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How to Achieve Financial Freedom this Independence Day?

dateKnowledge Centre Team dateAugust 10, 2021 views334 Views
Financial Freedom | Personal Finance | Financial Planning

Our economic status plays a vital role in deciding our physical and mental health. Financial well-being, of course, leads to better overall living. An investment made at the correct time in the right plans can be a game-changer for your life. Buying the best life insurance policy to secure your financial future is the first step. To achieve financial freedom, you have to take care of your financial well-being. We work hard for our money. So when will our money start working for us? Why not invest it somewhere that will be beneficial to you? Investing is one way to take control of your financial future. It helps you to build money while also providing an alternative income source if you need it before retirement.

Investing improperly or not at all might result in a longer working life. When you take investing seriously, the profits you earn can help you maintain financial security in the future. The returns you may anticipate from your investment are mostly determined by your investment objectives, the sum you invest, and the timetable you are considering.



You must finally confront the repercussions of your conduct (or lack of). Investing is the same way. To achieve major life benchmarks, such as sending your child to university or creating your retirement account, you must invest. When it comes to investing, it is usually advisable to get started as soon as possible.

What is Financial Wellness?

Your total financial health is referred to as financial well-being. But it's far more than your bank balance. It understands where to go next with your income and feeling positive about your financial status. It also refers to your capacity to survive a financial emergency, such as one brought on by a lousy economy.

The following are the most important aspects of your financial well-being:

1. Being able to pay for monthly and daily costs without difficulty.

2. Ability to purchase certain items without difficulty.

3. You won't have to worry about unforeseen expenses or payments.

4. When it concerns where you reside, starting a family, and purchasing anything you want within budget, you have options.

5. You're also defining financial objectives for the future and devising a strategy to accomplish them. Purchase a home, save for education, prepare for retirement, and so on.

Is Investing different from speculating?

Investing is also distinct from speculating, which is defined as a strategy for obtaining big returns on your assets in a short period. Speculation may be thought of as a type of high-risk investment with a limited holding period.

You can think of speculation as a one-time yoga early in the morning, feeling refreshed that day and thinking you're done for life. Investments are often long-term in character and manage risks so that the rewards are proportional to the risk incurred.

Three Reasons to Invest Mindfully for a Planned Financial Future

Investing your wealth means optimising your finances. If you plan your finances carefully, you can put your wealth for better returns, which in turn will provide you a financial safety net. Here are three reasons you should invest for your financial future:

1. Higher returns

Investing funds in an asset is a compromise because the investor disregards the benefit of utilizing the funds for his commitment now in exchange for a higher utility afterward.

a) Dividends and capital gains are two methods to profit from stock investments.

b) Investing in a bond can provide regular repayments or coupons over defined periods, benefiting the investor.

c) Rental income and capital gains can both benefit an investor who invests in real estate.

2. Retirement plan

The majority of people save for their retirement. Because most individuals rely on their wage income to satisfy their necessities, it might be difficult to maintain one's lifestyle after retirement if one is unemployed.

Learn what is retirement planning and how much money is needed after retirement in India.

3. Achieve financial goals

One of the most important strategies to achieve one's financial objectives is to invest. As a person progresses in life, new financial obligations emerge. It generally begins with the purchase of a home. Even if a home is purchased with a loan, a large down payment is required.

Children's college education is another key investment aim. With today's high university tuition, a family can begin saving for university tuition even while their children are still young. Apart from these financial objectives, retirement is an ever-present financial objective for people throughout their working life.

Where can you Invest?

Investing in various saving plans offered by Canara HSBC Oriental Bank of Commerce Life Insurance will help you grow money and provide you with an income whenever you need one.

1. Savings Plan: It provides you with guaranteed maturity benefits when all premiums are paid. This plan has multiple premium payment options making it a flexible premium and investment option.

2. Grow Smart Plan: Helps you invest equity in various small, mid, and large-cap companies. Flexible premium rates as you can choose your paying term as per your capability.

To various individuals, investing might mean various things. While some people think of investing as investing cash into a business to make a profit, it may also imply putting in additional effort for a long-term benefit, such as improving one's abilities or wellness.

We shall define investment in this context as "placing money into investment instruments, stocks, land, or a business endeavour with the hope of making a profit." This Independence Day, take a vow to invest in the right plan that suits your needs.

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Frequently Asked Questions (FAQs) Related to Life Insurance Policies

The premium is one of the most important factors to consider before buying a life insurance policy. Many people buy a life insurance policy with a high sum assured but are unable to process the premiums for the entire premium payment tenure. You can get a better idea of the premium outgo with the premium calculator available in the 'Tools and Calculator' section of www.canarahsbclife.com.

Life insurance plans come with several riders which increase the efficiency of the policy for the buyer. For instance, if you have a history of terminal illness in your family it would be advisable to opt for terminal illness rider with your term insurance plan. Riders or add-ons help in customising the standard policy benefits for the requirement of different families. The iSelect term insurance plan comes with a built-in cover for terminal illness, and option for protection against accidental death or disability. You can also opt to cover your spouse's life under the same policy by paying an additional premium.

Life insurance companies calculate the premiums based on several factors such as age, gender and occupation.

Age: It is one of the biggest factors that influence life insurance premiums. Premiums tend to be low when the life insured is younger as the chance of contracting diseases is low. Young people also opt for the best life insurance policies with longer tenures and pay premiums for a longer duration, which makes the policy cheaper for young people.

Gender: The insurance premium for women is generally lower when it comes to life insurance plans. Women live longer and pose a lesser risk of a claim leading to lower premiums for them.

Lifestyle habits: The premiums for people who smoke or drink is always higher due to higher health risks.

Policy term: Policy terms are also taken into consideration by insurers while deciding the premium amount. Life insurance policies with longer tenure are cheaper as compared to short-duration policies.

Mode of purchase: The platform that you use to buy the best life insurance policy also determines how much you will have to pay for the plan. People who buy life insurance policies online have to pay lower premiums as compared to offline policies.

Occupation: The nature of your work is an important factor that influences the premium amount. Certain occupations like shipping and mining are considered more dangerous as compared to jobs in services industries. The insurance premium rises with the risk profile.

Processing life insurance claim is a transparent and smooth process with Canara HSBC Oriental Bank of Commerce Life Insurance.

In case of the death of the life insured, the nominee will have to intimate the company by filling a Death Claim Form and sending it to the nearest branch office.

Once the form is received, the claim is registered by the insurer.

After the registration of the claim, the company will send the claims pack along with the related forms such as physician’s statement form and employer certificate that need to be filled.

Along with the duly filled forms a few documents such as original [policy document, death certificate, copy of bank passbook, hospital or treatment records, photo identification and address proof have to be provided.

The claim is processed on the submission of relevant documents. Once the documents are verified, the claim amount is released post all due diligence.

Household expenses rise with age. The cost of children's education increases along with other lifestyle expenses. The iSelect term plan offers an option to increase the cover according to the life stage. If opted, the insurance cover increases by 25% at every 5-year terminal till the 20th policy year.

Even though a life insurance policy is bought to protect your family in your absence, there are chances of the claim being rejected due to several factors.

False information: If the policyholder provides false information or conceals important information while buying the life insurance policy, the insurer has the right to reject the claim after his/her death.

Type of death: Deaths due to suicide in first policy year, intoxication or pre-existing disease is not covered under life insurance plan.

Premium payment: The payment of premiums on time is of utmost important to avail the benefits of life insurance. Life insurance policy may lapse on the failure to pay the premiums

Nominee details: A life insurance company can put the claim on hold if the nominee details have not been filled or not been updated by the policyholder.

Suicide: If the life insured commits suicide within 12 months of buying the life insurance policy, the insurance companies generally pay 80% of the total premiums paid.

Buying the best life insurance plan online is not only safe but a better option. Online life insurance policies have lower premiums and the individual is not required to visit the insurer's branch or a bank. The best life insurance policies online insurance offer higher benefits. Customers should, however, buy online life insurance policies only from credible insurers and should check for SSL certificate on the website to ensure that the website is legitimate.

The cost of life insurance policies varies depending on factors like age, gender and occupation. The average cost of life insurance plans, especially term plans, is very low compared to the amount of coverage offered.

An individual is allowed to have multiple life insurance policies. People opt for more than one life insurance policy to increase the cover or avoid claim rejection. In case of multiple life insurance policies, even if the claim is rejected by one insurer, the beneficiaries may receive the benefit from a different insurer.

Life insurance policies are of different types. In case of unit-linked or endowment policies the policyholder receives the maturity benefit at the end of the policy term. However, in the case of term insurance plans, there are no maturity benefits. The death benefit is only paid out after the death of the life insured.

When you buy a life insurance policy, the insurance company asks for the nominee details. Only the person named as the nominee in the life insurance plan can cash out in case of death of life insured.

A life insurance policy is generally taken for a specified period. After the policy duration of a term plan gets over, the policy simply terminates and ceases to exist. However, in case of unit-linked plans or endowment, you can use the policy as a tool for retirement planning and the accumulated corpus is used by the insurer to pay you monthly amounts for your entire life.

If a policyholder purchases a term plan for 25 years and dies during the policy term, the beneficiary receives the death benefit. In case of iSelect term plan, the policy provides four payment options to the beneficiaries. If the regular payment option is chosen, the policy works as a source of regular income.

It is a popular misconception that life insurance plans are only for accidental deaths. A term life insurance plan like iSelect Star Term Plan also covers terminal disease along with death. A terminal illness cover is important as health insurance pays only for the cost of treatment and hospitalization, but a terminal illness cover pays you a lump-sum amount which takes care of other expenses. On the other hand, unit-linked policies such as Invest 4G cover death and also provide decent returns for other financial goals such as buying a house of child's education.

It is ideal to buy a life insurance plan in your early 20s because it is the time when people have just started with their professional life and so there are lesser responsibilities and financial liabilities to take care of. Also, if you buy the best life insurance plan at this age, you will be paying relatively lower insurance premiums since it’s a due fact that mortality rate in case of young people is low. And that is why life insurance companies offer lesser premium rates to younger people as they think that they are most likely to be fit and healthier with less chances of filing a claim in future.

Once you have cancelled your life insurance policy, you will instantly lose your life insurance cover. Afterwards, your insurance company will get in touch with you and ask for valid reasons regarding the cancellation of your policy. In case you cancel your life insurance policy within the grace period, i.e. 15 to 30 days, depending on your insurer, then insurance company will reimburse the premium amount paid by you. But, no refunds will be paid to you if the policy is cancelled after the grace period.

Yes, you can take life insurance under Married Women’s Property (MWP) Act, 1984 only if you are a married man and a resident of India. Buying a life insurance plan under MWP Act would be helpful in saving your family’s financial well-being when you are not around. As per this policy, only wife and children would be eligible to receive the death benefits. You can also buy a policy if you are a widower or a divorcee. However, in that case, you can give your child’s name as your beneficiary. It is very simple to buy a life plan under MWP Act. All you need to do is to fill up an MWP addendum while purchasing an insurance policy.

Yes, there are different payment options for you to pay premiums. Here’re some of them

    1. Regular premium payment option – This premium payment option allows you to pay premiums equal to your policy term either monthly, quarterly, half yearly or annually.

    2. Single payment option – Through this premium payment option, you can pay the lump-sum amount in one single payment.

    3. Limited payment option -In this premium payment option, you can pay premiums for a specific period of time less than policy term either monthly, quarterly, half yearly or annually, but benefits of insurance can be enjoyed for a longer period of time.

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