Professional Documents
Culture Documents
Fomento Resources opened its 22nd medical clinic at Sacorda on 02-12-2010. The clinic was inaugurated by a few of the village elders. The
local Sarpanch and members of the Panchayat were also present at the occasion. In his speech, the Sarpanch dedicated the clinic to the
The clinic plans to provide medical facilities of good standards to the local community of Sacorda.
The spirit of Christmas filled the halls of New Dawn Ashadeep- A school for special children (120 students) who were greeted by Santa Claus
in his colourful Christmas attire with a bag full of goodies on 22nd December, 2010.
It was a treat for the children who set up the Christmas tree and danced with Santa Claus to the Christmas melodies.
The little children at Ashadeep enacted the play on the nativity of Child Jesus followed with dance performances, snacks and story - telling.
hope.
M. Mallikarjuna - the headmaster of the government middle school of Dharmapur shares his name with Doctor Malliakrjuna, a veteran doctor
of Sandur who sadly passed away last year. Like, Dr Mallikarjuna, he too is a quiet behind the scenes care giver ensuring that Fomento
Resources’ help in giving support to his school and children is received and used well.
Mr. Mallikarjuna - headmaster of the School from Dharmapur, Sandur
He began teaching as a junior teacher in V. Naglapur- a small village in Sandur taluka. After a decade, he was transferred to government
middle school, Dharmapur in Sandur. He says: “The government of Karnataka cannot reach all villages but companies like Fomento have
augmented the governments work by providing infrastructure to schools and students.”
For Mr. Mallikarjuna, school is his life and students his family. The happy faces of his wards is his only reward.
A ROYAL RETURN
Her surname is royal, but her life is not. Nisha Ghorpade - a descendant of the royal Ghorpades of South India is the daughter of a humble
Today, Nisha has hope and a bright future which could restore the pride to the Ghorpade family. A class six student of the government
middle school at Yeshwantnagar, Nisha is one of the early recipients of the Gyan Jyoti Puraskar of the Ashiyana trust of Fomento
Resources.
Ghorpade senior enthuses: “I have seen companies which help children of their own employees only it is only Fomento which comes forward
to help bright students who need financial help. I thank them”
A dream is unfolding in Yeshwantnagar. N.H Sharmash – a fifteen year old milk delivery boy is about to become an adult.
Sharmash supplies milk packets at the crack of dawn to help his father, a coolie and his mother who weaves threads on a charkha. All will
change, once Sharmash completes class ten at the Shree Ujjayani Jagadguru School at Yeshwantnagar and moves to Bellary for a higher
education.
This is a dream which came true due to Sharmash being conferred the Gyan Jyoti Puraskar – a merit scholarship, instituted by the Ashiyana
trust of Fomento Resources.
The scholarship supports his transition from student and part time milkman to his ultimate dream of being a doctor. His chosen place of work
will still be Yeshwantnagar.
The Mines Safety and Productivity Council, (Goa, Sindhudurg and Kolhapur) is a premier industry council, which includes members of
various mineral companies. These members follow a mission statement of supervising and establishing standards of safety in the mineral
resource industry.
An annual activity of the council is the Mines Safety Week held in Goa, Sindhudurg and Kolhapur. The 39th edition of the Mines Safety week
will be hosted by Fomento Resources at operational locations beyond Goa, between November 15th 2010 and November 22nd 2010 and at
operational locations within Goa between November 18th and November 27th 2010.
Activities and discussions during the week will focus on the critical issues of safe mining practices and provision of accident free
environments. Mr AK Meghraj - Convenor of the Council and Mr Ambar Timblo - Managing Director - Fomento Resources and President of
the Mines Safety and Production Council have stressed the importance of these discussions for the 39th Annual Mines Safety Week. Mr
Timblo has conveyed that Fomento Resources will render support to deliver this message of safety. Fomento Resources, as the host
company have agreed to sponsor the shield for the “Lowest Accident Frequency Mine” for the last three years.
Prior to the commencement of safety week, there will be activities such as a “First Aid Camp” at Bicholim, North Goa from October 20th-23rd
2010, demonstrating a variety of safety drills and practices. A critical evaluation survey performed during the safety week will be the trade
test where key on field personnel from mine mechanics and foremen to tippers and truck drivers will be evaluated. In addition these activities,
a noise and illumination survey at mines will being conducted on October 30th 2010.
In conclusion to the week, an inspection of all mechanised mines, stone quarries and manual mines will be held from November 18th –27th
2010. A team of senior officials from mining companies will inspect each mine. Senior members of Fomento Resources Alliance will be part
of the inspection team.
The final day function of the 39th Mines Safety Week will be held at Ravindra Bhavan in Goa on December 12th 2010.
ULIPs : An introduction
Most importantly, what are ULIPs? Here, you will find all the information you need to set your mind at ease about how to invest in
ULIPs, and which ULIP is right for you.
ULIPs are a category of goal-based financial solutions that combine the safety of insurance protection with wealth creation
opportunities. In ULIPs, a part of the investment goes towards providing you life cover. The residual portion of the ULIP is invested in
a fund which in turn invests in stocks or bonds; the value of investments alters with the performance of the underlying fund opted by
you.
Simply put, ULIPs are structured in such that the protection element and the savings element are distinguishable, and hence
managed according to your specific needs. In this way, the ULIP plan offers unprecedented flexibility and transparency.
Working of ULIPs
It is critical that you understand how your money gets invested once you purchase a ULIP:
When you decide the amount of premium to be paid and the amount of life cover you want from the ULIP, the insurer deducts some
portion of the ULIP premium upfront. This portion is known as the Premium Allocation charge, and varies from product to product. The
rest of the premium is invested in the fund or mixture of funds chosen by you. Mortality charges and ULIP administration charges are
thereafter deducted on a periodic (mostly monthly) basis by cancellation of units, whereas the ULIP fund management charges are
adjusted from NAV on a daily basis.
Since the fund of your choice has an underlying investment – either in equity or debt or a combination of the two – your fund value will
reflect the performance of the underlying asset classes. At the time of maturity of your plan, you are entitled to receive the fund value
as at the time of maturity. The pie-chart below illustrates the split of your ULIP premium:
Types of ULIPs
One of the big advantages that a ULIP offers is that whatever be your specific financial objective, chances are that there is a
ULIP which is just right for you. The figure below gives a general guide to the different goals that people have at various age-
groups and thus, various life-stages.
Depending on your specific life-stage and the corresponding goal, there is a ULIP which can help you plan for it.
Retirement is the end of active employment and brings with it the cessation of regular income. Today an increasing
number of people have stated planning for their retirement for below mentioned reasons
Almost 96% of the working population has no formal provisions for retirement
With the growing nuclearisation of family structure, traditional support system of the younger earning members
– is no longer available
Pension plans from insurance companies ensure that regular, disciplined savings in such plans can accumulate over a
period of time to provide a steady income post-retirement. Usually all retirement plans have two distinctive phases
The accumulation phase when you are saving and investing during your earning years to build up a retirement
corpus and
The withdrawal phase when you actually reap the benefits of your investment as your annuity payouts begin
In a typical pension plan you have the flexibility to make a lump sum payment or a regular contribution every year during
your earning years. Your money is then invested in funds of your choice. You can opt to receive the annuity at any time
after vesting age (age at which you become eligible for pension chosen by you at the inception of the plan).
Most of the Unit linked pension plans also come with a wide range of annuity options which gives you choice in
structuring the post-retirement benefit pay-outs. Also at the time of vesting you can make a lump sum tax-exempted
withdrawal of up to 33 per cent of the accumulated corpus.
In a Retirement plan, the earlier you begin the greater you gain post retirement due to the power of compounding.
Let us take an example of Gaurav & Hari. Both of them want to retire at the age of 60. Gaurav starts investing Rs. 10,000
every year from the age of 25 till the time that he retires. In all, he would have invested Rs. 350,000. If his investments
were to earn 7% return every year, at the time of his retirement, Gaurav will have a retirement corpus of Rs. 13, 82,368.
Now, Hari starts investing 10 years later (i.e. at the age of 35) and in order to make up for the lost time, invests
Rs.15,000 every year (which is 50% more than Gaurav’s annual investment). So, by the time of his retirement, he would
have invested Rs. 3,75,000. And assuming the same annual return of 7%, he will end up with a retirement corpus of Rs
9, 48,735.
So, you see how despite setting aside more than 50% of Gaurav’s annual contribution, Hari ends up with a retirement
corpus which is almost a third lesser than Gaurav’s. That is the power of compounding.
Which is why, it is never too early to invest in a ULIP for retirement planning.
ULIPs for long term wealth creation
ULIPs are the right insurance solutions for you if you are looking for a strong wealth creation proposition allied to a core
insurance benefit. Such plans are ideal for people who are in their late 20s and early 30s and by investing in such a plan
get the flexibility of using it to fund any of their long-term financial goals such as purchase of a house or funding their
children’s education. The added element of life cover serves to make these plans a wholesome financial investment
option.
One of the most important responsibilities you have as a parent is to ensure that your child gets the best possible
education that can be provided. Apart from conventional schooling, it becomes important to expose your child to different
activities such as dance, painting and sports training for holistic development. As a parent, you want to ensure that their
development is not hampered either due to rising costs or unforeseen circumstances.
Today there are ULIPs that offer money at key milestones of your child's education thus ensuring that your child’s
education continues unhampered even if something unfortunate happens to you. While, the death of a parent is an
irreparable emotional loss, child education plans safeguard the child against the financial ramifications of the death of a
parent.
Apart from above mentioned benefit, child plans also offers below mentioned features.
Flexibility of adding on various riders like Income benefit rider, disability rider etc to get additional benefits .For
e.g. In case of income benefit rider, In the event of the death of the parent, the child will receive a regular pre-determined
amount every year to meet the educational expenses.
In case of unfortunate incidence of the death of a parent, not only will the child receive the sum assured
immediately but will also continue to receive money at the key educational milestones.
ULIPs for health solutions
When you are young and working you save for various goals like marriage, education, retirement etc. but saving for health
care is never considered or left for later. During these years we have various sources of income or savings on which we
can rely for health emergencies.
But with increasing cost of healthcare, proportion of this spend is increasing at an alarming pace. This is forcing families to
borrow or sell assets to meet expenses during medical emergencies. And during old age health care expenses increase
due to health deterioration because of age and higher incidence of chronic illness. Thus it is important for you to invest in
health insurance today so that tomorrow you are fully prepared to meet rising healthcare expenses, which would be
incurred during old age, with the right health insurance plan.
Health ULIP is a recent innovation from the health insurance industry. In a health ULIP part of your premiums are allocated
for investment designed specifically to build a health fund to meet future health related expenses. It aims to create a health
savings kitty by investing in a long term flexible savings plan with multiple fund options. The health fund thus created
allows you to claim for health related expenses of any kind and also fund your future health insurance charges. You can
also avail of tax benefit on premium paid u/s 80D.
When ULIPs work best?
Whether you are in the process of deciding which ULIP to invest in; or whether you already have a Unit linked insurance
policy to secure your important financial goals there are some key principles which should govern any decision related to
ULIPs. Adhering to these key principles will allow you to make optimum utilization of your ULIP.
Unit Linked Insurance (ULIP) plans are designed to help you meet your financial goals by ensuring you the value of your
investments, or your nominee sum assured, which is the life cover of your policy. To make sure that your ULIP is truly
working to assure your goal, you should choose a life cover that provides your family with adequate finances and hence
security even in your absence, so that important life goals of your family are always secured.
Let us take the example of a 35-year-old man with 2 young children. He could begin with a sum assured of Rs 5 lakh. As
the children grow and thereby the financial liabilities increase, he might want to increase the level of protection, which
can be done by increasing his sum assured.
Unit-Linked Insurance Plans (ULIPs) come with an in-built range of fund options to choose from – ranging from
aggressive funds (primarily invested in equities with the general aim of capital appreciation) to conservative funds
(invested in cash, bonds, and money market instruments with the aim of capital preservation) – so that you can decide to
invest your money in line with your market outlook, time horizon, and your investment preferences and needs. If you
have a high risk appetite, you can opt for a more aggressive investment option, and vice versa.
Additionally you also have the advantage of switching fund options to make your investments work in tandem with the
market. These days, various ULIPs also offer the options of life stage strategy which keep dynamically altering
themselves without you having to do any monitoring on your own.
Unit-Linked Insurance Plans (ULIPs) are meant to help you achive your financial goals over the long-term. As a short
term investment tool, they will not give you considerable return on your investments, because of a product cost structure
which is higher in the initial years. However, overall charge structure for the term comes down substantially over a long
period of time thus allowing greater allocation of your premium in the chosen funds.
To get the best out of your ULIP, you should remain invested in the ULIP for the long-term of at least 8-10 years. This
way, your investment will truly experience the power of compounding and thereby create greater wealth for you to fulfill
your important goals.
Unit-Linked Insurance Plans (ULIPs) are designed to meet two of your most important financial needs: protection and
investment. Both these benefits have some charges attached to them; important charges to know about before
purchasing a ULIP are:
Mortality charge
The important thing to note about ULIPs is that the overall charge structure in the long term comes down substantially,
thus allowing greater allocation of premium to your chosen fund, thereby helping to wealth creation. It may be noted that
insurers have the right to revise the fees and charges over a period of time.
Unit-Linked Insurance Plans (ULIPs) offer you benefits of life cove along with investment ULIPs offers features such as
top up, switch between funds, increase or decrease the life cover during the term of the policy, cover continuance option,
surrender options & range of riders which can be attached to the main policy to provide you added protection.
You should always insist on seeing the brochure so that you can make right choices of ULIP to secure your goals – be
it retirement planning, planning for your children’s education, or wealth creation.
Why buy ULIPs?
ULIPs are dynamic plans and are flexible by nature and hence allow for changes and high degree of customization in the
plan as opposed to most of the financial plans which once purchased cannot be modified. It is because of embedded
characteristics of transparency, flexibility, liquidity & goal based savings that ULIPs have emerged as preferred
investment option today.
The following subsections will not only help you to understand various attributes of ULIPs but also guide you to use these
features to manage your policy.
Flexibility
Flexibility to change your life cover : ULIPs give you the flexibility to choose your sum assured (insurance
cover) at the time of policy inception. Moreover, some ULIPs allow you to increase your sum assured over the term of the
plan. This is crucial as your protection needs keep on changing with time .Typically, greater the financial liabilities you
have such as repayment of a home loan, greater will be your need for protection.
Flexibility to change premium amount : With ULIPs you can easily change premium amount as most
ULIPs provide you the option to increase or reduce premiums after a certain period of time to match your premium
paying capability. Another distinguishing feature of ULIP is Top up which is an additional contribution over & above
regular premium so that if you receive extra money today you can invest the amount in your policy & maximize your
investment gains.
Flexibility to opt for a rider : ULIPs also enable you to customize the policy with optional riders to enjoy
additional protection. Riders are additional or supplementary benefits that are bought along with the main insurance
policy. Some of the commonly offered riders by most insurance companies are critical illness benefit rider, accident &
disability benefit rider, waiver of premium rider etc. For ex. a critical illness rider cover major critical illnesses like heart
attack etc. In case of contracting any of the above illness, the insurance company pays the insured amount.
Flexibility to choose your fund option : Most of the ULIPs come with an in - built range of fund options to
choose from –ranging from aggressive funds to conservative funds so that you can decide to invest your money in line
with your investment preferences and needs. What’s more, ULIPs even come with the option of switching between
different fund options so that you are able to reap maximum benefits from your investments.
Transparency
One of the key advantages that ULIPs offer is complete transparency which makes the working of a ULIP abundantly
clear to the investor. Thus, you are empowered to make informed decisions on how to best use your ULIP.
Benefit Illustration
As a customer it is your right to ask for a sales benefit illustration. Sales benefit illustration will help you understand how
premium paid by you is utilized & what are the charges deducted year by year, by the insurance company for the term of
the plan . It will also illustrate how your policy will grow in accordance with the choosen sum assured & premium. In fact
IRDA has mandated that all insurance companies use two scenarios with 6 % & 10 % return rate to depict future returns.
Once a policy gets issued, your insurer will send you a key feature document capturing all the essential features of the
plan. This is to ensure complete comprehension of the plan purchased.
Free-look period
ULIPs also offer you a distinct feature that no other financial product offers as of now. It is called Free-look period which
is a 15 day window during which you can close the policy & get paid back the entire premium less charge borne by
company in issuing the policy in case you are unhappy with the product.
Everyone needs to save for their important life goals. One of the prudent ways to do so is by investing in ULIPs which are
long-term systematic investment options designed to address key financial goals. ULIPs help you cultivate a disciplined
savings pattern which ensures that the money being set aside will go towards the fulfillment of the specific objective. In
the absence of such a focused approach, there is a high possibility of savings towards one objective getting utilized for
an immediate short-term requirement, thus jeopardizing the long-term goal. ULIPs are a potent safeguard against such a
tendency.
Tax Benefits
ULIPs are an efficient tax saving instrument too .The tax benefits that you can avail in case you invest in ULIPs are described below:
Health insurance plans and critical illness riders are eligible for deduction under Sec. 80D
The maturity proceeds or withdrawals of life insurance policies are exempt under Sec 10(10D), subject to norms
prescribed in that section
ULIP charges
Unlike conventional traditional products charges are segregated in ULIP & thus made known to the customer.
Sales benefit illustration : A sales benefit illustration illustrates various charges, year by year, for the term of the plan so
that you know exactly how much money is deducted as charges & what is invested.
Brochure : A brochures informs you about the various charges & their purpose applicable on your policy.
Advisor : You should enquire your advisor about all the charge applicable on your policy.
Although ULIPs offered by different insurers have varying charge structures broadly, important charges that you should know are:
Mortality charges
Mortality expenses are charged by life insurance companies for providing a life cover to the individual. The expenses vary with the
age and either the sum assured or the sum-at-risk which is the difference between sum assured and fund value of the insurance
policy of an individual. Mortality charges are deducted on a monthly basis.
The important thing to note about ULIPs is that the overall charge structure for the plan comes down substantially over a long term.
However it may be noted that insurers have the right to revise fees and charges over a period of time.
A plan which gives complete clarity about the various charges deducted and why it’s being deducted and so how your fund will grow
over time.
A plan in which you don’t know where your money is going or what is happening to it.
ULIPs can easily be customized to suit one’s needs & requirements. This is primarily due to range of features that ULIPS
offer to the customer. Below mentioned are few charges applicable in case you have opted for an additional feature.
ULIP BENEFITS APPLICABLE CHARGES
The wide range of ULIPs available in the market might make it difficult for a consumer to choose the correct ULIP. However if you were to
follow a few simple steps choosing the right ULIP can be a smooth process.
Other disclosures
Illustration projecting benefits payable in two scenarios of 6% and 10% returns as prescribed by the life insurance
council.
Broadly, insurance plans can be distinctly divided into ULIP (Unit Linked Insurance Plans) and traditional plans. A brief detail of both
segments:
ULIPs, or Unit Linked Insurance Plans, have gained high acceptance due to the attractive features they offer. Benefits include flexibility,
Transparency, Liquidity, and Fund Options.
Flexibility
A ULIP offers the customer an acute degree of flexibility: the flexibility to choose the Sum Assured, and to choose the desired premium
amount. ULIPs give the customer the option of changing the level of Premium/Sum Assured even after the plan has started, and the flexibility
to change asset allocation by switching between funds with ease.
Transparency
ULIPS offer a high degree of transparency, where all charges in the plan as well as the entire net amount invested is made known to the
customer. ULIPs also offer the convenience of tracking your investment performance on a day to day basis, so you can decide instantly where
you want your assets allocated.
Liquidity
A ULIP offers you the option of withdrawing money a few years into the plan, allowing for the exigencies of life. Alternatively, a ULIP will also
allow for partial/systematic withdrawal should the need arise.
Fund Options
A ULIP will offer you a wide choice of funds, ranging through equity, debt, cash, or a combination of the three. The customer is also afforded
the option of choosing your fund mix based on your desired asset allocation.
Traditional Plans
These are the oldest types of insurance plans available. These plans cater to customers with a low risk appetite. Some of the common
features of traditional plans are:
1. Steady Investment
1. Major chunk of investible funds are in debt instruments.
2. Steady and almost assured returns over the long term.
2. Features
1. Death benefit is Sum Assured + guaranteed & vested bonus.
2. Helps in asset creation as they are for a long tenure.
3. Premium to Sum Assured ratios are fixed for each plan and age.
4. Generally withdrawals are not allowed before maturity.
Retirement is the end of active employment and brings with it the cessation of regular income. Today an increasing number of people have
stated planning for their retirement for below mentioned reasons
Almost 96% of the working population has no formal provisions for retirement
With the growing nuclearisation of family structure, traditional support system of the younger earning members – is no longer
available
Developments in the healthcare space has lead to an increase in life expectancy
Cost of living is increasing at an alarming rate
Pension plans from insurance companies ensure that regular, disciplined savings in such plans can accumulate over a period of time to
provide a steady income post-retirement. Usually all retirement plans have two distinctive phases
The accumulation phase when you are saving and investing during your earning years to build up a retirement corpus and
The withdrawal phase when you actually reap the benefits of your investment as your annuity payouts begin
In a typical pension plan you have the flexibility to make a lump sum payment or a regular contribution every year during your earning
years. Your money is then invested in funds of your choice. You can opt to receive the annuity at any time after vesting age (age at which
you become eligible forpension chosen by you at the inception of the plan).
Most of the Unit linked pension plans also come with a wide range of annuity options which gives you choice in structuring the post-
retirement benefit pay-outs. Also at the time of vesting you can make a lump sum tax-exempted withdrawal of up to 33 per cent of the
accumulated corpus.
In a retirement plan, the earlier you begin the greater you gain post retirement due to the power of compounding.
Let us take an example of Gaurav & Hari. Both of them want to retire at the age of 60. Gaurav starts investing Rs. 10,000 every year from
the age of 25 till the time that he retires. In all, he would have invested Rs. 350,000. If his investments were to earn 7% return every year,
at the time of his retirement, Gaurav will have a retirement corpus of Rs. 13, 82,368.
Now, Hari starts investing 10 years later (i.e. at the age of 35) and in order to make up for the lost time, invests Rs.15,000 every year (which
is 50% more than Gaurav’s annual investment). So, by the time of his retirement, he would have invested Rs. 3,75,000. And assuming the
same annual return of 7%, he will end up with a retirement corpus of Rs 9, 48,735.
So, you see how despite setting aside more than 50% of Gaurav’s annual contribution, Hari ends up with a retirement corpus which is almost
a third lesser than Gaurav’s. That is the power of compounding.
Which is why, it is never too early to invest in a ULIP for retirement planning.