Daily News

Why do you need an emergency fund?

Considering the surprise lockdowns and severe health problems that followed COVID-19. It is evident that emergencies can strike at any time and without warning. This is the primary reason why individuals have become more aware of the importance of good financial management and the establishment of emergency funds.

Why do you need emergency fund?

Emergency reserves should be built-in life to cover any form of unforeseen mishaps such as car breakdown, job loss, or medical bills, says Indraneel Chatterjee, co-founder of RenewBuy. Depending on one’s financial capabilities, one should set aside a suitable amount as a safety fund for a financial emergency. One can use this safety fund without jeopardizing one’s investing goals. Thus in the post-pandemic era, these funds have become indispensable instruments for people of all ages.

An emergency fund corpus is incredibly important at any stage of life. It should be one of the top financial goals of an individual. But, how much you should put aside for an emergency fund.

How much is sufficient for you?

According to financial advisors, one should build an emergency fund of 6 to 12 months’ worth of living expenditures. At first glance, it may appear that accumulating a huge sum of money is difficult.

emergency fund

Since it is impossible to put together 6-12 months’ worth of living expenses separately, thus experts advise starting small. Start by accumulating 2-3 months’ worth of living expenses, and then progressively increase it.

It’s also worth noting that the corpus is influenced by things like a person’s age, the number of dependents they have, and the type of employment they do. As a result, experts recommend including monthly expenses such as all living expenses, EMIs, rent, and any other fixed expenses you may have when determining the corpus. Once you have this figure, multiply it by the number of months to get the required corpus.

Daily News

SC asks Centre to collect data on disbursal of ex-gratia to kin of COVID-19 victims, pulls up Guj govt

On Monday, the Supreme Court ordered the Centre to collect progress reports from the states regarding the ex-gratia compensation to the kin of COVID-19 victims. The court ordered to disburse ex-gratia compensation of Rs 50,000 to the kin of COVID-19 victims. And chastised the Gujarat government for issuing a notification forming a scrutiny committee in violation of its orders.

supreme court

Justices MR Shah and BV Nagarathna asked Solicitor General Tushar Mehta to collect data from all states. And furthermore, create a grievance redressal committee by the next hearing date on November 29.

The bench was hearing a plea seeking to overturn a resolution issued by the Gujarat government’s health and family welfare department. The resolution states to establish a ‘COVID-19 death ascertaining committee for the scrutiny of COVID-19 deaths.

At the outset, Mehta, who is representing the Gujarat government, stated that the government had issued an amended response to the court’s November 18 order. Albeit it still needed some tweaking.

The court also stated that the person who the first notification should be identified and made accountable.

Supreme court

On October 4, the Supreme Court ruled that no state can reject the ex-gratia compensation of Rs 50,000; to the kin of the COVID-19 deceased. This is valid even when the COVID-19 virus was not specified as the cause of death on the death certificate.

To avail of the compensation, submit an application to the appropriate district disaster management authority or district administration. The court asked to pay the ex-gratia within 30 days of the submission date of the application. Along with proof of the deceased’s death is due to coronavirus and the cause of death being certified as “died due to COVID-19.”

Daily News

Online sale of term life insurance products gains traction: Max Life

According to a Max Life Insurance senior official, online sales are gaining traction in the life insurance industry. One out of every five-term contract is purchased directly by customers rather than through agents and advisers.

max life insurance

Max Life Insurance Deputy Managing Director V Viswanand claimed, “Indians purchased 12.5 percent of overall term plans by premium online last financial year. Although saving is still low at less than 1% of total premium via the channel.”

“It’s started to become a substantial channel for some organizations like ours… In FY21, Max Life’s market share was close to 30%. Currently, Max Life has a one-fifth market share in India’s online term purchases. While our offline market share is one-fifth of that,” he said.

Viswanand told PTI that the average age of policyholders purchasing policies online is 36 years old. And the company has implemented various unique programs for online consumers based on their feedback.

“We also pioneered a lot of financial auto underwriting, leveraging credit bureau partnerships.” As a result of our bureau partnerships, we don’t ask for any additional proof from 60% of our e-commerce consumers. Customers have experienced less friction as a result of this,” he said.

He also mentioned that the company offers premium vacations to consumers after a few years, with no questions asked, as well as specific leave choices.

How COVID-19 has affected the Life insurance industry!

According to him, the advent of the COVID-19 pandemic has resulted in increased insurance awareness and the deployment of technology has accelerated at this time.

covid affected life insurances

“In the first wave, we witnessed elderly people being admitted to hospitals and deaths occurring, but in the second wave, we saw that there was no age prejudice. It had no prejudice against co-morbidity. Mortality was common, and I believe individuals realized that they are not infallible when it comes to their own lives. “Just because you’re healthy now doesn’t mean you’ll be healthy tomorrow,” he explained.

The epidemic has raised public awareness, as seen by the large increase in sales of pure protection plans following COVID-19.

Daily News

How to choose the right travel insurance during covid-19

The covid-19 epidemic had the greatest impact on the tourism and hotel industries. Domestic and international travel have been in decline since 2020, and the sector is still striving for a comeback. In addition to travel, covid has an impact on the travel insurance business.

choose right travel

Because most countries have not opened their borders to international travel, the market is still slow. Some nations compel travelers to get travel insurance, and many others follow. As a result, you may need to include travel insurance in all of your trip arrangements.

The travel and hospitality industries have a close inter-relation with a negative impact on one having an unintentionally negative impact on the other. The Insurance industry saw a severe impact from the COVID-19 related restrictions. However, that will change in the coming months. We can anticipate a gradual movement of travel.

COVID-19 risks are still not elevated completely and many countries are expecting travel insurance for your trip. Hence, you should always prioritize travel insurance policies that cover covid-19-related expenses.

How to choose the right travel Insurance?

TATA AIG, HDFC ERGO, Bajaj Allianz, Go-digit, Care Insurance, and BhartiAXA, according to insurance experts, are insurance providers that can assist consumers to have a hassle-free and easy journey. You must choose carefully while purchasing travel insurance to cover the fees incurred for covid-19.

travel insurance policy

When acquiring travel insurance, one must look for every potential incurring cost. Including basic medical charges, lost/stolen/delayed baggage costs, cancellation/delay costs, and lost belongings costs.

When buyers have so many options on the market, they must assess the product’s qualities. In addition, the insurance payment ratio of insurance firms, partnerships with international network hospitals, solvency ratio, and market performance must all be considered.

People must choose insurance that includes health protection and agency assistance to cover medical bills. As well as a variety of other medical services including ambulances, daily hospital cash allowances, and accidental compensation.

Daily News

Recast loans at non-bank lenders may double by this fiscal end: Report

Recast loans at non-bank lenders may double by the end of this fiscal year. The restructuring of assets of non-bank lenders is likely to double up, to 3.3 percent by March 2022. The main reason for this trend is the impact of the second wave of the pandemic.

recast loans

The same ratio was previously at 1.6 percent as of March 2021, after the first wave of the pandemic. The pandemic helm the Reserve Bank of India (RBI) to make an exception by launching a loan recast facility. This scheme is envisaged for the borrowers impacted by Covid-19.

The Credit rating agency, ICRA said the restructured book for NBFCs is expected to be 4.1-4.3 percent as of March 2022 in contrast to 2.2 percent in March 2021. Meanwhile, the same rate of 2.0-2.2 percent is expected for housing finance companies against the earlier rate of 1.0 percent in March 2021.

recast loan

Why the Second wave could be a reason?

The second wave of coronavirus infections is responsible for imputing the budding recovery in non-bank collections. The predictions for the respective collections in Q3 FY2021 and Q4 FY2021 do not bring that sunlight anymore. The second wave is severely impacting the cash flow of the underlying borrowers. Therefore, further prolonging the recovery process.

The Vice-President of ICRA, A M Karthik, said the nature of the underlying security governs the higher incidence of recasts for NBFCs, against the Housing finance companies (HFCs) with home mortgages.

Vehicle, SME (small and medium enterprises) and personal loans are the bulk of the NBFC’s credit accounts. Such customers were facing asset quality-related pressures during the last fiscal. Entities with a sizeable share of new and heavy and medium commercial vehicles witnessed higher restructuring. While, the same was modest for other segments like cars, two-wheelers, and tractors.

According to Crisil, liquidity cover rating at NBFCs has improved from a year ago. This puts NBFCs in a better position to service debt in the near term, which will cushion the impact of the pandemic. This trend is changing from the respective scenario of last year when asset-quality and liquidity fears multiplied. This observation came after the announcements for a moratorium on repayments and stringent lockdowns. Now, once again the second wave is affecting the collections in the current fiscal, and the decline has been more pronounced in May. As the containment measures in most parts of the country only started in the latter part of April.

For more such updates, keep watching this space!

Advices Budgeting Business COVID-19 Daily News

GST Rates Cut Down For COVID-19 essentials?

”It is expected that in line with the fitment committee’s suggestions, the GoM empowered to look into the GST relief on COVID-19 related drugs and other items have opted for a blanket rate of five percent even for other items (drugs already attract five percent). The complete exemption is likely to be counter-productive. Anyway, GST reduction will not directly benefit people who are getting the COVID-19 vaccines for free (which today comprises the majority),” said Mr. Saket Patawari, Executive Director–Indirect Tax, Nexdigm.

essential vaccines and medicine

A list of the category-wise essentials and services is presented by the council is mentioned below:

Category Item Present GST Rate Recommended GST Rate
COVID vaccines All vaccines 5% 5%
Medicines Tocilizumab 5% Nil
Amphotericin B 5% Nil  
Anti-Coagulants like Heparin 12% 5%  
Remdesivir 12% 5%  
Any other drug recommended by the Ministry of Health and Family Welfare (MoHFW) and Dept. of Pharma (DoP) for Covid treatment Applicable Rate 5%  
Oxygen, Oxygen generation equipment and related medical devices Medical Grade Oxygen 12% 5%
Oxygen Concentrator/ Generator, including personal imports thereof 12% 5%  
Ventilators 12% 5%  
Ventilator masks / canula / helmet 12% 5%  
BiPAP Machine 12% 5%  
High flow nasal cannula (HFNC) device 12% 5%  
Testing Kits and Machines Covid Testing Kits 12% 5%
Specified Inflammatory Diagnostic Kits, namely D-Dimer, IL-6, Ferritin, and LDH 12% 5%  
COVID-19 related relief material Pulse Oximeters, incl personal imports thereof 12% 5%
Hand Sanitizer 18% 5%  
Temperature check equipment 18% 5%  
Gas/Electric/other furnaces for the crematorium, including their installation, etc. 18% 5%  
Ambulances 28% 12%  

GST on Vaccine

Previously on 28th May also GST council referred to the decision over tax rates on the COVID-19  vaccine to a group of ministers. The Goods and Services Tax Council is chaired by Finance Minister Smt. Nirmala Sitharaman. She approved all the recommendations of the group of ministers which was set up to deliberate tax relief on covid-19 essentials.

She explained that the center will buy the 75% vaccines and will pay its ST too. 5% of tax will stay on the vaccine. These rates will be valid till this September.

For more such updates, keep watching this space!