Money Matters

  • Ifthikar Bashir
  • Publish Date: Feb 26 2018 12:52AM
  • |
  • Updated Date: Feb 26 2018 12:52AM
Money Matters

How do I change my tax status from NRI to Resident for my NPS Account. Could you please specify the procedure how to do it?

Showkat Ali, 

Soura Srinagar 


There is no required procedure for NPS to update your tax status from NRI to resident Indian. However, on becoming a resident Indian, you must inform your bank (that you have linked with your NPS account) about your change of status within a reasonable time. Non-resident Ordinary (NRO) accounts have to be converted to resident savings bank account. Foreign Currency Non-Resident (FCNR) accounts can run till maturity. However, earnings in Non-resident External (NRE) savings account will have to be transferred to resident savings account or transferred to Resident Foreign Currency (RFC) account. Rest of the procedure remains the same as for resident Indian.


I have a life insurance policy and intend to make my LIC endowment a paid-up policy, will they still add and pay bonus at maturity? How do I get the current paid-up and surrender value of my LIC Policy?

Yasir Shah via e-mail 


Once you make the policy paid up, the amount gets locked for the remainder term which will only be paid out at maturity. No further bonus will be added to the paid up value. The paid up value will be proportionate sum assured based on the number of premiums paid as compared to the the total premiums along with a portion of declared bonus. To get the exact paid up value and the surrender value of your policy, you can contact your insurer.



I am an employee and have my employer covered Medical insurance through TPA services for Rs 5 Lakh. Do I still require to take a private health insurance ?

Moazzam Shafi via e-mail 


There are a few reasons why buying a health insurance plan may make sense even though you get medical insurance from your employer. Here are the points you need to think about. Firstly, your employer’s insurance coverage will only protect you as long as you are employed with the company. The policy will terminate when you quit the job or when you retire. Post retirement is perhaps the phase when one needs it the most but you won’t have it then. Moreover, buying a new insurance policy after the age of 50 means that there will be no coverage for pre-existing diseases. 

Lastly, health insurance policy you get from your employer may or may not cover your dependants.


Where should I invest the money that I have earmarked for emergency needs and how much should this amount be? Should they be kept in Savings account only?

Mohammad Amir via e-mail 


Emergency fund ensures that an unforeseen event does not upset your financial plans in a big way. The fund should generally be large enough to cover the monthly household expense of three to six months. It should be kept in liquid investment avenues like bank deposits, savings account with sweep in facility or liquid funds. You can keep some portion of the corpus in a sweep in facility that can be liquidated easily. The other portion can be kept in a liquid fund where you would get the money on a day’s notice.


Can we buy life insurance policies from LIC without agents (only LIC) if yes then what are the advantages and disadvantages?

Zuhair via e-mail 


LIC does provide the online insurance plans. Purchasing insurance online is convenient and cheaper than using an agent. Pure term covers are simple products. Websites of insurance aggregators also allow you to compare quotes from all leading brands and find the best deal. Online insurance purchases have their share of shortcomings, too. Since no agent is involved, you should read the policy document carefully and understand its implications fully.

There are some points that you need to remember while making online purchase of insurance plan. Ensure that you make a comparison of policies from various companies. You may do so by either going to companies’ websites or to aggregator sites such as Once you have chosen the policy you will be required to provide personal details such as date of birth, address, sum assured, medical history, your present state of health, etc. Ensure that you provide exact and correct details.

Do remember that the objective of an insurance cover is to acquire the sum assured amount when there’s a claim. In the case of an online term plan, your nominee has to coordinate with the insurance company directly for the claim settlement. But in the case of an offline plan, the advisor/broker is a one point contact and will work on your behalf to help you get the claim from the insurance company.


Is the present market phase right, to start a Systematic Investment Plan (SIP) in equity funds for a long time?           

Ramiz Ahmad, Bijbehara


It is always the right time to start a Systematic Investment Plan (SIP) in an equity mutual fund. It is true that the market has corrected a bit. But nobody can say with certainty whether the market would fall more or start going up from the current levels. That is why investors shouldn’t place their investment decisions solely on the basis of market levels. Irrespective of the market conditions, investors should go ahead with their investment in equity to meet their long-term goals. An SIP over a long period will help them to average the purchase cost and enhance the returns from the investment.