The Crucial Role of Financial Literacy in Modern Society

In today's rapidly evolving world, financial literacy is a fundamental skill that empowers individuals to make informed decisions about their finances, plan for the future, and achieve their financial goals. While financial literacy is important for everyone, its significance is particularly pronounced for women. In this blog, we'll explore the role of financial literacy for women in modern society, highlighting the benefits it brings and how it can pave the way for greater financial independence and empowerment. Additionally, we'll discuss the opportunities available, such as part-time jobs for ladies, and the importance of understanding options like personal loans for females.

Understanding Financial Literacy for Women:

Financial literacy encompasses a range of skills and knowledge, including understanding budgeting, saving, investing, managing debt, and planning for retirement. For women, being financially literate is essential for several reasons:

Financial Independence: Financial literacy empowers women to take control of their financial futures, reducing dependence on others for financial support and decision-making. It enables them to build their wealth, pursue their goals, and navigate life's financial challenges with confidence.

Equal Opportunities: In many societies, women still face disparities in income, employment opportunities, and access to financial resources. Acquiring financial literacy for women can level the playing field and seize opportunities for career advancement, entrepreneurship, and economic empowerment.

Risk Management: Financial literacy equips women with the knowledge to effectively manage financial risks and protect themselves against unforeseen events such as job loss, illness, or divorce. It enables them to make informed decisions about insurance, emergency funds, and other risk-mitigation strategies.

Planning for the Future: From saving for retirement to planning for major life events like buying a home or starting a family, financial literacy enables women to set realistic financial goals and develop actionable plans to achieve them. It provides the foundation for long-term financial security and stability.

Part-Time Jobs for Ladies:

Part-time jobs offer women flexibility, supplemental income, and valuable work experience. In today's gig economy, there are numerous part-time job opportunities tailored to women's skills, interests, and schedules. Some popular part time job for ladies include:

Freelancing: Women with skills in writing, graphic design, programming, or marketing can explore freelancing opportunities on platforms like Upwork, Freelancer, or Fiverr. Freelancing allows them to work on projects remotely and set their own hours.

Consulting: Experienced professionals can leverage their expertise by offering consulting services in areas such as business, career development, marketing, or finance. Consulting offers flexible hours and the opportunity to work with diverse clients.

Online Selling: Women interested in entrepreneurship can start their own online businesses by selling handmade crafts, vintage items, clothing, or beauty products on platforms like Etsy, eBay, or Shopify. Online selling allows them to reach a global audience and manage their business from home.

Tutoring: Women with teaching experience or expertise in a particular subject can offer tutoring services to students in their local community or online. Tutoring provides flexible hours and the satisfaction of helping others learn and succeed.

Understanding Personal Loans for Females: 

Personal loan for female can be a valuable financial tool for women seeking to fund various expenses, such as education, home improvements, or unexpected emergencies. However, it's essential to understand how personal loans work and their implications: 

Interest Rates and Terms: Before applying for a personal loan, women should compare interest rates, loan terms, and repayment options from multiple lenders to find the most favorable terms. Understanding the total cost of borrowing and the repayment schedule is crucial to avoid overextending financially.

Credit Score: Lenders evaluate applicants' creditworthiness based on their credit score, income, and debt-to-income ratio. Women should review their credit reports regularly, identify any errors or discrepancies, and take steps to improve their credit scores if necessary before applying for a personal loan.

Borrowing Responsibly: While personal loans can provide quick access to funds, women should borrow only what they need and can afford to repay comfortably. It's important to have a clear purpose for the loan and to avoid using it for discretionary expenses or non-essential purchases.

Repayment Strategies: Women should develop a repayment strategy to pay off the loan efficiently and minimize interest charges. Making regular, on-time payments and considering options such as automatic payments or bi-weekly payments can help accelerate debt repayment and improve financial stability.

Conclusion:

Financial literacy is a cornerstone of women's empowerment and economic independence in modern society. By equipping women with the knowledge and skills to manage their finances effectively, financial literacy opens doors to greater opportunities, security, and freedom. From understanding part-time job opportunities to navigating options like personal loans, women can take control of their financial futures and build a solid foundation for success. As we continue to strive for gender equality and economic empowerment, investing in financial literacy for women is not just a necessity but a catalyst for positive change and progress.

Is Life Insurance tax-free in Canada?

Life Insurance plays a crucial role in providing financial protection and security for individuals and their families. However, amidst the various benefits that Life Insurance offers, questions often arise regarding its tax implications. Specifically, many wonder: Is Life Insurance tax-free in Canada? In this comprehensive guide, we'll explore the tax treatment of Life Insurance in Canada, shedding light on key considerations, exemptions, and how Life Insurance plans can impact your financial strategy.

Understanding Life Insurance in Canada

Before delving into the tax implications, let's first understand the basics of Life Insurance in Canada. Life Insurance is a contractual agreement between an individual (the policyholder) and an insurance company, wherein the insurer promises to pay a designated sum of money (the death benefit) to the policyholder's beneficiaries upon the insured individual's death. This financial protection provides beneficiaries with financial support to cover expenses such as funeral costs, mortgage payments, and ongoing living expenses.

Tax Treatment of Life Insurance Death Benefits

One of the primary concerns for individuals considering Life Insurance is the tax treatment of death benefits. In Canada, Life Insurance death benefits are generally tax-free. This means that beneficiaries receive the full amount of the death benefit without having to pay income tax on the proceeds. This tax exemption applies regardless of the size of the death benefit or the type of Life Insurance policy.

Exemption from Probate Fees

In addition to being tax-free, Life Insurance death benefits are also exempt from probate fees in Canada. Probate is the legal process through which a deceased individual's estate is settled and distributed according to their will. Probate fees, also known as estate administration taxes, are levied on the value of the deceased person's estate and can be significant. However, Life Insurance death benefits bypass the probate process entirely, ensuring that beneficiaries receive the full amount of the proceeds without deduction for probate fees.

Tax Treatment of Cash Value Accumulation

While Life Insurance death benefits are generally tax-free, the tax treatment of cash value accumulation within Life Insurance policies varies depending on the policy type. Whole Life Insurance policies, for example, accumulate cash value over time, which policyholders can access through policy loans or withdrawals. In Canada, the growth of cash value within a whole Life Insurance Policy is tax-deferred, meaning that policyholders are not required to pay tax on the cash value growth until they withdraw funds from the policy.

Taxation of Surrender Values

If a policyholder surrenders or cancels their Life Insurance policy before the insured individual's death, any cash value or surrender value received may be subject to taxation. The taxation of surrender values depends on various factors, including the amount of cash value accumulated, the premiums paid, and the policy's terms and conditions. It's essential for policyholders to consult with a tax advisor or financial professional to understand the tax implications of surrendering a Life Insurance policy in Canada.

Tax Treatment of Premiums

In Canada, premiums paid for Life Insurance policies are generally not tax-deductible. This means that policyholders cannot claim a tax deduction for the premiums they pay on their Life Insurance coverage. However, the tax-free nature of Life Insurance death benefits and the exemption from probate fees make Life Insurance an attractive financial planning tool for estate preservation and wealth transfer.

Integration with Estate Planning

Life Insurance plays a vital role in estate planning, allowing individuals to transfer wealth to their beneficiaries tax-efficiently. By designating beneficiaries and structuring Life Insurance policies strategically, individuals can ensure that their loved ones receive financial support without the burden of taxes or probate fees. Life Insurance plans can be integrated into broader estate planning strategies to maximize tax efficiency and achieve long-term financial goals.

Choosing the Right Life Insurance Plan

The most important thing about Life Insurance is that it protects people and their families financially. However, with various types of Life Insurance policies available in Canada, selecting the right plan can be daunting. To help you navigate this decision-making process effectively, it's essential to understand the different options and factors to consider. Here's a comprehensive guide to choosing the right Life Insurance plan tailored to your unique financial needs, objectives, and circumstances.

Understanding Your Options

Before diving into the specifics, let's explore the three primary types of Life Insurance policies available in Canada:

• Term Life Insurance: Term Life Insurance provides coverage for a specified period, typically ranging from 10 to 30 years. It offers a straightforward death benefit without cash value accumulation, making it a cost-effective option for individuals seeking temporary protection.

• Whole Life Insurance: Whole Life Insurance offers lifelong coverage with fixed premiums and guaranteed cash value accumulation. It provides stability and certainty, making it suitable for long-term financial planning and estate preservation.

• Universal Life Insurance: Universal Life Insurance combines a death benefit with a savings component, offering flexibility in premium payments and death benefit adjustments. It caters to individuals seeking both insurance coverage and investment opportunities.

Evaluating Your Needs and Objectives

When choosing a Life Insurance plan, it's crucial to assess your financial needs, objectives, and circumstances. Consider the following factors:

• Coverage Duration: Determine how long you need coverage. If you have temporary financial obligations such as a mortgage or children's education expenses, term Life Insurance may suffice. For lifelong protection and estate planning, consider whole life or universal Life Insurance.

• Budget and Affordability: Evaluate your budget and premium affordability. Term Life Insurance typically offers lower premiums initially, making it suitable for individuals on a tight budget. Whole life and universal Life Insurance may involve higher premiums but offer long-term value and financial security. 

• Risk Tolerance: Assess your risk tolerance and investment preferences. Whole Life Insurance provides guaranteed cash value accumulation, offering stability and predictability. Universal Life Insurance offers flexibility and investment opportunities, appealing to those comfortable with market risk. 

• Financial Goals: Consider your long-term financial goals and objectives. If you're primarily focused on providing financial protection for your family, term Life Insurance may suffice. If you're looking to build wealth and preserve your estate, whole life or universal Life Insurance may be more suitable.

Consulting with a Licensed Professional

Navigating the complexities of Life Insurance requires expertise and guidance. Consult with a licensed insurance advisor or financial professional to discuss your options and develop a tailored insurance strategy. An experienced advisor can help you:

• Understand the features and benefits of each type of Life Insurance policy.

• Assess your insurance needs and financial goals. 

• Compare quotes and coverage options from reputable insurance providers.

• Navigate the underwriting process and ensure proper policy implementation.

Conclusion: Leveraging the Tax Benefits of Life Insurance in Canada

In conclusion, Life Insurance enjoys favorable tax treatment in Canada, with death benefits generally being tax-free and exempt from probate fees. The tax-deferred growth of cash value within whole Life Insurance policies further enhances the tax efficiency of Life Insurance as a financial planning tool. By understanding the tax implications and integrating Life Insurance into your estate planning strategy, you can leverage its benefits to protect your loved ones and preserve your wealth for future generations. Consult with a qualified insurance advisor or financial professional to explore Life Insurance plans and develop a comprehensive financial strategy tailored to your needs and goals. With the right guidance, you can make informed decisions and achieve peace of mind, knowing that your financial legacy is protected.

Is it legal to pay off debt with a credit card?

Have you ever found yourself wondering ''How did I get myself into this debt?'', wishing you had that car insurance before the accident?

Unfortunately, we cannot turn back time, but we can offer you solutions for paying off your debt.

Even though it would be great if we could pay off one credit card with another credit card, that is not exactly the case.

Paying off a credit card with another credit card

This is, unfortunately, not possible. Bouncing the debt between two credit cards may be the simplest solution that crosses your mind, but in reality, credit card companies don't allow you to pay off your balance with another credit card.

Luckily, there is another kind of similar option you might be interested in. We are talking about balance transfer and cash advances – two ways of making that debt go away forever!

Balance transfers

This is a very quick way of transferring your debt from one credit card to another with a lower interest rate. Before you do this, calculate!

Debt transfer to a card that offers you more financial benefit can often hide additional fees and expenses, so you might end up with the same paying amount.

Through this process of paying some benefits, be careful – a lot of people don’t know what exactly they are paying for. Exercise your rights and monitor the Packaged Bank Account situation.

Pros for balance transfers

If you are looking for saving your money in the long run, balance transfers are a great tool! Some credit cards have better reward programs and perks, so don't miss it.

Starting with an interest-free period, credit card companies give you 12 to 18 months to convince you to transfer your balance.

Cash advance

If you are looking for the fastest way out, this is the solution that can help you in your intention.

Considering your line of credit, you can take a cash advance out with the help of credit issuers. Be aware of the fact that borrowing amount will add up to your owing amount at the end of every billing cycle!

This is a solution with a higher risk than balance transfers. However, taking that risk may pay off in the end!

Keep in mind expenses and fees – even though this is the fastest way out, it comes with its price.

Pros for cash advance

As said before, the biggest advantage of cash advances is saving time. This can be done very quickly and you could pay off your debt as soon as possible.

Getting the cash advance immediately can decrease your stress and reduce your worries!

So which one is a better solution?

Considering all the pros and cons of these two solutions, there is no right universal answer. Weigh the relevant factors and consider your abilities.

If you want to pay your debt as soon as possible, a cash advance may be your route. On the other hand, a safer and cheaper option is balance transfers, but they take time.

Disease-Free But In Debt? Ways to Pay Off Medical Debt After COVID-19 and Other Conditions

The COVID-19 crisis has affected every area of our lives--not only our health, but also our finances. If you’re someone who has gone through getting sick with COVID-19 or other illness that required hospitalization, your burden may even be heavier. NBC news reported that many patients received unexpected medical bills after recovering from the novel virus, as their documents state several out-of-pocket expenses not covered by their policies.

The case isn’t isolated with COVID-19 patients. With hundreds of thousands of insurance claims during this challenging time, a lot of companies are trying to keep up fulfilling these policies. Even after COVID-19 recovery, many families and individuals are faced with out-of-pocket medical debt, on top of unemployment, and other personal struggles related to the effects of the pandemic.

Thankfully, there are ways to be strategic in your finances when trying to pay off medical expenses. Below are some tips that could help.

Ensure mistake-free medical bill

Have you received a medical bill that made you fall off your chair, literally? Perhaps it is time to reassess the balance and confirm if the bill is accurate. Since there is a surge of patients for COVID-19 along with others being treated for non-related conditions, there may be cases where some of the input in people’s bills was a mistake.

Read through your balances and check the procedures and medications provided, and see if there is anything unclear. You can call the billing department of your hospital to ask for a re-calculation or clarification if there’s a particular matter to be settled.

Reconfirm your insurance coverage

If you have a health plan, it is ideal to read through your policy again and look for information about the coverage you have for the condition. Some insurance companies may need extra clarification about the treatments or medications you took, which turns out to be covered by your policy. The federal government is even asking insurance companies to be more transparent about the policies they offer to avoid confusion with clients.

To settle matters, you may call your insurance provider and ask about the non-covered items in your medical bill. Given the right information, they may consider to cover some of the expenses which are actually stated in your policy, but were missed when preparing your out-of-pocket bill.

Don’t use credit cards

Tempted to pay off your medical debt using credit cards? It may not be the best option. Many cases happen where people get into a never-ending cycle of credit card debt with high interest, and you don’t want to be in that situation.

What are some of the disadvantages of paying through credit card?

• High-interest payments: A lot of credit card companies have staggeringly high interest annually. If you cannot realistically pay the rates, do not give in settling for a credit card debt.

• Affects your credit score: Having unpaid credit card debt lowers your credit score, even making it more difficult to secure a low-interest payment plan.

• Other options for medical debt: Unlike other types of debt, medical bills are more negotiable and flexible by nature. You can use no interest or low-interest payment options, so it is ideal to explore more routes.

Choose no interest or low-interest payment plans

Having access to healthcare is a basic human right. Thus, it is justified that medical debt should be paid with no interest or low-interest rates as much as possible. There are several options you can choose from when looking for an affordable medical debt payment plan:

Hospital or healthcare facility offer

Your own hospital or healthcare facility may have payment options that are interest-free or longer terms that make monthly payments more realistic. An article published in Modern Healthcare revealed that some major hospital networks offer a wider level of financial assistance for patients that fit eligibility requirements.

If your medical bills overwhelm you, it is best to get in touch with your hospital or healthcare facility if they have any affordable payment plans.

Interest-free financing companies

There are also other financing companies that specialize in medical bills. They have payment plans which are interest-free for a period of time, making it possible for you to pay medical debt as affordably as possible.

In fact, you can use these financing options not just for COVID-19 hospitalizations, but for other healthcare facilities such as rehabs for alcoholics and urgent care centers.

Personal loans

Taking out a personal loan can be done for a variety of reasons, such as covering out-of-pocket medical expenses. The great thing about this type of financing is the flexibility and the amount of companies offering this option. If you have a good credit score, there is a higher chance that you’ll secure a low-interest personal loan plan.

However, if you have a less-than-stellar credit score, there are still ways to secure affordable personal loan options. You can compare rates and see which one fits your budget depending on your credit score.

Paying Off Medical Debt? You Can Do It!

Paying off out-of-pocket medical expenses may be challenging, but using these strategies can make this undertaking so much easier. Make sure to clarify your bill, negotiate with your insurance provider and explore affordable options to get the best payment plan.

Avoid shady lenders and loan scams – How to remain aware

There is no doubt about the fact that the internet makes everything easier and you should deem yourself to be tech-savvy if you want to accomplish tasks online. With the advancements in the fields of technology and the development of apps, everything from paying off your bills to ordering your pizza can be done online. However, did you stop to think that ordering a loan online will have higher stakes as because you need to provide private financial information to people whom you don’t know.

The safest way in which you can borrow money online is by ensuring that you’re dealing with a reputable and trustworthy lender. You also need to watch out for the red flags so that you don’t run the two major risks which are:

• Ending up paying a hefty amount: Even though you may grab a loan, you may end up paying a huge amount if you take the loan from a shady lender. On the contrary, if you could take the loan from a reputable lender, you will get the same loan amount for less money.

• Losing money: This is a real risk which has to be avoided by any means. The fake lenders can easily claim the world and charge fees for approving the loan. At the end, you never get what you paid for.

Choosing the right lender

Dealing with a reputable and legitimate lender will safeguard you from several issues. Do your homework by researching on the lenders, reading their positive and negative reviews so that you can get a clear idea on how they help you. You need to keep in mind that everything that you find on the internet is not true. Hence, it is best if you could lend from a lender who is trustworthy and reputable.

Before you hurry up for submitting an application, make sure you check for complaints with the CFPB or the Consumer Financial Protection Bureau which maintains a database of complaints regarding financial products. All these complaints are posted online within a fortnight. As long as reputable referrals are concerned, you have to ask your family and friends who have borrowed. Ask them how things went with regards to the loan program. The closer is your source, the more confident you will be about the reference that he gives you.

You should avoid sources which are less reliable like the following:

• An email out of nothing: If you receive an email where a shady company asks you to take loans from them, don’t fall for them. Spammers usually send such mails to millions and the same is true for someone who comes down at your doorstep for loans.

• Phone calls which are unsolicited: Do you suddenly get calls from a blocked or unsolicited number? Even though it seems that you get the call from a local number, you should avoid such calls as they’re mostly scam.

So, if you’re someone who is eager to know about the different ways in which you can choose a trustworthy lender for your loans, keep in mind the above listed points.

Common Financial Worries Families Face

As you grow older, you start to learn that there are many responsibilities as an adult. With those responsibilities tends to come concerns and worries. It could be anything as small as what you’re going to do on the weekend to something more significant like the future of your family.

One worry that is quite common for many families relates to their finances. At one point or another, you’ve probably caught yourself worrying about your financial situation. Money tends to be one of, if not the top concern for many.

What about finances that make families so concerned? Take a look at some of the common financial worries families face.

Unexpected Expenses

The unexpected is something that can make even the strongest person worry, especially when it comes to finances. Even if you have an emergency fund and are prepared for any expense thrown your way, you’re likely to be still somewhat concerned over if you can or cannot afford it.

A 2017 study from Bankrate found that 24 percent of Americans have no emergency fund set up in case of unexpected expenses. However, only 31 percent say they have enough of a cushion to cover six months of expenses.

Preparing for unexpected expenses can be tricky. For starters, you may need that money right at this moment. However, if you don’t set aside an emergency fund, if the time comes that you do have unexpected expenses, it could throw you deep into debt.

Healthcare and Insurance Costs

A significant financial worry involves your healthcare coverage and insurance policies. Paying for coverage that you either rarely use or hope to not use at all can be frustrating. There are likely many other things that you could use the money for.

When it comes to things like life insurance, for many families it is a necessity that they budget for. Even though they know the expense is coming every month, they may still worry about if they can afford the coverage. If you’re in this situation, there are things you can do to help reduce the cost of your premiums. If you’re looking at getting insurance, shop around and get quotes to find an affordable policy.

Losing an Income

Losing an income can be catastrophic for many families, especially if it is your only source of an income. If you lost your job and didn’t have that income anymore, would you be able to continue with your lifestyle?

The concern of losing an income is a reality for many. However, it is one that could be prevented by that emergency fund mentioned before. Another way to protect yourself against this is by getting the right insurance to help cover expenses.

Paying Off Debt

Another big worry for many is debt. At one point or another in life, you’ve likely come face to face with debt. It could be big or small. Either way though, you're bound to worry about it.

Debt puts a kink in many families plans. It can prevent you from doing something you love or even getting a mortgage for your first home. Trying to pay off debt as quickly as possible is a big worry.

Home Loan Tax Benefits That You Should Know

With the constant rise in real estate prices, it’s become almost impossible for an individual or a family to purchase a house without the help of a home loan.While many are apprehensive about taking a loan because of the kind of interest rates that they come with, what most people are unaware of are the tax benefits that you can enjoy on home loans. If you’ve got a mortgage on your house, you can avail of benefits and deductions under 3 separate sections of the Income Tax Act.

Deduction Under Section 80C: 

If you’ve taken out a loan to purchase a home for which the construction is complete, and you have the completion certificate, you can enjoy deductions on the amount you pay towards repaying the principal amount of the loan. This clause is only applicable for individuals or Hindu Undivided Families (HUF). The maximum deduction under this section is Rs. 1.5 lakhs. It’s important to remember that deductions will not be valid on any repayments made before the construction is complete.

Even if you haven’t taken a loan to purchase a house, you can still enjoy deductions on the amount that you have paid towards the stamp duty and registration fee of your new home.

Deduction Under Section 24: 

When you’re repaying a loan, you will pay a certain, fixed amount to the lender every month as your Equated Monthly Installment or EMI. Your EMI amount is calculated based on the loan amount, the rate of interest, and the tenure of the loan. Typically, your EMI is made up of a principal repayment amount, and an interest amount. The interest amount that you pay is exempt from tax under Section 24 of the Income Tax Act. You can claim this deduction at the start of the year in which the house’s construction is completed. This benefit is also available if you’ve utilized the loan to repair or reconstruct an existing property.Additionally, if you’ve rented out your home, you can claim for a deduction for the interest amount paid all through the year.

Deduction Under Section 80EE: 

When you apply for a home loan to finance your first-ever house, you can get additional tax benefits on the interest payment sunder this section. To claim this deduction, you will be required to provide a statement from your lender which clearly indicates the total amount payable, your principal amount, and the amount paid towards your interest. The maximum deduction you can claim under this section is Rs. 50,000.

Now that you know about the various deductions and claims you can enjoy when you take out a property loan, you should easily be able to determine which benefits apply to you and which ones don’t. If you’re still having trouble understanding how to figure out the deductions, you can use an online tax benefit calculator. The calculator will help you understand how much money you can save despite the fact that you have to pay interest on the loan amount.

Over the years, home loans in India have helped numerous families find the home of their dreams. With so many additional tax benefits to home loans, it’s getting easier for young individuals to put aside enough money for a down payment and then secure a loan to help themselves find their own little place in the world. So, it’s time to put all your worries to rest, and fill out that application for a loan. Your dreams are counting on it.

Benefits that come with a Child Insurance Plan – Find them out

A number of responsibilities and joys mark the beginning of a unique journey for a new parent. Parenting remains shrouded by challenges and at times it seems to be an uphill task. Successful parenting is all about nurturing the child and bringing him up to be a responsible and honest individual.

A parent is always concerned about brightening the future of their child. Security is one word that remains associated with your love for the little one. Right through the initial stages of growth, a child needs financial security. That’s one reason why financial planning is so necessary for securing your child’s future. You must identify the financial needs pertaining to your child’s education when the time is right and you actually feel the need to plan things. You’ll even need to allocate a portion of your savings for his college fees, professional courses and boarding charges among other things. It’s truly crucial for you to make your investments on a timely basis. A number of child education plans are now being rolled out by some of the most eminent insurance providers in their attempt to retain policyholders. A child education plan is also a good way of luring investors that keep an eye on the tax exemptions.

Child Education Plans Offer Benefits that Secure the Future of a Child:

Paying off College Expenses with the Maturity Benefit

Parents often want their children to grow up as successful professionals in the field of medicine, law, architecture, and engineering. In order to become a successful professional, it’s necessary for your children to pursue some professional courses in any of these areas. However, it has become increasingly difficult for you to meet all the expensive course fees for a long duration. You may even be compelled to apply for a children’s educational loan that meets the needs of fulfilling your child’s higher studies. The college fees may be inflated but the investment corpus accumulated during the maturity of a child insurance policy can be substantial if you aren’t wasting any opportunity of investing in such plans.

Escaping Deduction of Capital

The return on investments tends to vary with the fluctuating marketing conditions. You must consider adopting some dynamic allocation strategy for funds if you wish to make the most of your vested amount and keep capital erosion at bay. Certain privileges are offered under child plans in the form of Systematic Transfer Plans and Fund Selection benefits. These benefits enable you to make an investment planning according to your expected outcome through the various stages of your life. With an STP, you can even make the most of market fluctuations by transferring all of your fund units automatically.

Choosing Optional Riders

With some plans, the nominee of the insured person is entitled to achieve a waiver for the entire premium that’s to be met during the coverage tenure. Likewise, certain riders are developed to cover the insured if he suffers from a severe injury or ceases to exist during the policy period.

Meeting the School Fees

About 10% of the sum assured is to be paid by the insurance provider as soon as the parent opting for a child plan passes away. Again, till the end of the policy period, 10% worth the sum assured is supposed to be paid out towards the child’s education periodically every year.

Alongside a lucrative maturity benefit, certain comprehensive life coverage benefits are also offered under a child education plan. Compared to a few distinctive investment plans, there are a few unique advantages of investing in child education plans. While applying for a child insurance plan, you must check out if it yields adequate returns for securing the future of your child. Once you narrow down your choices, there’s nothing restricting you from securing your child’s future.

ULIPs Yield Great Tax Saving Investment Options – Find Out

Several investment options in India have been affected by demonetization and our own spending habits. On the other hand, most of the fixed deposit rates have been lowered by banks post this demonetization drive. Chances are here that the FD rates might drop even further. This is a situation where in all investors are preferring life insurance over other investment options.

ULIPs (Unit-linked Life Insurance Policies) have gained much presence in the investment market as they’re considered to be a much safer means of creating wealth in the long run. Reasons behind the increasing popularity of these ULIPs comprise of their lucrative returns besides their tax saving and protective nature. Out of all the features of a unit-linked insurance plan or ULIP, the most important one seems to be its capacity to invest an individual’s premiums into equity funds as well as mixed debts in different proportions. It doesn’t even yield any tax liability for enacting transfers between separate funds.Besides yielding extra tax-saving advantages for the investors, ULIPs act as a financial tool that links multiple investment options.

Few of the ULIP advantages have been mentioned below:

Deductible premiums

The premiums that are paid for a coverage plan like ULIP get invested with certain financial instruments, debt, and equity. The premium that goes out towards this policy is shown as a deduction under section 80C of IT Act. ULIP premiums may be considered as a deduction from the taxable income up to a certain limit under section 80C. In addition, a ULIP enables the policyholder to pick an asset class and contribute towards his investment planning accordingly. The risk-tolerance of a young investor is much higher and it enables him to follow the more-risk more-return equity investment strategy. To lower your market risks and fetch quality returns, you may pick a mix of financial market instruments, debt, and equity.

Flexibility to change asset classes

A ULIP investor can switch over to a new asset class from the existing one or may even get the funding proportion modified for his current investment in financial instruments, debt or equity.

Non-taxable withdrawals

Apart from the benefits mentioned before, ULIPs may come with great tax saving opportunities against withdrawals. These benefits aren’t meant for the mutual fund investors. Withdrawals may occur when the policyholder needs to withdraw a portion of his investment, when the policy gets maturity or when the policyholder passes away. Death benefit offered by your ULIP isn’t taxable at all. ULIPs show a close similarity to any traditional insurance plan that yields guaranteed financial protection for the dependents of the insured.

Extended coverage

Periodic top-ups offered under ULIPs are a good investment option for individuals possessing excess cash. In a favorable situation, an investor is likely to gain certain tax saving advantages, guaranteed protection, and great returns through different modes of investment like that of mutual funds and life insurance policies. However, it’s quite tough and challenging to strike the right balance between various investment options.

That’s one reason why so many of the modern investors are opting for ULIP and similar combination products. This is certainly an effective option to get your life coverage benefits trebled. Without experiencing any complication and risk of suffering losses, you’ll now be able to enjoy these tax saving options and high ROIs.

5 Ways to Save Tax for Salaried Employees

It is the duty of every citizen of India to pay taxes. As a diligent taxpayer, it is imperative to know about the various deductions and exemptions allowed under various sections of the Income Tax Act, 1961. Besides, there are numerous other methods to reduce your tax liability largely.

Following are five most popular and common ways to save tax for salaried employees in India.

1. Submit medical bills to your employer on time

Most salaried individuals are eligible to receive medical reimbursement of INR 15000 as part of their Cost ToCompany (CTC). Therefore, you may claim a tax deduction for all your medical expenses up to this amount. For this purpose, you may submit all your medical bills, medical reports, lab test bills, or doctor’s consultation bills to your employer. It is important to note that such a tax benefit may be claimed only through your employer, and hence you may submit such bills to your employer on a timely basis.

2. Save tax through House Rent Allowance

House Rent Allowance (HRA) is a common component for many salaried individuals. The rules of tax deduction on HRA are stated in Section 10 (13A), Income Tax Act. The amount that may be claimed as exemption is a minimum of –

a) Actual HRA amount received

b) 50% of the salary in case you live in a metropolitan city or 40% for a non-metropolitan region

c) Excess of rent paid annually above 10% of your salary.

In order to claim deductions on House Rent Allowance, you may submit rent receipts to your employer.

3. Claim deductions under Section 10(14)

The good news for salaried individuals is that they may avail of numerous deductions as per Section 10(14) of the Income Tax Act. You may avail of deduction on children’s education allowance up to a maximum amount of INR 100 a month, per child, up to two children. Besides, you may seek deduction on hostel expenditure allowance of INR 300 a month per child up to two children. You may also claim an exemption on helper or assistant allowance as well as uniform allowance up to the amount of expenses incurred.

4. Invest in medical insurance

You may claim health insurance tax benefits on your health plan. A medical insurance plan is indeed an integral part of financial planning. Besides providing a great degree of financial security during a medical contingency, it also provides tax benefits. You may seek health insurance tax benefits on the premium paid towards your policy. You may claim health insurance tax exemptions on premiums paid for yourself, spouse, parents, and dependent children. According to Section 80D, medical insurancepremiums are exempted up to a maximum of INR 25000. In an event that you or any of the covered members are senior citizens, you may enjoy a higher limit of INR 30000. You may, therefore, avail of such health insurance tax exemptions and reduce your tax liability.

5. Maximize utilization under Section 80C

Section 80C of the Income Tax Act allows a maximum deduction of INR 1.5 lakh. You may claim a deduction on investments made in various financial vehicles such as Public Provident Fund (PPF), Unit-Linked Insurance Plans (ULIPs),National Savings Certificate (NSC), andEquity-Linked Savings Scheme, among others. You may also avail of this section to reduce your taxable income through premiums paid on life insurance plans. Besides, you may claim deductions on tuition fees paid for the education of two children.

The Income Tax Act allows for numerous such deductions and exemptions for salaried individuals. You may, therefore, avail of health insurance tax exemption, numerous investment vehicles, and HRA component of your salary, among numerous others. You may take advantage of them and lower the amount paid towards income tax.

Credit: Is It Always Bad?

Credit gets a bad wrap in financial circles, especially those focused on helping folks get out of debt. However, is getting credit always such a dangerous thing? We’ll investigate below. 

Credit is Good - How The System Works

One reason that credit could be said to be good or at least valuable is that it is the system that allows you to make big-ticket purchases without having the cash to pay for them outright. Yes, OK, in an ideal world we’d all buy our yachts, houses, and vehicles in one single purchase, but in reality, this hardly ever happens. Despite this situation though, we can see get access to these things, and that is largely due to credit. 

Credit is Bad - Can Create Debt

The biggest problem that many people have with credit is the charges that are made to use it. These usually come in the form of interest. This is a fee that you pay on top of the money you owe back. 

The problem here is that if the interest rate you pay is set high or is not fixed, you can end up paying a large sum back, while still not paying off too much of the actual money that you owe. Something that can make it very difficult to get out of debt. 

Credit is Good - Choose To Use It Well

However, it is important to note that the issue with credit isn't strictly cut and dried. In fact, you have to remember that it the credit providers and cards are something that we choose to use. That means if we make a good choice it can be a helpful thing. 

Some people argue that this choice reduces when you don't have a good crediting rating and this forces you to pick credit offer with high repayments rates. However, as you can see from this post, it is just about doing your proper homework and finding the best offers out there to suit your needs. Then you can be in control of your credit borrowing instead of it being the other way around. 

Credit is Bad - Perpetuates The System

Some folks believe that the whole idea of credit is wrong, and it plays into our materialistic society. They suggest that it is something that keeps us in the trap of wanting things that we don't really need or can't afford just because we are exposed to them via adverts all of the time. To them it keeps us trapped in a system that works purely on consumerism and not need.

Credit is Good - Provides For Emergencies 

One factor that the critics of credit often forget is that for many people it is their only recourse when in the midst of an emergency. That means they don't put their grocery shopping on their credit card, and a trip to the mall certainly isn't something that they would use it for either. 

Instead, having access to credit means if they encounter a medical problem, or their vehicle is involved in an accident they can cover this cost. It also means they can pay and it won’t eat into the rest of their budget that is earmarked for other things. 

Yes, sometime it means paying off over a longer period. However, it also means you can set a payment that is affordable and won't interfere with your families everyday life style will still allowing the debt to be paid off. 

Credit is Bad - Lenders don't always check 

Last of all, some people perceive credit as bad because some lender are unscrupulous on who they are lending to. This means they grant credit without doing the proper checks and at a rate that most people struggle to pay off. Something that can cause serious problem for the browser while just making added money for the lender. 

Luckily, the financial industry has clamped down on these sort of lenders recently and the system is much more closely regulated. Something that makes it a lot harder for borrowers to get into unreasonable debt solely by using credit.  

In Conclusion 

Unfortunately, most us cannot change the system or even go against it in our everyday lives. That is why, in conclusion, it is much more productive to see credit as useful service that can help out in emergency situations such as when medical fee need to be arranged, and when we need to make larger purchases. Credit, in fact, could be said to be a good thing for the most part, as long as we handle it correctly.

Importance and Benefits of Cashless Policies

Earlier, insurance providers used to provide reimbursement for all the expenses borne by the insured. However, these days, most insurers offer the benefit of cashless settlement of claims. According to this arrangement, the insurance providers settle all the expenses with their network providers. You, therefore, do not have to make any out-of-pocket expenses towards the huge medical bills.

It is important to note that in order to avail of the benefit of cashless insurance, it is necessary to visit any of the providers in the insurer’s network. You may view the Third Party Administrator’s (TPAs) website to identify the comprehensive list of hospitals or garage networks, in the case of cashless car insurance.

Cashless policies entail a lot of importance. Following are the three major benefits of cashless policies.

1. Prevents financial strain

The major benefit of a cashless insurance policy is that it prevents financial burden. You do not have to bear any out-of-pocket expenses. This ensures that you do not have to run around arranging funds. Besides, there is no need to liquidate any long-term investments such as mutual funds. Additionally, you do not have to deplete your lifetime savings to meet your expenses. Since the insurance provider settles your bills you may enjoy a great degree of financial freedom.

2. Ensures that you receive quality treatment

In an event of a medical crisis, a cashless mediclaim policy helps you receive the best treatment. You may avail of excellent healthcare facilities without having to pay for any hospital-related expenses, such as domiciliary treatment costs, in-patient care expenses, alternative treatment cost, and ambulance charges, among others. All you have to do is display your health insurance card at the network hospital and fill in the pre-authorization form. The hospital will then forward the application to the TPA. Once the cashless health insurance application is approved successfully, you may receive treatment from the network hospital without making a single payment.

3. Provides value-added services

Greater the annual payouts by the insurance provider to the network companies, higher will be the negotiation power for discounts and offers. This benefit may be directly passed on to the customers. You may save a certain amount on your sum insured and utilize the same towards any subsequent event in the future.

The popularity of cashless insurance has indeed grown. You too may invest in such an insurance policy and avail of the numerous benefits it has to offer. In case you wish to opt for cashless benefit, you may buy insurance online or visit your local branch. By doing so, you may safeguard your financial well-being and have peace of mind knowing that you do not have to bear any financial burden.

Personal Loans: Are They Good or Bad?

There can be many causes why you may need to go for a personal loan. Although, with the uprising in the financial industry, the decision to borrow with a loan is an issue of worry. From wanting to revamp your home or buy a new car or run your business, you can take a personal loan for a plenty of reasons.

Personal loans are surely a good way to access extra money when you run out of finances. They also favor to offering appealing interest rates as compared to credit cards and others. When you need hard cash, getting a bank loan can be an instant solution. A loan link the gap between where you are with your education savings, scholarships and earnings from part-time work to where you want to be.

Although loans and debts can be an occasional problem, personal loans can be useful when in desperate need of money. Just like anything else, getting personal loans comes with a lot of positives and negatives. Here are few reasons why applying for a personal loan and getting one is best:

1. Pay off debts: The quantity you receive from personal loans can be used effectively by offsetting any other debt that makes things hard for you or the debts that have been employed at much higher interest rates. Saying that if you have a home loan or other loan, using the personal loan to eliminate them is a perfect way as interest rates of personal loans are much better than most other loans.

2. Medical Emergencies: It is awful to note that medical emergencies are not always accessible at economical prices and that we cannot risk the lives of our beloved ones. The best choice when it comes to a medical emergency is to get a personal loan.

3. Home Redecoration & Other Requirements: When you get a feeling that your house is in need of renovation or moving from one city to another, there's no better way to handle this by getting a personal loan.

Personal loans can be useful in many scenarios and Canadian Cash Solutions is here to help you out with this, but there are still few scenarios where there are the preferred choices than a regular loan. There is no confusion that a personal loan comes with many responsibilities. With the progress and huge changes in the financial industry, many easy and safe ways to raise funds have been put in place.

1. A Substitute for Personal Loans: Crowd funding is the best substitute for taking personal loans to get your idea or start-up to stellar heights. The primary concept of crowd funding is to let a newcomer or entrepreneur meet possible investors, influence them with the idea or project and obtain the mandatory funding. It can be a single investor or a group of investors. Crowd funding happens on online platforms that provide an ideal stage for clearly informing investors about the project or idea and deciding whether to fund or not.

2. Peer To Peer loans: Peer to peer loans aka P2P loans are the brand new absolute concept of the Financial industry. A trusted P2P lending platform secure funders looking for preferable prospects than those offered by banks and individuals or entrepreneurs looking for quick and easy short-term loans. Previously, there were no appropriate guidelines for these peer loans. But now, with the evolution of the Financial industry, P2P loans are rapidly replacing personal loans.

3. Short Term Payday Loans: Each of us could have faced an abrupt and unexpected need for hard cash and these short-term payday loans are meant to help in such situations. Since they have selected for a very short period of time, they are refunded instantly, which is certainly a benefit. You can go for weekly, bi-weekly, monthly or even daily loans. These are for sure a plus on personal loans.

Fast change in the Financial industry and unconventional loans not only provide a way and approach to reach out to more customers and raise funds easily, but they also overcome geographical dissociation.

How Does Indexation Impact Tax Charged on Gains from Debt Mutual Funds?

When you invest, you aim to maximize your returns. However, inflation eats into your actual returns. Additionally, when you exit your investments, you need to pay capital gains tax. Fortunately, the government offers a solution for this, which is known as the indexation benefit.

The basic reasoning for indexation benefit is to ensure you pay tax only on your returns after being adjusted for inflation. This allows you to pay 20% capital gains tax after taking advantage of indexation benefit.

Indexation plays a pivotal role in taxation when it comes to debt mutual fund investments. You may wonder what indexation is. In simple terms, it considers the rate of inflation when you calculate your returns on investments. Indexation results in a significant impact on your actual returns earned when you exit your investments in debt funds. Through indexation, your investment price is adjusted for inflation for the purpose of determining your tax liability when you exit. Indexation offers you several benefits because of the inflation adjustment.

Benefit of indexation

The indexed cost of your investment in debt mutual funds is based on the ratio of the inflation index at the time when you exit your investment. Therefore, a higher value means a reduction in your tax liability. During the long-term, the rising inflation adds up to the purchase cost of your debt funds. On a cumulative basis, it may result in the reduction of your taxable returns when you redeem your investment.

In case of smaller returns over a longer period, your entire returns on investments may be eaten up due to rising inflation. It is likely that in such a situation, you may not have to pay any taxes. It is beneficial because if most of your returns are erased due to inflation, paying taxes is not logical. Furthermore, the returns are only notional and not real due to the rising inflation.

Working of indexation

Indexation takes into account the date on which you invested your funds and the rate of inflation since then. When you apply the indexation benefit, your purchase cost increases. As a result, your profits at the time of exit reduce thereby reducing your tax liability.

Indexation and debt funds

Mutual fund investments are liable either to short-term or long-term capital gains tax. When you opt for tax-saving investments, long-term is defined as at least three years. Therefore, when you stay invested for at least three years, you will be liable to pay long-term capital gains tax. The current applicable rate is 20% post-indexation benefit.

For applicability of indexation, the formula is:

Original investment cost X Cost of Inflation Index (CII) at the time of exit/CII at the time of purchase

Let us understand this further with an example.

Assume that you invested INR 20,000 in tax-saving investments in May 2010. Further, assume that you redeemed your investment in June 2013 to earn INR 40,000. Therefore, your long-term capital gains before indexation are INR 20,000. However, your entire returns are not liable to tax because you remained invested for a period exceeding three years. You are allowed to avail of the indexation benefit, which reduces your long-term capital gains tax.

The indexed returns will be (20000*220)/167, which is equal to INR 26347 (CII was 167 in 2010-11and 220 in 2013-14).

Therefore, your taxable profits = 40000 – 26347 = INR 13653, which is a reduction of INR 6347 (20000 – 13653).

Until recently, the indexation base year was 1981, which is now modified to 2001. Therefore, if you invested before April 1, 1981, your profits may be calculated based on 1981 fair value. However, all investments after April 1 2017 will use 2001 as the base year to calculate the fair value.

In addition to earning profits, investments aim to determine how to save tax. One way is to use the indexation benefits on your long-term investments. You may also choose to pay taxes without taking the indexation benefit at a pre-specified tax rate.

You may choose from several mutual fund schemes. However, you may not have the experience or expertise to compare different schemes. In such a situation, you may consider using the ARQ investment engine, the core feature of Angel Wealth’s mobile application.

One major differentiation of ARQ from other available options is that all the recommendations originate through machines without any human bias or intervention. Based on your personal requirements and risk appetite, ARQ offers investment options that only deliver better returns but also help you know how to save tax.

Download the Angel Wealth app today and enjoy smart and quick investment tips.

Stop Being A Financial Burden For Your Family

As New Year’s resolutions still go, you may want to add a financial health point to your wishes for self-improvement this year. For a lot of people, the beginning of the year is the time to express their dreams and aspirations, from becoming a millionaire to travelling around the world. In reality, resolutions are extremely similar to a toddler’s Santa’s list. They are often full of impossible, unnecessary and self-focused items. Instead, it’s still time to make a difference this year with a selfless aspiration: Not being a financial burden for anybody. Don’t let your family pay for your mistakes anymore.

Payday shark loans that hurt the guarantor

It’s not uncommon at the beginning of the year to struggle to make ends meet, especially as a result of the traditional Christmas debt. You might need a short-term solution to manage the bills this month. Nevertheless, you need to stay avoid from payday loans, even though they may seem accessible and quick. Most payday loans require a guarantor who will have to make repayments if you can’t. With high-interest rates (over 1000%) and lack of security, these shark loans can tear a family apart and put your guarantor in troubles.

How much are you really worth?

While most people tend to believe that their worth in unquantifiable, financial institutions disagree. Your worth is estimated at the end of your life and will be measured in terms of funeral costs, capital assets and remaining debts. In other words, if you don’t want to leave your loved ones exposed to a financial nightmare, you need to take early dispositions, such as researching funerals on a budget and sorting out your debts. Don’t be that person who bankrupts the family with their lack of financial planning.

Ill-advised investment? Don’t take that chance

Did you know that most wealthy families lose their fortune within three generations? One of the main reasons for this misfortune – pun intended – is the pursuit of bad investment decisions. However, you need to be prepared to lose a lot of money if you don’t understand the financial subtleties of the market. In other words, if you don’t understand the business or the market, you shouldn’t invest. But even if you do, you need to stick to amounts that you can lose comfortably instead of betting your entire household income on the success of an unknown startup.

Sharing is not caring

If you’re prone to financial uncertainty, it’s important not to share the risk with your spouse. Joint bank accounts are the most common way to drag your partner into your debts. A poor rate score or the accumulation of unpaid creditors can impact on your spouse’s financial health. If you still need a joint account, you can choose to create an additional and isolated account in which you can both pay money for the weekly or monthly use. This will ensure that you keep daily financial activities separated and don’t put your partner at risk. Show you care and don’t take them down with you!

In the end, becoming debt-free is naturally an objective. But it’s essential that you remember that there is no need to let your financial hiccups affect your family.

When it Comes to Your Finances, Doing Nothing is the Worst Thing You Can Do

If you’re currently dealing with a troubling financial situation, you need to think carefully about what you should do next. The one thing that you should definitely not do is nothing at all. If you allow bad situations to develop at their own pace without intervening, you will live to regret it. Here’s why you should never do nothing when the situation concerns your personal finances.

Inaction Comes From Complacency and Overconfidence

The first thing to note is that people’s inaction so often comes because they are complacent about the situation they find themselves in and they don’t feel that anything too bad could possibly happen to them and their finances. If only that were true. To put it simply, your overconfidence and complacency will cost you if you take things too far and become too relaxed about serious situations.

Bad Situations Tend to Get Worse When Nothing is Done

When you do nothing in a situation regarding your finances, you will find that bad situations tend to get worse. This is the golden rule that you should always assume is true for you and your situation. You can’t just close your eyes and hope things will get better. Maybe 5% of the time issues will resolve themselves. But in the vast majority of cases, real action is required.

There Are Plenty of Ways to Get Yourself Out of Financial Trouble if You’re Willing to Act

There are so many things out there that you can do in order to get yourself and your finances back on track. That’s what it’s most important to recognise and realise. You don't have to remain trapped in the negative situation you find yourself in. It’s all about acting when the time is right for you to do so. Places like debtconsolidation.co can help you with consolidation. And you might even be able to get the debt reduced if you talk to your creditors.

Talk to People if You’re Unsure of the Next Step

Independent debt advice is out there waiting to be taken advantage of, and that’s what you need to do. If you’re willing to be aware enough to reach out and ask for the help you need, without your pride ever stopping you from doing that, you will get yourself back on the right path sooner rather than later.

Don’t Expect Something to Arrive Out of Nothing

There is never going to be a situation in which you can expect something to magically emerge that will solve all your problems for you. If you want to learn how to be more realistic and practical in life, head to theemotionmachine.com/a-realistic-approach-to-thinking. It might give you the advice you need to start taking action and stop waiting for things to simply resolve themselves for you.

Your finances are precious and you need to be looking after them properly at all times. If you just allow things to become problematic and you don’t do anything to put those situation right, you’re only going to land yourself in even more trouble before long.