insurance Proposal

Come the month of March and you are flooded with all kind of insurance seeking some business from you. Now the kind of data they provide does not instantly gives you an idea of income. I have observed that you normally can not earn a good income on insurance policy. The money you get is your interest income.

The actual cost for consideration is the cost of insurance which varies between different policies and in the policies between different terms (years).

It is indeed very easy to compute the cost of insurance, with Excel.


In this evaluation of Jeevan Anurag which I opted from my 21 yrs old son, I put all the information and computed present value of all future payments and present value of all future receipt. The difference is the cost of insurance. In this case, the cost of Insurance is Rs. 7252 and cost of insurance per 1000 of sum insured per year is Rs. 13.19. Any payment you get back is your own money invested at the rate given in the table.

I computed atleast five type of policies and found the Bima Gold to be the cheapest @ Rs. 5.76 per 1000 of sum insured per year.. However, the insurance  financial changes with the  policies and the person to be insured.

I am attaching the excel sheet so that you can play with it. The formulas used are quite simple. Please do let me know your feedback.

Excel File

Before buying a ULIP

With the recent turmoil in the finance market, reduction in disposable income and more importantly reduction in easy money, finance market operator are finding more difficult in meeting their targets. I have been continuously followed up for making new insurance policies. I decided to have a comparative study of ULIP and the alternatives.

With the increase in PPF interest to 8.6% it has become a very viable medium of investment.

For the purpose of my computation, I decided to buy term insurance for a similar amount of sum insured from the same insurance company and investment of the amount in PPF in the first year. The result was surprising. My PPF investment will give me double the return that is expected from ULIP Policy. For this study, we decided on single payment policy. The sum insured is Rs. 2.5 Lacs, single premium is 50,000, term is 10 years and the guaranteed return at the end of the term is 180% in the NAV Rate. Guarantee is in the NAV rate and not on the initial investment. The surprising factor was a host of expensed deducted by ULIP operator.tmpF9FC

So a single premium ULIP policy is Rs. 57256 at the guaranteed rate of interest of 6%, and Rs. 88440 at a very optimistic rate of 10%. If a comparative term insurance is chosen with yearly payment the PPF balance will be Rs. 91796. The insurance agent, may say that you have to pay the premium yearly which is a hassle. Hold on. There are more surprises. If the same policy is taken with a single premium, the actual premium is Rs. 3348/- But for the terms of the policy the minimum has to be Rs. 5000/-.

Even considering Rs. 5000/- as the insurance cost, the return is more, even more than when the premium is paid monthly at Rs. 93082/-. The same money can buy you term insurance of up to about Rs. 5,00,000/-. Hence before taking ULIP you should do your homework well.




Cheque validity reduced from six months to three months

RBI has reduced validity of cheques from six months (counted from the date of cheques) and other similar instruments to three months. This means that if I issue a cheque today, it must be presented and clear before the expiry of three months. This limit was earlier six months. Not a very good amendment. This will be applicable to instrument issued on or after 1-4-2012.

RBI/2011-12/251 DBOD.AML BC.No.47/14.01.001/2011-12 November 4, 2011

The Chairmen/Chief Executive Officers
All Scheduled Commercial Banks (excluding RRBs)/Local Area Banks

Dear Sir,

Payment of Cheques/Drafts/Pay Orders/Banker’s Cheques

In India, it has been the usual practice among bankers to make payment of only such cheques and drafts as are presented for payment within a period of six months from the date of the instrument.

2.  It has been brought to the notice of Reserve Bank by Government of India that some persons are taking undue advantage of the said practice of banks of making payment of cheques/drafts/pay orders/banker’s cheques presented within a period of six months from the date of the instrument as these instruments are being circulated in the market like cash for six months. Reserve Bank is satisfied that in public interest and in the interest of banking policy it is necessary to reduce the period within which cheques/drafts/pay orders/banker’s cheques are presented for payment from six months to three months from the date of such instrument. Accordingly, in exercise of the powers conferred by Section 35A of the Banking Regulation Act, 1949, Reserve Bank hereby directs that with effect from April 1, 2012, banks should not make payment of cheques/drafts/pay orders/banker’s cheques bearing that date or any subsequent date, if they are presented beyond the period of three months from the date of such instrument.

3.  Banks should ensure strict compliance of these directions and notify the holders of such instruments of the change in practice by printing or stamping on the cheque leaves, drafts, pay orders and banker’s cheques issued on or after April 1, 2012, by issuing suitable instruction for presentment within the period of three months from the date of the instrument.

4.  Please acknowledge receipt

Yours faithfully,

(Deepak Singhal)
Chief General Manager in-Charge

What is Corruption?

Recent controversary surrounding one of the celebrity member of India Against Corruption forced me to rethink about what exactly is corruption.

Simply speaking, as defined in wikipedia, In philosophical, theological, or moral discussions, corruption is spiritual or moral impurity or deviation from an ideal. In economy, corruption is payment for services or material which the recipient is not due, under law. This may be called bribery, kickback, or, in the Middle East, baksheesh .


It also lists abuse of the system as an activity which can be termed as a corrupt practice. If someone can collects money by inflating his expenses as a means for fund raising for his NGO, what is the harm if a Government Officer indulge himself in a corrupt pracitce for raising fund for her daugher marriage or her education. The cause is noble. In such a situation, do we justify the act of the Officers? Certainly not.

We can not justify the action of inflating bills and putting forward the argument that it is not meant for personal benefits and has been used for promoting social welfare. No, this is not acceptable. It is a CORRUPT Practice and that too by the chief of Police of India’s Capial. On top of this, it hurts when it is defended. When such highly so called literate people indulge in this kind of act, how you can act against pitty Government Officials.

It was a great relief to read news items that the so called Celebrity has decided to refund such excess. It is a welcome move. However, this act does not seems to be voluntary which is a cause for concern. Such people has no right to talk about corruption and holding the country.

Again speaking about corruption, one fails to understand why a job related issues is being fight in the media. If you have issues with your ex-employer you have sufficient forum to fight your case. One can not say that they do not have money and since they are involved with public good, no one should make genuine demand against them. This is hypocracy. They should fight the battle against the employer in a proper and legal forum., Why fight this in media and spead all kind of issues with the poor.

Yet again is the curious case of a Rath Yatra being taken against corruption by a leading opposition political leader. His own party chief ministers has been put inside the Jail for corrupt activities. To distinguish his act as a minor as compared to the ruling party corruption is still amusing. An activity of corruption is a corrupt activity per se. Are we to judge whether they are minor or major? What are the yardstick for such judgement.

It seems all the players, are just enjoying their work and no one is serious about fighting against corruption. The social activists who initially gave great hope is now to be taken with a pinch of salt. It is absolutely necessary that in such cases, people above any question mark should be involved.

Again it is surprising to note that such a large movement does not have even a bank account! This has not been denied by any of the people involved with the agitation. Did they not expected that such a movement will have financial transaction?

Someday we will get rid of corruption. However, it is unlikely that the current agitations will acheieve anything substantial.

Agitation by a Baba

I wake up late into the night to see live the happenings at Ramlila ground on the night of 4-5 June 2011. The situation and event that unfolded certainly needs to condemned in the strongest word. The event was not a desirable even  in a democratic nation that is India.

The next question is who is responsible for such a situation? After Anna and then Ramdev, the Government seems to facing a new breed of opposition. Personally feel that Both Government and Baba is responsible for the mess. Government should have shown restraint but it appears that they have very limited options. The situation could have been completely different if Baba has given to the Police Custody himself instead of showing restraint.

It only appears natural that Baba should come up with a transparent account of his property and how he got it more importantly what kind of negotiations he was having with Govt. If he does not, sooner or later, people will loose faith in Such Baba as well.

Why FCRA is important!

Foreign Contribution Regulation Act has assumed significance in the recent days. We must understand why it has become such an important Act for NGO in India.

The total number of Association registered under the Act as on 31-3-2009 has been 36,414. Out of this only 20,088 has submitted their return indicating that about 44.84% of the association choose not to submit their return. A large number of these Association is likely to have no receipt of FC.

Total Amount that has been received is estimated at above Rs. 10,000 crore at Rs. 10802.67 crore. The highest recipient were all non Christian association. A very important point is about 50% of receipt is consumed by establishment expenses. In Other words. for every Rs. 100/- received as donation by an NGO, Rs. 50/- is consumed by the Association itself which is very high. To spend Rs. 50/- om charity an Association typically needs Rs. 50/-. Surprised….




Census 2011

Provisional data pertaining to Odisha  has been released partly by the Census Department. This makes interesting study. The population of the state as per Census 2011 stood at 4,19,47,358 comprising of Males – 2,12,01,678 and female – 2,07,45,680. Odisha represents appx. 4.5% of the population of India and this indicates reasons of relatively weak position of the State in Center’s Policy. Decadal growth has been at 13.97%. It is important to note that Odisha has much better male female ratio at 978 as compared to India Figure of 940.Out of the 30 districts, 10 district has more females than male.In terms of Area, Mayurbhanj at 10,418 sq km is the biggest District. Jagasinghpur is the smallest district with just 1,668 sq km. representing about 10% of the area of the largest district. In terms of population, Ganjam is the biggest district having a population of 35.20 lacs. The smallest district is Debagarh at 3,12,164.

It is interesting to note that during 1901-1971, the population increase was 100%, where as between 1901-2011, the population growth is 307.14%.

There has been an increase of just about 1,50,00 in population of Sundergarh District indicating that population of Rourkela has also not increased much. Citywise figure is yet to be released.


73.45% of the population in Odisa is literate as against an all India Figure of 74.04%. This indicates that the Government need to do much more so far education is concerned.

NOW Intimate Foreign Gifts From Relatives > 1,00,000 to Central Government

The Central Government recently replaced the Foreign Contribution Regulation Act, 1976 with Foreign Contribution Regulation Act, 2010 effective 1st May, 2011.

The new provisions required that all gifts in kind or in currency exceeding Rs. 1,00,000 must be intimated to Central Government in Form No. 1 to FC Rules, 2011.

The said form requires not only your Income tax details, but also the income tax details of the giver / donor. For a copy of form no. 1 please visit www.helpngo.com

Anna Hazare, Corruption and Civil Response

Last weeks, fast unto death by Social Activist Anna Hazare, has revealed yet another facet of Social Civil Living.  The support of the people were spontaneous. Undoubtedly, people are fed up with mountain like corruption in the Society in each and every field.

People mostly supported his movements, without knowing his demands and his vision. Most of the support were in the form of anti corruption movement.

Instead what was sought to be achieved was a committee with participation from people to draft a new Lokpal bill. What purpose it has ..? Can a Government ensure its passage in both the house of parliament. On some pretext or other this is not going to be done. Interesting enough, Anna has now said that the movement requires experience people on the committee and recommended father and son duo in the committee. This is pure nepotism. Anna lost a fight without any substantial movement. How can he says that there are no other experience people in the country excluding father and son team. This is hard to believe.

Also why a bill in the form of ordinance was not pressed.

There are many questions which are difficult to be answered. I fully support Baba Ramdev when he raised the question.

I also doubt if he will garner such support in future.

The Jan Lokpal Bill is available on the above web site speaks only about Central Government, what about the State Government?

It is difficult to understand how and why people reacts.

one of the section of the Jan Lokpal Bill :

(3) The Chairperson shall have an annual meeting with the Prime Minister to assess the needs of Lokpal
for finances and manpower. Lokpal shall be provided resources by the Government on the basis of
outcome of this meeting.

If resources the Lokpal is dependent upon the PM, how he will report against him? Why an independent revenue mechanism not thought of?

We are the world

Congratulations, Team India, for you have given us our movement of happiness, the inner feeling of being Indian. The entire nations truly salutes you. The match itself was worthy of a final.


The happiness we got are unmatched and can not be bought for any price. Our city Rourkela was fully soaked in sheer joy and happiness. Thanks, once again.