Are you looking for return of premium term plan?

Recently I came across one return of premium (ROP) plan. My first thought was – let’s try it out!

Policy Variables

Typically, there are three things that you need to choose from in any insurance policy: the monthly benefit, policy term and the choice of plan.

Monthly benefit: You can opt for monthly payment of Rs.10,000, Rs.25,000, Rs.50,000, Rs.75,000 or Rs.1 lakh. This is kind of “configuration” for your nominees and no benefit to you.

Policy Term: There are pre-defined policy terms to choose from and depending upon your choice, the duration of death benefit is spelt out. So, if you opt for a 10-year policy term, the monthly benefit upon your death to your nominee or beneficiary will be for a defined period (say, 20 years).

Choice of Plan: You can either opt for a pure term policy that doesn’t pay anything back if you survive the policy term, or opt for a return of premium plan that will pay 110% of the premium paid by you on surviving the policy term. Of course, the second option is more expensive since it guarantees money back at the end of the policy term.

How it works?

Suppose a 35-year-old male buys this plan for a policy term of 20 years and opts for a monthly payment of Rs.1 lakh for 10 years, or a total of Rs.1.2 crore, as death benefit.

The insurer reports the sum assured in present value terms by discounting it; so, in this case the illustration shows the sum assured to be Rs.91 lakh, and the policyholder will have to pay an annual premium of Rs.17,775. If he opts for the return of premium option, the premium will go up to Rs.48,854.

Return of Premium (in %)

The return of premium option is more than twice the price of a pure term plan, because it guarantees money back on survival. There is, however, little merit in paying such high premiums to get that money back several years later.

Yr 1 -33635 Yr 7 -33635 Yr 13 -33635 Yr 19 -33635
Yr 2 -33635 Yr 8 -33635 Yr 14 -33635 Yr 20 -33635
Yr 3 -33635 Yr 9 -33635 Yr 15 -33635 Yr 21 739970
Yr 4 -33635 Yr 10 -33635 Yr 16 -33635
Yr 5 -33635 Yr 11 -33635 Yr 17 -33635 IRR 0.90%
Yr 6 -33635 Yr 12 -33635 Yr 18 -33635

The rate of return on the premium paid and received at the end of term for a 20 years is 0.50% for 35 years old and 0.90% for 30 years old.

My recommendations – NO BUY*

I believe insurance plan should be only picked up on the protection it offers. For any individual and dependents, insurance products offer protection from loss of income due to death or critical illness. One should not expect any returns from insurance products as the purpose of insurance companies are never to generate good returns and are guided by regulations from IRDA.

There are many products designed to appeal non-savvy non-financial residents and marketed differently. But, I term all these as “mis-selling” and suggest all my readers to apply financial concepts like IRR, Compounding and assess their risks beforehand.

One can easily pick up term plans (with no return expectation) and pay monthly/half-yearly/yearly premiums till age 60. ROP plans are expensive 2-3 times and cannot generate good returns. Better invest in MFs or other non-insurance based financial products.

And the life begins..

“The fishermen know that the sea is dangerous and the storm terrible, but they have never found these dangers sufficient reason for remaining ashore.”

— Vincent Van Gogh, Painter

After close to 10 years of association with TCS, I would be moving out to explore new seas and face different storms. And, the reason is sufficient enough than to remain at ashore and continue career in TCS.

Now, what could be that compelling reason? Is it monetary growth? or career growth? or job satisfaction? or boredom from routine life? Or something else… Keep guessing! But, the fact remains that at some point in time one has to explore the sea and have new experiences. One has to take the risk but it’s worth taking, I believe.

With this post, I also want to revive my personal blog. It’s been almost 16 months since I last posted my “Happy New Year 2016” post. Somehow, 2016 has not been so happy for me. Those who are close to me would know what I gained and what I lost in past year.

Anyways, let me restart my life as I step out of my comfort zone. Let’s explore the life!

“Twenty years from now, you will be more disappointed by the things you didn’t do than those you did. So throw off the bowlines. Sail away from safe harbor. Catch the wind in your sails. Explore. Dream. Discover.”

— Mark Twain, Great American Writer


Happy New Year 2016

Wishing all my readers Merry X’mas and Happy New Year 2016!

After a long time, I am writing a blog to mark the end of year 2015 and welcome 2016.

Overall, the year 2015 turned out to be positive and productive on both professional and personal fronts. Hope 2016 brings more fortune and prosperity in all your lives.


3 reasons to NOT change in 2014

A very interesting article read recently in my company’s micro-blog site. Hope you enjoy reading as much as I did.
We invented ‘Zero’. Guess we also invented ‘Timepass’ , ‘Day Dreaming’ & ‘planning which usually FAILS’. 
How so very often have we wanted to change things in our life, also knew the methods & ways to achieve the change but just could not find the force & self discipline to CHANGE.

We have all the answers in this highly communicative age. Kya karna hai, Kaisey karna hai: Sab pata hai !Then why is it that it so happens that :- –
– You want a more fit body but just do nothing to achieve that ?
– You want to speak better but are not able to take massive action about it.
– You are just not able to meet most of your plans; inspite of making all your plans.
You decide to change on your birthdays, on so many previous new year eves BUT !

One lesson that I have clearly learnt is:- ‘People do not CHANGE’.  They just do not change when you suggest them a better option. They change ONLY when change is the ONLY option left. Our hardened habits make us so very predictable & not so malleable to change; despite of the several planning that we regularly do.

Here is what I see working for others:

1. Do less!
There is too much around to be done. There is too much around to attract to distract. Simplify, prioritize and become absolutely clear in the new year. Everything & everyone is not worthy of your attention!

You wish to DO newer, exciting & better stuff in Life ???  STOP doing some of the old, non exciting & mediocre stuff that you compulsively end up doing because of YOUR habit.

SIMPLIFY!… There is too much information, drama, and triviality around. In this ocean of very attractive garbage; your decisions to change can easily get lost. Keep on reducing ‘What you process & Do’. Be a strong Reductionist!

2. Self Discipline
Once you have decided to ‘Do Less’. Now do that ‘Less’ very well . Be hard on your own in doing that ‘Less’ very well… Cultivating the path of self change requires utmost exertion of body & mind. Take this very strong decision to be strongly ‘Self Disciplined’.
It is fun when you are on YOUR road; while you see the whole world falling to temptations. 
3. Stop worrying about ‘Your Emotions’.
“Do you actually remember what were you thinking & feeling, this time last year? I guess – Not. Are not our emotions, feelings & desires so very disposable? Do not give them much importance. Rather bring your mind fully to activity of your planning.
Think Less, Do more ! Whenever in life you are losing self control…Just think of Sunny Leone’s cameraman…!!!

Now you go & do it. Happy ‘Self Disciplined’ 2014 !
(Excerpts of a micro-blog posted in TCS KnoME! by Shrikant Gakhare)

Book: “How Rich People Think”, Steve Siebold

This new year begins with excerpts from the book of Steve Siebold.

Steve Siebold, author of ‘How Rich People Think’ spent nearly three decades interviewing millionaires around the world to find out what separates them from everyone else. It had little to do with money itself. It was about their mentality. “[The middle class] tells people to be happy with what they have,” he said. “And on the whole, most people are steeped in fear when it comes to money.”

Average people think MONEY is the root of all evil. Rich people believe POVERTY is the root of all evil.

“The average person has been brainwashed to believe rich people are lucky or dishonest,” Siebold writes. That’s why there’s a certain shame that comes along with “getting rich” in lower-income communities. “The world class knows that while having money doesn’t guarantee happiness, it does make your life easier and more enjoyable.”

Average people think selfishness is a vice. Rich people think selfishness is a virtue.

“The rich go out there and try to make themselves happy. They don’t try to pretend to save the world,” Siebold told Business Insider. The problem is that middle class people see that as a negative––and it’s keeping them poor, he writes. “If you’re not taking care of you, you’re not in a position to help anyone else. You can’t give what you don’t have.”

Average people have a lottery mentality. Rich people have an action mentality.

“While the masses are waiting to pick the right numbers and praying for prosperity, the great ones are solving problems,” Siebold writes. “The hero [middle class people] are waiting for may be God, government, their boss or their spouse. It’s the average person’s level of thinking that breeds this approach to life and living while the clock keeps ticking away.”

Average people think the road to riches is paved with formal education. Rich people believe in acquiring specific knowledge.

“Many world-class performers have little formal education, and have amassed their wealth through the acquisition and subsequent sale of specific knowledge,” he writes. “Meanwhile, the masses are convinced that master’s degrees and doctorates are the way to wealth, mostly because they are trapped in the linear line of thought that holds them back from higher levels of consciousness…The wealthy aren’t interested in the means, only the end.”

Average people long for the good old days. Rich people dream of the future.

“Self-made millionaires get rich because they’re willing to bet on themselves and project their dreams, goals and ideas into an unknown future,” Siebold writes. “People who believe their best days are behind them rarely get rich, and often struggle with unhappiness and depression.”

Average people see money through the eyes of emotion. Rich people think about money logically.

“An ordinarily smart, well-educated and otherwise successful person can be instantly transformed into a fear-based, scarcity driven thinker whose greatest financial aspiration is to retire comfortably,” he writes. “The world class sees money for what it is and what it’s not, through the eyes of logic. The great ones know money is a critical tool that presents options and opportunities.”

Average people earn money doing things they don’t love. Rich people follow their passion.

“To the average person, it looks like the rich are working all the time,” Siebold says. “But one of the smartest strategies of the world class is doing what they love and finding a way to get paid for it.” On the other hand, middle class take jobs they don’t enjoy “because they need the money and they’ve been trained in school and conditioned by society to live in a linear thinking world that equates earning money with physical or mental effort.”

Average people set low expectations so they’re never disappointed. Rich people are up for the challenge.

“Psychologists and other mental health experts often advise people to set low expectations for their life to ensure they are not disappointed,” Siebold writes. “No one would ever strike it rich and live their dreams without huge expectations.”

Average people believe you have to DO something to get rich. Rich people believe you have to BE something to get rich.

“That’s why people like Donald Trump go from millionaire to nine billion dollars in debt and come back richer than ever,” he writes. “While the masses are fixated on the doing and the immediate results of their actions, the great ones are learning and growing from every experience, whether it’s a success or a failure, knowing their true reward is becoming a human success machine that eventually produces outstanding results.”

Average people believe you need money to make money. Rich people use other people’s money.

Linear thought might tell people to make money in order to earn more, but Siebold says the rich aren’t afraid to fund their future from other people’s pockets. “Rich people know not being solvent enough to personally afford something is not relevant. The real question is, ‘Is this worth buying, investing in, or pursuing?’” he writes.
Average people believe the markets are driven by logic and strategy. Rich people know they’re driven by emotion and greed. Investing successfully in the stock market isn’t just about a fancy math formula. “The rich know that the primary emotions that drive financial markets are fear and greed, and they factor this into all trades and trends they observe,” Siebold writes. “This knowledge of human nature and its overlapping impact on trading give them strategic advantage in building greater wealth through leverage.”

Average people live beyond their means. Rich people live below theirs.

“Here’s how to live below your means and tap into the secret wealthy people have used for centuries: Get rich so you can afford to,” he writes. “The rich live below their means, not because they’re so savvy, but because they make so much money that they can afford to live like royalty while still having a king’s ransom socked away for the future.”

Average people teach their children how to survive. Rich people teach their kids to get rich.

Rich parents teach their kids from an early age about the world of “haves” and “have-nots,” Siebold says. Even he admits many people have argued that he’s supporting the idea of elitism. He disagrees. “[People] say parents are teaching their kids to look down on the masses because they’re poor. This isn’t true,” he writes. “What they’re teaching their kids is to see the world through the eyes of objective reality––the way society really is.” If children understand wealth early on, they’ll be more likely to strive for it later in life.

Average people let money stress them out. Rich people find peace of mind in wealth.

The reason wealthy people earn more wealth is that they’re not afraid to admit that money can solve most problems, Siebold says. “[The middle class] sees money as a never-ending necessary evil that must be endured as part of life. The world class sees money as the great liberator, and with enough of it, they are able to purchase financial peace of mind.”

Average people would rather be entertained than educated. Rich people would rather be educated than entertained.

While the rich don’t put much stock in furthering wealth through formal education, they appreciate the power of learning long after college is over, Siebold says. “Walk into a wealthy person’s home and one of the first things you’ll see is an extensive library of books they’ve used to educate themselves on how to become more successful,” he writes. “The middle class reads novels, tabloids and entertainment magazines.”

Average people think rich people are snobs. Rich people just want to surround themselves with like-minded people.
 The negative money mentality poisoning the middle class is what keeps the rich hanging out with the rich, he says. “[Rich people] can’t afford the messages of doom and gloom,” he writes. “This is often misinterpreted by the masses as snobbery. Labeling the world class as snobs is another way the middle class finds to feel better bout themselves and their chosen path of mediocrity.”

Average people focus on saving. Rich people focus on earning.

Siebold theorizes that the wealthy focus on what they’ll gain by taking risks, rather than how to save what they have. “The masses are so focused on clipping coupons and living frugally they miss major opportunities,” he writes. “Even in the midst of a cash flow crisis, the rich reject the nickle and dime thinking of the masses. They are the masters of focusing their mental energy where it belongs: on the big money.”

Average people play it safe with money. Rich people know when to take risks.

“Leverage is the watchword of the rich,” Siebold writes. “Every investor loses money on occasion, but the world class knows no matter what happens, they will aways be able to earn more.”

Average people love to be comfortable. Rich people find comfort in uncertainty.

For the most part, it takes guts to take the risks necessary to make it as a millionaire––a challenge most middle class thinkers aren’t comfortable living with. “Physical, psychological, and emotional comfort is the primary goal of the middle class mindset,” Siebold writes. World class thinkers learn early on that becoming a millionaire isn’t easy and the need for comfort can be devastating. They learn to be comfortable while operating in a state of ongoing uncertainty.”

Average people never make the connection between money and health. Rich people know money can save your life.
 While the middle class squabbles over the virtues of Obamacare and their company’s health plan, the super wealthy are enrolled in a super elite “boutique medical care” association, Siebold says. “They pay a substantial yearly membership fee that guarantees them 24-hour access to a private physician who only serves a small group of members,” he writes. “Some wealthy neighborhoods have implemented this strategy and even require the physician to live in the neighborhood.”

Average people believe they must choose between a great family and being rich. Rich people know you can have it all.

The idea the wealth must come at the expense of family time is nothing but a “cop-out”, Siebold says. “The masses have been brainwashed to believe it’s an either/or equation,” he writes. “The rich know you can have anything you want if you approach the challenge with a mindset rooted in love and abundance.”
(From Steve Siebold, author of “How Rich People Think”)

Ganesh Festival 2013

गणपती बाप्पा मोर् या… पुढच्या वर्षी लवकर या


The time has come when we say ‘Good bye’ to Lord Ganesha and tell him to visit next year at the earliest. The 10-day festival was full of joy, celebration and positivity around us.

This year too, the Lord Ganesha came to many houses, won our hearts, and today will be sent back with a lot of celebration, dance and glory. According to Ancient References, Lord Ganesha was created by Goddess Parvati out of dough and she asked him to keep a watch while she had bath. When Lord Shiva (Parvati’s Husband) came, Lord Ganesha did not allow him to enter. Lord Shiva in anger then cut off Lord Ganesha’s head. Goddess Parvati was inconsolable and hence Lord Shiva asked his attendants to bring the head of the first living being who they saw and that being should be sleeping in opposite side of his/her mother. Lord Shivas attendants’ saw an elephant and brought its head. Lord Shiva fixed this head on the human body and thus Lord Ganesha was again brought to life. This day is celebrated as “Ganesh Chaturthi”.

Amongst the Indian states Maharashtra, Rajasthan, Goa, and Tamil Nadu are the prominent states celebrating this occasion. Maharashtra sees families booking idols a month before the festivities begin. There is lot of sentiment and emotion attached to the festival and there is not an eye that does not see a tear for the Lord during and after the festival. In Mumbai, devotees throng to see the Lalbaugcha Raja idol and the Dagduseth Halwai Ganpati in Pune.

As I look back on last 10 days activities, here’s a photo blog for all of my friends/followers:

Day 0: Day before Ganesh Chaturthi (08/09/2013)

The day was busy in preparation to welcome Lord Ganesh and arranging to welcome Ganesh Bhaktas (Devotees). We decorated house, prepared sweets for prasad, arranged for snacks/food to be served next day and preparation for Puja.

Day 1 : Lord Ganesha at my Home


The first day started with worshipping Lord and doing “Puja” by following traditional processes. The day spent in welcoming relatives and friends and doing regular chores of “Puja” and “Aarti”.

Day 2: Lord Ganesha at my Home for day and then Visarjan


Day 5: Visit the grand idol of “Lal Baug” a.k.a. “Lal Baug Cha Raja” at 4:30am

2013-09-14 05.09.15

Day 9: Visit to the local idols at Relative’s Building (The idol is selected for Times of India Competition)

2013-09-17 21.41.08

May Lord Ganesha fulfills your life with loads of happiness and success!

Choice, Not Chance… Part 2

As the famous adage referred in my earlier post “Choice, Not Chance…“, the destiny of any human is being decided by the choices made and not by any chance/luck. But, with further deliberation, it raises a question in my mind – “Have we already selected each of our choices at different stages?


In popular trilogy of Matrix, Neo – our hero – meets Oracle to know about his future and check if he’s the one. On entering in her kitchen, Oracle tells Neo to not bother about the vase and the next moment Neo brokes the vase. She then asks Neo if he knew earlier that the vase would broke he would have still broken it. In Part II of the same trilogy, Oracle tells Neo “You have already made the choice. Now, you have to understand why you made that.”

From our childhood days, I am very inclined to mythology and keep connecting to various Hindu mythology based TV serials. In almost all serials, the one concept regularly comes out – Vidhata has already chosen the path for you and what will happen in a given moment is also pre-written in the book. Even Gods are helpless and have to follow what has been pre-decided. All we have to do during our entire lifetime is to somehow get into a situation in which we need to make choice. This raises several questions in my mind but the most important question to me is, if things are already predetermined, what is luck then? Is it true with hardwork you can change your destiny?

My interpretation is – Luck is positive in nature. When things go as per your plan, you name it as “luck”. It is infact the consequences of series of choices you made or people around you made. Yes, you can indeed change your current situation and inturn your destiny by doing your “karma” – by doing right things.

What comes after 24?

The answer seems to be very simple, isn’t it? Well, most of you will think the correct answer is 25. But, just think again before jumping to any conclusion. Did the question ever say anything about order like ascending or descending? Or, forget order… Does our question here tell that “24” is a part of any numerical series? For 24 as a number, the next number can be 23 or 25. Ask me and the answer you will get is “another day” – considering it as 24 hours. I asked one of my friends who was about to get married and he replied to this questions as “more responsibility” – Responsibility in terms of family, career and of course money!

Ask a child and I’m sure you’re likely to get various different answers. Do we know why? The answer is: a child never thinks and works in a predefined boundary. A child has a different vision for the world compared to that we have as an adult. That’s what I call, in a true sense, “New Sense”!

This is just another question which we consider so naïve and obvious yet, we forget to think beyond the obvious. The reason, as I see, is our human brain is so used to constraints that it fails to see beyond constraints. Since childhood, we had been taught to be within constraints. Our education system teaches us to work in boundary conditions. It never taught us and encouraged us to take a step beyond our boundary.

In any business arena, we tend to play with numbers and analyze what numbers tell us. But, can we really believe these numbers? According to the 2001 census, India’s literacy rate for the population, aged seven and above, was 65.4 per cent. What does this number really mean? Can 561 million people, that this rate implies, read a newspaper headline in their own language? Not really. What it means is that households across India reported 65.4 per cent of its members to be “literate”, when the census fieldworker showed up. The literacy rate is a perceptual number — people perceived to be literate. It is not an accurate indicator of the proportion of readers in the population.

Now, consider another research – courtesy of NPD Research: According to their “Kids and Digital Content” study, “Kids are becoming increasingly tech-savvy, playing video games and using and downloading content to cell phones, computers and portable digital music players as young as age 2.”  The study examines kids age 2 to 14 and their device and content habits, asking them, and yes, their mothers, about their digital lives.

According to NPD, “only 15 percent” of 2- to 5-year-olds are using cell phones, but 62 percent of 11- to 14-year-olds use them.

2-year-olds using cell phones?

I have an almost-three-year-old nephew and he could use a cell phone – as a passenger in a dump truck, a percussion instrument, or something new to hurtle through the basketball hoop. But he’s not ordering up a custom ringtone anytime soon. Or maybe they’re talking about simply saying hello to grandma on the cell phone, once out of the ten times you try?

These instances clearly indicate that somewhere something is wrong and we need work out something for our future generations. You may be aware that each year hundreds and thousands of money are spent on hoardings and TV Ads by FMCG companies. They’re blowing investor’s money in these conventional medium of Advertisements but is any value or worth being taken out? How many of us actually read the hoarding and then go to a retail store to buy that product/service? In my life, I don’t recollect any such instance.

Therefore, it is now the right time to take a step forward in spreading “New Sense!” Our business today needs a totally different and unconventional thinking to look at various functions and at entire business also.