First of all guys forget your iexplorer. Ieplorer is, I think, the slowest, clumsiest and outdated browser of today. First choice can be Mozilla Firefox with its so many extensions and other features. My personal favorite is Flock browser which is designed on Firefox platform itself. The sidebars in Flock absolutely changed my web surfing habits, which were completely orthodox before Flock.

Secondly, download Google pack, which includes Google desktop, Google sidebar and a host of very useful software like picassa, free spyware, acrobat reader, Google earth etc. Google desktop search is, I think, the best feature. Once it indexes your hard disk this search becomes really fast and useful. Google sidebar gadgets are also very useful. Yahoo widgets can also be a good substitute for Google sidebar.

Thirdly, if you want to backup your important documents and files online use ‘windows office live’, which is a free service from Microsoft (yes free from Microsoft !). Windows office live is useful only if you have Microsoft office on your pc or laptop. If you are using any free office suite then you can use ‘Google docs’. Both these services are very useful if you want to share your documents with others or if you want the luxury of accessing your docs from any pc or laptop.

Another thing that can change your web experience completely is, have your personalized home page. ‘My Yahoo’ and ‘iGoogle’ are two good (branded) options. These personalized home pages on your browser are really useful if you don’t want hassles of opening many different web pages which you regularly open after connecting to internet. You can add modules (in My Yahoo) or widgets (in iGoogle) like different mail boxes, market quotes, different news reeds, and many more, so as soon as you connect to internet and open up your browser you will have a quick update of all your new mails, recent news, local weather, stock quotes etc on a single page.

Another thing that I would suggest you to keep yourself updated about the new and interesting things on web is ‘delicious’ . Be a regular visitor of delicious.com. You can also keep all your bookmarks and favorites online on delicious, which will in turn give you the luxury of accessing all your bookmarks from any other computer. A good substitute of delicious is magnolia.

In recent days it has become fashionable to discourage investors from buying unit linked insurance plans, ULIPs.

The reason: High administrative, mortality and fixed annual charges. Instead, term insurance plans offer better insurance to the life covered, so goes the argument.

While each and every insurance product has its advantages and disadvantages compared to other such similar products, insurance buyers must understand their need for insurance before buying any insurance product.

The current article dwells on the advantages that a ULIP has over term insurance plan. Or rather, it tries to remove some misconceptions about ULIPs.

To understand this better, let us go through a conversation between two friends.

Conversation One

Friend one: I am thinking of buying an insurance plan to cover my life. Not sure whether to go in for a term plan or a ULIP.

Friend two: Don’t think twice. Go for a term insurance plan. They are the best way to cover a life

Friend one: But I have heard that in term plans no returns are available at the end of the plan period if I survive?

Friend Two: Yes. But why do you need returns from an insurance plan? You know my friend never mix investments with insurance. Keep them separate. You can always become rich by investing in mutual funds or equities. Take my word, go in for a term plan.

Friend One: You may be right. Hey, do you have any workings or illustrations, which I may go through before I decide on this?

Friend Two: Arrey yaar, why do you need workings? Don’t you read newspapers? Don’t you read the columns written by experts? All of them say that term plans are the best. If they are saying that term plans are good, they must be good. Anyways, who has the time to go through workings and all? I trust these free advices totally. I suggest you do the same too.

Friend One: But I don’t know anything about investing in mutual funds or equities. What do I do?

Friend Two: Don’t worry about that. There are financial planners who will plan everything for you. Just leave everything to them. They will help you out.

Conversation Two

Client: I need to plan my finances. Can you suggest something good to me?

Consultant: Of course we can do it. Do you have any idea as to what your needs are?

Client: Yes I have. I am the only earning member of the family. Plus, I also have a housing loan liability. I need protection for my life. I am looking at a life cover of at least Rs 50 Lakhs. I am also looking for a reasonable return on my investments.

Consultant: Our suggestion to you would be to go in for a term plan and invest the remaining in mutual funds and equities. This will ensure that you get protection and returns from investments.

• Why ULIP is not the best insurance product

Client: But my resources are limited, do you think it would be possible to take a term plan and invest at the same time?

Consultant: Of course it is possible. The premium for a term plan with a life cover of Rs 100,000 is only Rs 400. Don’t you think this is cheap?

Client: But I need a life cover of Rs 50 lakhs. Also I have heard of this new thing called ULIP. Why can’t we go in for that?

Consultant: Don’t worry. Term plans are really cheap. Like I said for Rs 1 lakh, the premium is only Rs 400. And never mix insurance with investments. Also understand that these ULIPs are very expensive. They deduct a huge amount of money from the premium you have paid toward their charges and agents’ commission. Only the balance is invested and the returns are no way comparable with that of mutual funds and equities.

Client: But Sir, in case of a term plan, if I survive, nothing is paid back to me. This means that I will lose all the money that I have paid over the years towards the premium. Don’t you think it is better to lose a part of the money in ULIPs than losing the entire money in a term plan?

Consultant: Who is the expert here? If we are saying that term plans are best suited for protection, it is final. If you wish to continue as our client, please follow our advice.

A real life example

One of our clients, let us call him Amit, wanted to take a life insurance cover. He had taken a home loan of Rs 45,00,000. He wanted a matching life cover to ensure that in the event anything happens to him, the maturity proceeds from the insurance could be used to repay the housing loan. He had two options before him.

Either buy a term plan or go in for a ULIP. We looked around for a number of options for a term plan. Given below are the quotes from various insurance companies for a life cover of Rs 45,00,000 for a person aged 32 years. The term of the cover is 25 years.

The least cost premium, we found was Rs 15,496. This looked good. But he had to pay this premium for the next 25 years.The total premium payout would have been Rs 387,400. This was not acceptable to him. Not because he could not afford the money. But for an entirely different set of reasons.

• Get right your insurance priority

Being a software engineer, his work required him to travel most of the times. Plus he also felt that keeping track of premium payment for 25 years would be too tedious. He wanted to buy a plan, which gave him a life cover of Rs 45,00,000 with a shorter premium payment period.

He was suggested to consider a ULIP with the following features:

• Premium per year would be Rs 30,000
• Minimum premium payment term of 3 years. Can continue the premium payment if he wished at a later stage
• Maximum life-cover availability. In this case the life cover was Rs 45,00,000
• Investments in ULIP to be in Maximiser, an option where the investments are into equity products like mutual funds and hence potential for higher returns

He agreed and took up the plan in December 2004. The policy got issued on 20^th December 2004. He completed the mandatory premium payment for the first three years when he paid his last installment in December 2006.

Given below are the administration charges and the insurance charges deducted from the premium:

Year	Premium (Rs)	Administration charges (Rs)	Mortality charges (Rs)	Fixed annual charges (Rs)	Total charges (Rs)	Amount invested (Rs)
20-12-04	30,000	6,000	8,133	720	14,853	15,147
20-12-05	30,000	2,250	8,508	720	11,478	18,522
20-12-06	30,000	1,200	8,951	720	10,871	19,129
Total	90,000	9,450	25,592	2,160	37,202	52,798

The total of the administration charges, mortality charges and fund management charges for all the three years put together works out to Rs 37,202. If one were to take the term plan premium into consideration, the total premium outflow would have been Rs 15,496*3 = Rs 46,488.

Premium as per term plan = Rs 46,488

Charges as per ULIP = Rs 37,202

Effective savings = Rs 9,286

Now let us look at this from the investment angle too. If we have to understand whether the returns from the plan are reasonable, it is inevitable that we have to have a comparison. And so we compare the returns of this ULIP with two different mutual funds with two different objectives.

The following tables give a comparison of the same:

These net asset value, NAVs, are for Reliance Growth Fund, a fund rated number one in the last five-year returns category and number four in the last three-year returns category by Value Research Online. The NAVs are available for cross checking in www.reliancemutual.com. The date of investment is taken as 20^th of December, on which date investment in ULIP was made.

For the sake of comparison an illustration of an equity linked saving scheme, ELSS, fund is also given here. The NAVs are for HDFC Tax Saver Fund, a fund rated 4^th in the five-year returns category and 2^nd in the three-year returns category. The NAVs are available for cross checking in www.hdfcfund.com.

What does this tell us?

The comparisons are made between COMPARABLE products. The investments in ULIP were in the maximiser option. Maximiser option allows investments predominantly in equities. The investment objectives of Reliance Growth Fund & HDFC Tax Saver Fund are to invest predominantly in equities.

• Are you aware of these insurance terms?

The difference between the fund values is very much evident. In the ULIP, after deducting all the applicable charges towards insurance, administration and fund management, the balance is Rs 75,225. The same investment in Reliance Growth Fund stands at Rs 69,801 and in HDFC Tax Saver Fund stands at Rs 79,173.51. While HDFC Tax Saver Fund has generated a higher return of Rs 3,948, this advantage would be nullified in the future years when the entire sum of Rs 30,000 is available for investments. This is more clearly explained in the next point.

In ULIPs, the obligation towards the premium payment is completed after the first three years of premium payment is made. This means for Amit, this obligation was over when the payment was made in Dec 2006. He completed his three years of payment. From December 2007, the whole of Rs 30,000 is available towards investment in mutual funds or equities.

Had Amit opted for a term plan, the situation would have been totally different. He would have paid the term premium charges of Rs 15,496 for the next 22 years. Consequently, the amount available for investments in each of the next 22 years would have been Rs 14,504. It is elementary mathematics that Rs 30,000 invested over a period of 22 years will compound itself much higher than Rs 14,504.

There is a near unanimous opinion amongst people that charges deducted for ULIP schemes are very high. The table below illustrates the charges more clearly:

Year	Premium (Rs)	Administration Charges (Rs)	Fixed annual charges (Rs)	Total charges (Rs)
2004	30,000	6,000	720	6,720
2005	30,000	2,250	720	2,970
2006	30,000	1,200	720	1,920
2007 – 29	Nil		15,840	15,840
Total		9,450	18,000	27,450

Apart from the above-mentioned charges, ULIPs also charge fund management fees of 2.25 per cent per year. This has not been considered since mutual funds too levy almost the same charges. There might be a variation of 0.25 per cent to 0.5 per cent, but this is not very significant.

The table very clearly shows that the total charges levied in ULIP over a period of 25 years are Rs 27,450. If this were equated as an annual charge, per year charges would come to Rs 1,102.

Now let us look at another misconception. Advisors become RICH by selling ULIPs. Is this true?

Commission structure — ULIPs

Year	Premium (Rs)	Commission (Per cent)	Commission (Rs)
2004	30,000	12	3,600
2005	30,000	5	1,500
2006	30,000	2	600
Total			5,700

After three years of premium payment, the net commission earned by an advisor in this scenario is a fabulous sum of Rs 5,700!

Compare this with the term premium commissions earned.

Year	Premium (Rs)	Commission (Per cent)	Commission (Rs)
2004	15,496	25	3,874
2005-06	30,992	7.5	2,324
2007 � 28	3,40,912	5	17,045
Total	3,87,400	NA	26,243

After 25 years of term premium payment, the net commission earned by an advisor is Rs 26,243. Also understand this: In case of a term plan, the revenue stream for an advisor will continue for the full 25 years whereas in ULIPs, after three years in case a customer decides to stop the premium payment, the revenue stream also stops.

The one drawback of ULIP is that in case of death, either the sum assured or the fund value, whichever is HIGHER is paid and not both.

To illustrate, if something were to happen to Amit today, his family would get back Rs 45,00,000 only. Had he opted for the term plan, then his family could have liquidated the mutual fund holdings for Rs 69,801 and they would also have got Rs 45,00,000 from the insurance company. From a long-term perspective, this may not affect the wealth creation for Amit since from the fourth year onwards the allocation towards mutual funds/equities is higher.

ULIPs today stand at the same position mutual funds stood in 1993, when private sector mutual funds entered the market. Returns from the fixed income bearing securities like EPF, PPF, NSCs & NSS were high.

• PPF vs NSC: What’s the difference?

Even the rate of interest on bank deposits was around 15-16 per cent during those days. Added to this was the fact that UTI was completely under Government control and people trusted UTI far more than other mutual funds.

The same sets of arguments we are hearing today against ULIPs were made against the mutual funds then. But as time has shown from Rs 47,000 crores in 1993, mutual fund industry today is managing assets worth Rs 231,862 crores (data as per AMFI website). UTI no longer enjoys the privileges it had under government patronage.

Mutual fund companies like Reliance, Franklin Templeton, Pru ICICI, HDFC, Birla Sunlife etc have emerged as dominant forces in the Indian financial market. Insurance industry too has witnessed a number of changes. From a single insurer just a decade back, today the industry has several private life insurance companies. Customers today have wider choices depending on their requirements and ability to invest money.

One last point before I conclude this article

Several comments are made against the insurance companies and advisors in general. Please understand that different products are structured to suit different individual needs of the customers. If endowment products have worked well since the last 50 years, it is not only due to the mis-selling by advisors.

Give credit to the product also which has enabled thousands of families to save regularly over a period of time and given them returns when they needed it the most.

Similarly if ULIPs are working well now it indicates the success of the product in tapping the latent demand existing in the market.

At the end of the day if you are convinced, for good or bad, buy what you want. But do take care to properly analyse the products and their pros and cons.

WHY I AM PROUD TO BE A MARINER
Say the dreaded thing “The earth is round” and you will find the noose tightening around your neck. Do not go too far in the ocean because the sea boils at the equator and monsters eat the ships like biscuits. We are talking of the time when myths seemed truer than reality and the myths were fiercely and meticulously guarded by fanatics. But a few brave people looked the life differently and had the courage to lose the sight of the shore to find new horizons and they set their sails for the greatest adventure the mankind has ever undertaken. Magellan sailed round the globe and gave one of the earliest evidences of the spherical nature of the earth. Columbus, Amerigo, Captain Cook,vasco da gama riding on the wooden plank unfolded new horizons for mankind and mingled many civilizations giving the world a more cosmopolitan outlook. They corrected the world map and broke many myths in different parts of the world that holy cities are the center of the earth. They never let the fear of failure be an excuse of doing nothing and gave the most needed jerk to the civilization to move ahead. Without their contribution the Africans might still be following jungle rule and the whole North America and Australia have been longing for the first ray of civilization.

Now many say that as the technology has taken huge leaps forward so the element of unknown is being superseded by the matrix of computers’ cables, radars’ vision and the miracle called GPS. The business oriented marine industry is basically hiring a conglomerate of tool operators who heavily rely on artificial intelligence. Now there are no new lands to be discovered and the discovery portfolio has been transferred from marine fraternity to technological nerds. The sublime old days’ charm is being lost somewhere in the web of business obsession. Great are those are those intellectuals who share these thoughts in their A.C. chambers but ask their well being when the climates change hands, ask them if they have ever braved hot winds or spine chilling cold waves. But the mariners who cover several hundreds of miles in a day’s journey have to face abrupt climate and temperature change. They are the most flexible creatures that the mankind has ever seen in terms of adapting to any environment. Mariners rule the whole ocean right from the hot and moist equator to the freezing higher latitudes where the blend of ice and water is always eager to devour humanity and ships. They roam at places where even the weirdest creatures of Nature can’t survive. Send an Eskimo to Sahara and a Sahara resident to arctic. Will they survive even when given full facilities? There are so many bards to sing poetries for soldiers serving at freezing posts but has anyone taken the pain to praise the unsung heroes (mariners)as they face the same extreme conditions and that too on an element(water) which is not very familiar to humans. Even the slightest of mistake will take a mariner mighty close to the icy hands of death. And those who feel that technology has absorbed adventure from shipping line ask them how much humans know about the secrets and mysteries of oceans? A whole lot of bespectacled scientists have used all their brain and tried every technology that this planet has ever witnessed but are unable to solve the mystery of Bermuda triangle. Artificial intelligence’s intelligence ceases when it encounters the complexities of Nature. Every day is a new day out at sea; any day has never being anything like it before, never will be again. So each day sea teaches a mariner a new thing. Also qualities to become a good mariner come more from experience than knowledge.
But the fabric of society has its own different structure. It is a point where adrenaline and testerone loose there importance and money plus status take center stage, because money is the most egalitarian force in society and confers power on whoever hold it. Shipping belongs to that wider part of firmament where the pay scales which are gettable for mariners are only imaginable for others and no taxman lightens your purse. Even after the service at sea the mariners remain in high demand in the marine world. Many sailors after quitting the profession have started their own small scale industries and have made big profits. Many people coming from low income group now have many zeroes in their account. This is the only profession which guarantees its employee the metamorphism from lower or middle income class to upper middle class to higher class(only loyalty to the profession is required). That is why once you set for sail you will never fail.

Keeping aside the adventure and money factor, let’s talk about even more important things; health, inner self and life. I have seen people in Mumbai coughing out crores to get a couple of rooms to have a sight of sea and to get a feeling of proximity to Nature. Only a few lucky enough enjoy sea side villas and the rest population seems to be very very busy for nothing. Even if they pause for one minute sixty others overtake them and the rat race for money are forcing them to do things which only results in a few bucks but a thick pile of medical bills. People live in places like beehives where even the sun would find himself lucky if its rays would find access there, where ventilation and hygiene are terms worth only to be kept in dictionary. But a mariner in the midst of ocean and under the open sky breaths the purest air that this planet has to offer. He lives, plays, sings, thinks and works in the lap of Nature. Here the world ceases to be the scene of anyone’s personal prejudices and face the world as a free being admiring, asking and observing the beauty flaunted by the creator and thus we enter the world of tranquility and solitude. Those who think solitude is a curse to this profession better read the famous quote” best thinking has been done in solitude and the worst in turmoil”. Our inner self sprout and our imagination find wings in solitude. Solitude is the most precious thing that over 6 billion people long for it on one quarter of earth and only a handful enjoys it over three quarters of the world.
If I am saying it as the best profession then I wrong millions of others who are on the other side of my school of thought who prefer IITS, MBAS and other professions over it. On the contrary we find the news romanticizing IITS, MBAS and other professional streams flooding the media and the consciousness of common people. As far as I think the whole hype and framed glory about the other professions is a conspiracy of media. Living in an age of advertisement we are perpetually disillusioned. The perfect life is spread before us but it changes and withers by mere screwing with statistics. For example it is said about IITS that it has produced largest number of millionaires per captia pass-outs compared to any other undergraduate program. But when I looked at my own institute I found anyone spending 15-20 years of sea service achieve that milestone and even these who leave this profession join other profession which is financially rewarding too. Then the cadets passing out from premier merchant navy institutes must be much better off in terms of number of per captia millionaires. Another damned conspiracy Surfaces when the pay packages of IIMS go public. The eight figure whopping salary woos the whole generation but actually out of that pay package only half cash is being pocketed by the employee and the rest half contains performance bonus, conveyance and residential facilities. And in return they are made to work for 13-14 hours a day fixing their bottom on cushioned chairs. When the mariners enjoy the charm of Nature their cornea scans for data and when health and flamboyance flushes from the personality of a mariner, receding hairline and increasing waistline characterizes an entrepreneur. They have made a few successful persons the whole face of their industry.
Exploring the vast ocean with 20 odd men requires discipline, dedication to work and the most important integrity. Leadership qualities are endowed by the sea to the officers of merchant navy. Mariners are the movers and shakers of the world since they move hence the world move. Mariners handle a huge chunk of the world trade. Stagnation is a word which has no place in the life of a mariner. Paulo Coelho once said “In medieval period people wanted to become either sailors or shepherds because they are never glued to one place and with the place they leave the worries and complexities of life also”.

Salary & Govt. Concessions for a Member of Parliament (MP)

Monthly Salary : 12,000

Expense for Constitution per month : 10,000

Office expenditure per month : 14,000

Traveling concession (Rs. 8 per km) : 48,000 (For a visit to Delhi & return: 6000 km)

Daily BETA during parliament meets : 500

Charge for 1 class (A/C) in train : Free (For any number of times) (All over India)

Charge for Business Class in flights : Free for 40 trips / year (With wife or P.A.)

Rent for MP hostel at Delhi : Free

Electricity costs at home : Free up to 50,000 units

Local phone call charge : Free up to 1,70,000 calls.

TOTAL expense for a MP per year : 32,00,000

TOTAL expense for 5 years : 1,60,00,000

For 534 MPs, the expense for 5 years : 8,54,40,00,000 (nearly 855 cores)

And they are elected by THE PEOPLE OF INDIA, by the largest democratic process in the world, not intruded into the parliament on their own or by any qualification. This is how all our tax money is been swallowed and price hike on our regular commodities……. Think of the great democracy we have………….

MY VIEW:

AND THESE “HONORABLE” MPs DEMAND TO REDUCE THE SALARIES OF CEOs OF VARIOUS COMPANIES WHO, IN MY OPINION, ARE THE REAL NATION BUILDERS. I AM A FIRM BELIEVER THAT TODAY ITS NOT THE GOVERNMENT BUT THE VARIOUS INDIAN COMPANIES THAT ARE RESPONSIBLE FOR THE INDIA GROWTH STORY.

IT WAS THE PRIVATE COMPANIES THAT BROUGHT TELECOM REVOLUTION BY THEIR INNOVATIVE SERVICES AND STRATEGIES, IT WAS THE EFFORTS AND INNOVATIONS BY THE PRIVATE COMPANIES THAT BROUGHT THE BANKING REVOLUTION, IT IS THE PRIVATE SECTOR COMPANIES THAT HAS BROUGHT A TURN AROUND IN THE INDIAN JOB MARKET AFTER PATHETIC CONDITIONS TILL MID AND LATER 90s.

JUST AFTER INDEPENDENCE THE CENTRAL AND STATE GOVERNMENTS WERE FORMED WITH THE PROMISES OF PROVIDING ELECTRICITY, WATER, INFRASTRUCTURE, RESERVATION FOR JOBS AND EDUCATION AND ALSO BETTER MEDICAL FACILITIES, NOW TODAY WHATS THE SCENARIO, IT HAS NOT AT ALL CHANGED, EVEN BY A SMALL DEGREE. THE CONGRESS PARTY WHICH I THINK HAS RULED FOR MORE THAN FIFTY PERCENT OF INDEPENDENT INDIA’S AGE, IS STILL ASKING VOTES FOR SAME AGE OLD BASIC CITIZEN NEEDS, IT IS STILL SURVIVING ON THE AGE OLD POLL AGENDAS LIKE RESERVATION, ELECTRICITY, INFRASTRUCTURE ETC. THIS IS AGAIN PROVEN IN THE VERY NEW POLL CAMPAIGN “BHARAT NIRMAN”, WHICH GIVES CREDIT FOR TELECOM REVOLUTION ETC TO THE CURRENT GOVERNMENT.