The Signal: The Fool’s Misbehaviour

The signal

“Investments are subject to market risk. Read all scheme related documents before investing”

Nothing represents investor ignorance better than the above statement. Let me fix it for you –

“Investments are subject to risks even beyond the market. Only reading scheme-related documents will not help you mitigate those risks.”

Writers love to talk about fancy-name-ratios and how it indicates risk. Journals and columns love to rave about risk indicators more than the risk. In fact, most do not even dare tread beyond diversification to mitigate risk. 

But, here’s the bomb – market risk is NOT the biggest risk. 

You know market risks exist. You invest with an understanding that this risk may materialise, and you can incur a loss. 

But what if there is a risk that you are completely unaware of? 

Or even worse – you are aware of the risk yet continue to be a helpless victim?


Behavioural risk is the most underrated risk!

Even the most intelligent investors succumb to behavioural risk – especially during volatile times like now. While behavioural risk is an expansive subject, here are the three most critical and common behavioural fallacies among investors.

#1: The Investor’s Ego

There’s a popular notion about the investor’s ego – the moment a person buys his first equity share, he/she contracts this behavioural virus known as the Investor’s Ego. Symptoms include being excessively confident about own’s own rationale, ignoring conflicting opinions and in extreme cases – a tendency to compare oneself with Warren Buffett (or the other way round).

Often, investors refuse to accept own decisions as wrong and continue with futile attempts to make good of the situation. The inability to see beyond one’s ego is a prime reason for fractured relationships & broken investments.

Most long-term equity investments started out as an intraday trade gone wrong!

#2: Paying Attention

Don’t get this wrong. Paying attention is important; paying attention selectively is lethal.

“South-Asian Paints’ market share in Mumbai goes up from 30% to 35%. The company’s WACC has increased to 18% in just three quarters. Analysts note, the stock price has been exhibiting a continuous increase in the beta and standard deviation over the three quarters.”

Now, just because the investor itches to act upon newfound knowledge, they log into their trading account. 

What do you think happens next? Is it a buy or sell? What would you do?

Hold onto that thought.

Most investors (academically & professionally unrelated to finance as a subject) read the above as – 

“Increase in market share… blah-blah … increase to 18% in just 3 quarters … blah-blah-blah … continuous increase … blah … three quarters”. 

Is this how you read it?

If yes, let us take a wild guess about your investment decision. 

Was it a “buy”?

Here’s how paying attention selectively can backfire. As humans we tend to retain only the things we understand and base our decisions on the information our memory retains. 

Here, it is simple to understand that the company’s market share has increased (which is a good thing) and then we read through some more mumbo-jumbo that talks about an increase – so we presume this is also a sign of progress.

Here’s where things go wrong, and this is how wrong investment decisions are made. 

For the curious, the other two increases were referring to an increase in cost and increase in risk (which is not a good thing!).

It is okay to pay attention selectively if that piece of information has no role in your investment decisions.

#3: The Itch

Drawing from the above illustration, the investor can still do well if he stops at paying attention selectively. The real problem begins when he acts on it. 

This itch to act upon newfound information is also popularly known as action bias.

“Charlie and I decided long ago that in an investment lifetime it’s just too hard to make hundreds of smart decisions. That judgement became even more compelling as Berkshire’s capital mushroomed and the universe of investments that could affect our results shrank dramatically. Therefore, we adopted a strategy that required our being smart – and not too smart at that – only a very few times. Indeed. We’ll now settle for one good idea a year.” 

– Warren Buffett

Investors need to find solace in the fact that not acting upon something is also a conscious action. While this may seem straightforward, most investors are vulnerable to this behavioural risk. If you are considering investing, switching or redeeming any of your capital market investments because of the current volatility – that’s a prime symptom of the itch

Do not be a fool. Do not misbehave.

Each time you feel like tweaking your portfolio, wash your hands for 20 seconds and utilise the time to think about this – 

A theory suggests that oxygen absorbed during respiration damages cells through oxidation which leads to aging and consequently death. In a way, the elixir of life is also the kiss of death. (Now you know why they recommend antioxidants in diets!)

Is it possible that your paranoia about financial security led you to making great investment decisions and the same paranoia will push you to overdo it and ruin the fort you built?

Finsight (15th June 2020 to 19th June 2020)


Indian Equity Markets ended on a negative note for the week. Nifty 50 was down 1.7% and Sensex by 1.5% respectively.

Weekly Capsule

– US Fed sees interest rates staying near zero through 2022

The Federal Reserve kept interest rates near zero indicated that rate might stay as it is till 2022. Also, during the Fed meet US Fed Chairman Jerome Powell said that the US economy will shrink by 5% in the year 2020 but will see a growth only in FY 21.

– Telecom operator dues

The Supreme court has asked private telcos to provide for security and repayment of roadmap in an attempt to allow telcos to replay AGR dues over a 20 year period. And if telcos are not able to furnish those guarantees the apex court is likely to consider a shorter time frame which may not be good news for these players.

– Indian Economy to Bounce Back with Growth of 9.5% in Next Fiscal: Fitch

After a contraction in the current financial year, India’s economy is forecast to bounce back with a sharp growth rate of 9.5% next year provided it avoids further deterioration in financial sector health. It has forecasted a 5% contraction in the GDP in the ongoing financial year.

Nifty at glance 


outlook of week

Outlook for next week:

We feel that the markets will tend to be volatile over the next week also. Investors are suggested to invest only in staggered manner. The important number to watchout for next week in Indian market would be India Vix which is currently at 30-32 levels. In upcoming week markets are expected to remain volatile and this vix levels to elevate.

The Goldilocks Planet of Investment – Digital Gold

The Goldilocks Planet of Investment - Digital Gold

If you are a space buff and follow, all the latest updates in the space race, appalled by the beauty and mysteries of space you already know what a Goldilocks planet and probably why are we referring to Digital Gold as it. You can skip and straight away go to the section ‘Why is 24K Digital Gold A Better World for Gold Investment?’ Before we fly into the idea of Digital Gold being the better alternative world for gold investment, it would be wise to understand why are we referring to Digital Gold being a Goldilock planet and the source of this term.

Understanding the Concept of ‘Goldlilocks Planet’

It all starts with a fairy-tale: ‘Goldilocks and The Three Bears’. This is the story of a little girl with golden locks of hair who confidently walks into a home of a family of bears who aren’t at home and checks out her compatibility with their different sized chairs and beds. Of course, she eats all their porridge and does get caught in the end but indeed is the idea behind naming these special planets Goldilocks planet. 

A Goldilocks planet is all about the idea of finding a world that is possibly habitable by carbon-life forms, based on similar features and conditions that exist on Earth. This is extremely difficult to find despite the fact that the universe is limitless and scientists have found only a few possible Goldilocks planet with Earth-like living conditions. You could watch or recollect your memories of watching Christopher Nolan’s science-fiction opera, ‘Interstellar’. It has the concept of Goldilocks planets well explored.

How is Gold investment a Goldilocks Planet?

The immediate idea to buy and sell or trade gold would require a jewellery store or a bank. What if these options aren’t available due to circumstances that could vary from the store is too far to you are sitting at home due to a lockdown? You will need to find a Goldlick alternative for Gold. Digital Gold is not just the answer but it could be possibly a better alternative to regular Gold in multiple ways. However on the contrary in the literal sense of Goldilocks planets, there is no place like home when it comes to Earth and no matter how many Goldilocks planets there are in the universe, bursting with life, Earth is the only home planet we have.

Why is 24K Digital Gold A Better World for Gold Investment?

If regular Gold is Earth, then Digital Gold is a planet like Asgard with narcissistic God-like humanoids roaming around with hammers and staffs with special powers. Not really, that’s not true but in case you want to be an ‘InvesThor’ of Gold, Digital Gold is the right option for the following benefits:

  1. Pay only for 24K Gold: When you buy the jewellery store you are not paying for the gold you are also paying on metals and studded stones and gems. But that is different in the case of buying digital gold. Every rupee you invest is paid to pure 24K gold which has 99.9% of purity ridding it of making charges and precious stones that don’t have any resale value.
  2. The convenience of trading: We are all aware that buying gold can be time-consuming as you need to visit the jeweller, store or bank. With the digital gold investment, you can buy and sell gold online anytime and anywhere as per your comfort. You can even track your gold investment if you are buying gold on our app.
  3. Gold can be converted to cash in seconds: You can easily sell digital gold online anytime and anywhere. As soon as you sell the 24k gold the amount is successfully transferred to your bank account. Where in to liquidate the physical gold you need to visit the seller during the working hours and then you sell the gold.
  4. Zero storage hassles: We all know physical gold needs to be stored in bank locker and vaults, which come with long term expensive storage costs where digital gold saves from such hassles as it stores your accumulated gold in safe and secure vaults.
  5. Digital Gold investment doesn’t have to be a big amount: The best part about buying Gold online is that you do not have to buy large amount of Gold unlike at the stores and keep accumulating it over time by buying small amounts at a time. For example, on our app, you can buy gold for as low as ₹1000 at a time, regardless of what the price of Gold is at the time.

While you can be an ‘InvesThor’ of Gold on our app, do not forget that the most simple life forms are the most powerful and that a Goldilocks planet of gold investment requires simplicity like the scientifically almost immortal amoeba, to thrive.

‘We’re made of star stuff’ – Carl Sagan

5 Things You Oughtta Know About Health Insurance

5 Things You Oughtta Know About Health Insurance

In recent times, health has become the forerunner of people’s concerns with the pandemic affecting our lives and changing it forever, as a slow vengeful apocalypse brought to us by our self-destructing capacity. No, it isn’t that grim. We will thrive and do just fine but what really is important at this time is to understand is the importance of health and medical treatment. We cannot take medicine for granted anymore and health insurance is no longer a want but a necessity. So, if you are planning to get health insurance, go for it but you must keep a few things in mind.

5 Things to Note Before You Choose Your Health Insurance 

Just as it is with any other insurance product, there are things one needs to keep in mind about health insurance in general:

1. Variety of health insurance: There are a plethora of types of health insurance available in the mediclaim market. While some cover just your hospital bills, there are comprehensive plans that cover you up to the age of 100. They are referred to as, senior-citizen health cover. Of course, the premium prices vary based on the plan you choose. There is health insurance that simply covers critical illness as well.

2. Exclusions in coverage: Generally, this is the last thing to talk about. However, considering that time is a precious commodity, it is wiser to start with the idea of what health insurance doesn’t cover to set your expectations from this product correctly.

  1. Pre-existing diseases are not treated as soon as you purchase of the policy
  2. A waiting period is applicable to pre-existing diseases.
  3. For a few conditions, the amount assured to pay may vary around 10%
  4. Treatment for the use of intoxicants (alcohol and drugs) are not included in most cases.
  5. A waiting period for maternity/newborn baby expenses is generally applicable, however, the waiting period time varies based on the providers.
  6. A waiting period for weight-loss medical procedures such as bariatric surgery may be applicable in some policies. 

3. Work and Individual Health Insurance:  It is essential to note that while people don’t need to pay for the group health insurance that the employers cover their employees under, it may not be enough if one loses their employment suddenly or has a higher cover amount requirement due to pre-existing diseases. Individual or personal health insurance is essential to be taken in these times to protect yourself financially against any medical issues. You can also buy family health insurance that covers all the members of your family and falls cheaper against individual coverage.

4. Premium costs: The better your lifestyle and the younger you are, the more pocket-friendly your premiums for a health policy will be. However, it is crucial to keep in mind that premium costs also rise with the features and benefits it covers you for. You can always negotiate your way to reduce the premium costs by choosing a plan with lesser features. For example, some health insurance covers you for air-transport to and from the hospital. If you find that unnecessary there are plans which cover you for road ambulance costs as a feature.

5.Read the policy wordings: You cannot be 100% informed about the product you choose unless you make the effort too. So, it is advisable to go through your policy wordings. You don’t want to be troubled at the time of the claim process.

In the end, it boils down to how detailed you want your policy to cover you. If you are looking for options in terms of the type of coverage in health, you can check our health insurance section on our app since we have everything from basic hospital insurance to comprehensive health covers to even critical illness insurance. All you need is to download our app or connect with us.

Category Update: Arbitrage

Arbitrage Finity

What’s happening in arbitrage funds?

Arbitrage funds spreads turned negative for the first time. A spread is the difference between the price of stock and the price of its futures contract. Arbitrage funds delivers returns from a positive arbitrage spread and gives negative whenever there is negative spread.

How future prices converge with the spot price

Spot price Finity


What was the primary reason for such negative spread?

If you look at May end series, market-wide rollovers stand at 91% (vs. average rollovers of 86% seen in last 3 series). Stock future rollover stand at 94% (vs. average rollovers of 90% seen in last 3 series).
Due to this pressure from arbitrage players over short roll overs, spread across stocks dipped into negative zone from over 20bps. Even the large inflows in last two months and lower interest rates have also contributed to the dip.

How do we look at it?

Amid such environment we all know that the arbitrage fund may generate lower returns over the next couple of weeks, however one should not forget that the market volatility during the May 2020 helps funds managers capturing better arbitrage opportunities by churning the portfolio in between. Hence, the actual returns are better than the spread captured on expiry days. One should ideally invest in arbitrage funds with at least 3-6 month’s investment horizon for stable investment experience.

Key Takeaways:

Existing Investor: Nothing will change for existing investor, they should stay invested for a horizon of 3-6 months.

For new investor who has time horizon of 3-6 months can definitely look at arbitrage funds cause they may generate better yields compared to liquid funds on a post-tax basis.

We believe that in couple of weeks the situation should normalize.

eye of an investor Finity

Pessimists sound smart; optimists make money”, who are you?

Who are you Finity

Indian equities ended the week positive. Nifty and Sensex were up by 6.0% & 5.7%, respectively. Investors seem to have welcomed the Unlock 1.0 warmly.

The Unlock 1.0 seems to have achieved what most policy reforms couldn’t – the return of bulls residing abroad. Unlike recent times, the uptick was supported by foreign institutional investments. Markets witnessed an influx of ~INR 22,000 Cr. this week.


Key happenings of the week that went by

Forex reserves keep climbing

The RBI on Friday announced forex reserves in the country for the week ended on 29th May surged to its all-time high of ~$493 billion. One of the key drivers of the recently heightened forex reserves was the lower cost of oil, a major expense on the forex front.

The reserves which are the backbone of the country in uncertain times like these saw an increase of ~$3.4 billion
in the mentioned week.

IMD’s expects rainfall to be at 102% of its long period average compared to 100% earlier.

It has only added to cheer and markets responded positively to it.


Positive Corporate Earnings:

Britannia Net Profit increased 26% to Rs374.75 crore

Britannia Industries reported consolidated profit of INR. 374.75 Crore for March quarter, registering a 26.1 percent yoy growth driven by lower tax cost (down45percentYoY).

Aurobindo Pharma’s net increased 45% to INR. 850 crore in Q4FY20

Aurobindo Pharma consolidated net profit grew by 45.2 percent to INR 849.8 crore for the quarter. Diversified product basket helped company to maintain the growth momentum in core geographies like USA and Europe. Net Debt stood at US$359mn as against US$724 mn in Mar-2019.

SBI posted a Q4 net profit of INR.3, 581 crore

The profit was supported by one-time gain of INR. 2,731.34 crore from the stake sale in SBI Cards done during the quarter.

Life ahead – at least in the near term

Indian equities are currently playing catch-up and the sentiment is likely to percolate to stress sectors. Small and Midcaps are likely to witness buying interest. Markets witnessed buying from FPIs and DIIs on improved sentiments.
Hence, investors may deploy fresh funds at current levels keeping in mind appropriate diversification and individual risk-taking abilities. Going ahead, the flow of liquidity in the Indian markets will give hint of a possible long-term direction. The markets will focus on the US Fed interest rate decision, IIP for April and inflation data for May among few data point to be released next week.

Star Fund Categories

1W return

Mutual Fund news:
1. Mirae Asset Mutual Fund has launched Mirae Asset Arbitrage fund on 3rd June 2020 and the NFO will be
open till 12th June 2020.

Finsight (8th June to 12th June 2020)


Indian markets ended on a positive note. Nifty and Sensex both were up by 6.0% and 5.7% respectively.

Weekly Capsule

– Domestic Markets Zoom as country prepares to reopen

Indian benchmark Indices surged by more than 5% for the second week running, mainly on the back of normalcy being reinstated after the biggest and strictest lockdown in the world was in place since March 25. The FIIs faith in India recovery story was seen for the second week running as they poured ~20,000 crore in the equity markets.

– President approves insolvency suspension

The president on Friday, gave his approval to the suspension of 3 sections under the Insolvency and Bankruptcy Code which will not take into account any debt defaults after 25th March, the day since national lockdown was announced. The moratorium period is currently 6 months with a further extension not more than one year awaited in the near future.

– Forex reserves keep climbing

The RBI on Friday announced forex reserves in the country for the week ended on 29th May surged to it’s all-time high of ~$493 billion. The reserves which are the backbone of the country in uncertain times like these saw an increase of ~$3.4 billion in the mentioned week. One of the key drivers of the recently heightened forex reserves was the lower cost of oil, a major expense on the forex front

Nifty at glance

nifty 1

Nifty 2

Mutual Fund news:

Mirae Asset Mutual Fund has launched Mirae Asset Arbitrage fund on 3rd June 2020 and the NFO will be open till 12th June 2020.


Going ahead, the flow of liquidity in the Indian markets will give hint of a possible long term direction. The markets will focus on the US Fed interest rate decision, IIP for April and inflation data for May among few data point to be released next week.

Finsight 1st June to 5th June 2020

Finsight fisdom

Indian Equity Markets ended on a positive note for the week. Nifty was up 6.0% and Sensex by 5.7% respectively.

Weekly Capsule

– Q4 GDP numbers show buoyancy

The GDP data for the quarter ended on 31st March was published on Friday by the NSO. The GDP grew by 3.1% even with lockdown restrictions taking away half of the March month and taking the FY 20 tally to 4.2%. The data can be disheartening if looked at in isolation, but compared to developed countries like Japan and Italy which saw a contraction in GDP for the same period.

– FDI inflows surge by 14% in FY20, at record level of $50 billion.

On the back of government’s untiring efforts to make India as the new hub to attract foreign investments, the FY20 witnessed a sharp surge in the FDI excluding reinvested earnings by 14% at $50 billion. Including the reinvested earnings, the FDI figure stood at $74 billion. Singapore lead the charge with investments worth $14.7 billion with Mauritius coming second with $8.2 billion in investments.

– FIIs back in action.

The last week witnessed foreign institutional investors emerge as net buyers by a figure ~2 thousand crore more than Domestic Investors. The FII infusion was the key driver for the markets in last week which witnessed a sharp rise by ~6%. The involvement of FIIs also shows that Indian arkets are again becoming attractive for foreign investors even when the country is under the most stringent lockdown since past 2 months.


Nifty at glance


Finsight 1

Mutual Fund News:

Gopal Agarwal quits DSP Mutual Fund: Veteran fund manager Gopal Agarwal announced his exit from DSP Mutual Fund. The fund manager was managing marquee funds like the DSP Top 100 equity, DSP focus fund and equity investments in hybrid funds like the DSP Equity Savings.


Going ahead in the upcoming week markets will take cues from the ending of lockdown. If the lockdown extends obviously there is going to be increased pressure on financial system and hence impact on the overall stock market reaction. Given that markets are forward looking, all the sector specific ifs and buts have already been factored in the current prices.

India Lockdown: Here’s How Truth Hides in Plain Sight!

india lockdown Finity

No task is impossible; no path is difficult; if our resolution is strong. We have to be
dedicated to make ourselves self-reliant.

This magnificent building of self-reliant India will stand on five pillars namely
economy, infrastructure, technology, demography and demand.

– PM Narendra Modi

India Lockdown has been an extremely sensationalised topic for long.

Armchair analysts & social media enthusiasts have taken to sharing their not-as-much-as-two-cents on how the lockdown is going to spell doomsday for the Indian economy and wealth erosion. However, does not seem like many are taking efforts to observe beyond the chaos.

The pandemic, not just the lockdown, will obviously impact world economies. “World” being the keyword – India is not an isolated case. But what really matters is how are economies dealing with the current situation and what is it that is going to help push towards a faster economic recovery.

There is no argument against the fact that the pandemic (including the lockdown) has impacted businesses. Many misconstrue the lockdown as a reason for the economic slump but fail to realise that the lockdown, in fact, has acted as a gunshot wound to an otherwise death-pill in the waiting. The lockdown should be viewed as an act of socially responsible & proactive measure more than an economically painful decision.

As we enter Lockdown 5.0, here is a brief account of how the Indian economy is utilising the time to nurse past wounds and focusing on the nutrition required along with how investors are viewing the progress amidst lockdown.

Lockdown 1.0

lockdown 1.0

Key Measures:

1. Stimulus Package: India announced Rs 1.7-lakh-crore ($22.5 Billion) relief package to take care of poor, workers and those who need immediate help amid the lockdown to combat the coronavirus pandemic.

2. MPC Actions: Reduced the policy rate by 75 basis points to 4.4% and reverse repo rate by 90bps to 4%. CRR reduced by 100 BPS to 3% for all banks

3. LTRO 1.0: Auctions of targeted term repos of up to three years tenor for a total amount of up to Rs 1 trillion (0.7%of GDP)

4. MSF: Under MSF banks can now borrow an additional 3% of NDTL (vs 2% earlier). This will potentially infuse Rs 1.37tn (0.6%of GDP)

5. Moratorium: Moratorium of 3 months on payment of instalments in respect of all term loans outstanding as on March 1, 2020 permitted.


Lockdown 2.0

Lockdown 2.0

Key Measures

1. RBI Lower rates: RBI lowered the reverse repo rate by 35 bps to 3.75%.

2. Targeted LTRO 2.0: RBI announced a second targeted LTRO of Rs 50 thousand crore on April 17, with a focus on NBFCs and MFI’s.

3. Refinance facilities: Provide special refinance facilities for a total amount of Rs 50 thousand crore to NABARD, SIDBI and NHB to enable them to meet sectoral credit needs.

4. State Finances: Increasing the state’s ways and means to combat the virus threat by availing advance limit to 60% until end September – providing a temporary help to states

5. Liquidity for Mutual Funds: RBI decided to open a special liquidity facility for mutual funds of Rs 50 thousand crore. Funds availed under the SLF-MF shall be used by banks exclusively for meeting the liquidity requirements of MFs


Lockdown 3.0

Lockdown 3.0


Key Measures
1. The Asian Infrastructure Investment bank has approved a loan of $500 million to support India’s effort to fight covid-19.

2. 20 Lakh Crore Stimulus Package for Self-Reliant India.

3. Government plans to privatise PSUs in non-strategic sectors and suspend loan defaulttriggered bankruptcy filings for one year and increased minimum threshold to initiate

4. Insolvency threshold upped to 1 Cr from 1 Lakh. Also raised borrowing limits for states for the current fiscal to 5% of GSDP from 3%, given headroom of Rs.4.28 trillion.


Lockdown 4.0

Lockdown 4.0

Key Measures

1. RBI cut the repo rate by 40 bps to 4%. Reverse Repo reduced to 3.35% from 3.75%. This rate cut is expected to bring down the lending and deposit rates.

2. Loan moratorium: RBI extended loan moratorium by another three months until August 31. Relief to borrowers and companies those have had dues on working capital.
3. Increase in export credit period to 15 months from 1 year and buttressing EXIM Bank through INR. 15,000 Crore line of credit.

Other Notable Developments During the Lockdown:

1. In the last few weeks, Jio Platforms, which includes RIL’s internet services, has attracted $10.5 billion in investments from top-tier global VCs and PEs, valuing the entity at over $65 billion. This is higher than the valuations of internet economy giants like Zoom ($42 billion), Uber ($35 billion), Twitter ($34 billion), and Airbnb ($26 billion).

2. Indian Pharmaceutical companies was faster clearance for some of the manufacturing units of the Indian Pharmaceutical companies (Lupin, Dr Reddy’s Lab, Strides Pharma, Biocon, Aurobindo Pharma and Natco) by the United States Food and Drugs Administration (USFDA) in the month of April 2020, especially when supply-chain disruptions due to the Covid-19 pandemic were causing drug shortages across the world

3. For the first time in 2020, net inflow form Foreign Portfolio Investors turned positive (INR 11,718 Cr.) in May 2020


At A Glance: India in Lockdown; Investors Reinstate Faith as India Prepares For Recovery

Lockdown data Finity

Smart investors, globally, are playing the Great Indian Recovery Story with a solid investment plan. Others are choosing to be fence-sitters with no real plan. You know who will win at the end.
You have a choice. What is it going to be?

A Beginner’s Guide to Term Life Insurance

Term life insurance Finity

We hear about this type of plan so much on the television with random celebrities giving us advice on how crucial it is to get one, sometimes in the form of Yamraaj and sometimes this nosy friend who is ready to give you random advice. However, the truth is, if you have dependants and regardless what age you are at, term insurance is not just a convenience but a necessity too. But before we get into why is it worth. Let us understand the idea of a term plan.

4 Things You Ought to Know About Term Plans

The term insurance plan offers you a life cover. It is a simple life insurance plan that promises to pay a sum assured if the policyholder dies during the policy period. If he outlives the term there is no maturity benefit.

  1. Since a term plan doesn’t offer any return and only provides risk cover it is less expensive.
  2. The sum assured in the term plan is high. That is possible because it covers the risk, by fulfilling the need for protection.
  3. In term insurance, the nominee receives the sum assured in a lump sum, or in equal instalments or a contribution in case of the death of the person during the policy period.
  4. The policyholder has the option to customize the payment option based on the family needs.iIt can be a lump sum, monthly or combination of both.

Why Choose A Term Plan?

  1. It is the simplest form of life insurance to understand and maintain.
  2. Term insurance is a good idea for people who are building a family i.e. getting married or planning a family.
  3. It costs lesser initially when compared to an endowment plan.

3 Factors to Consider When Taking a Term Plan

  1. Coverage Amount: You need to buy insurance for all the debt. Each time you take a large loan – usually a home loan, sometimes on a personal loan – buy a term cover for the full amount for the loan that you take.
  2. When to get a term plan: Buy as soon as you have dependents or the possibility of getting dependants. Touching thirty is usually a good time to buy the cover. You are old enough to have a good income flow and not that old for covers to be too expensive. The cost of life cover rises exponentially as you age.
  3. How Does it work: Term insurance is the simplest life cover. You pay a premium and in a term, if the policyholder expires, the insurance company provides the cheque to the nominated. If its the long term plan, you will get your cover till your retirement.

Where Can You Get Term Life Insurance?

Simply download Finity app. Browse through our insurance section and choose Term Life Insurance to get a life cover in the comfort of simply wherever you are. You can even get a free callback from our insurance experts who will not only help you choose the appropriate policy but also help you make an informed decision.

Myway Wealth is now Finity!