Money Matters

A ‘Share’ or ‘Stock’, to put simply is a share in ownership of a business. When you buy a share you basically get ownership of a percentage of the business. Let’s understand this with an example. Consider Mr. A’s life is a business. When, Mr. A was born, a startup was established. He went through the school and now wants to go for higher education. But, Mr. A doesn’t have money to go to college, so, he gives an advertisement in the newspaper, that whoever will give him 5Lacs for going to college, he will give that person 10% of his income for lifetime, this is called public issue or IPO (Initial Public Offer). Now, people study this person’s school grades, his intelligence, the course for which this person is going for since, it may impact his earning capacity, his nature whether this person will work hard enough to pass through college with good grades.  Depending on all this information, people will calculate what kind of income Mr. A can generate, and judge if they want to...

So after deciding the policy and the payment term , you proceed ahead, enter your basic details and now comes a page asking you to select add-ons. Sounds a way how we order in ice-cream parlor. And just like ice creams some add-ons are good and other are not so much. So let’s start on them. What are Add-Ons? These are toppings to your plain vanilla ice-cream or insurance. These may either make your term insurance comprehensive or complex depending upon what you add on. Of course, you need to pay extra for these add-ons. Some of the popular and most common add-ons are : 1. Return of Premium   : Under this rider, all the premiums paid will be returned on surviving the policy term. Do note that there will be no interest paid on this, and just the total premiums paid will be paid back. While, this may sound good, do consider the time value of money. If you pay, Rs.15000 for a policy for 30 years, after 30 years you will receive 4.5Lacs. What will Rs. 4.5Lacs be worth afte...