• …When innocent eyes give way to independent looks
  When small little hands gesture you to go and let things be….
  …When soft gurgles slowly get replaced with commands !
  It is time for you to realize that your bundle of joy is growing up. Your cuddly little baby has set himself firmly on a growth route. And that it is high time he moves away from the confines of the home to a preschool !!!

Intro to the need and base

In his modern life of nuclear families, when it comes to parenting we are all beginners. A child starts learning invaluable lessons from the time he takes his first breath. In this world where there is an acute shortage of household help and this atmosphere of increasing competition for th e parent as well as the child. Though a child has the support and guidance of their parents who help them in take ing every step in their life, there is almost no one to give the right advise to the parents for the insurmountable decisions which it has to take for the ultimate goal of their lives ‘the development of their child.

One of the major decisions include the decision of which place should the child be sent which would enhance is abilities to catch up with eh others and even be better than the best from the time he enters school.

The questions that come to their minds are “how am I supposed to trust a stranger to love my child and watch over him as I did?”, how much time from home can he handle?, two days? Three? Five? Full or half days? What programme and curriculum does he need? What if my child isn’t happy? What if he gets sick? What if he doesn’t get along with the other kids? What if. What if.., and What if……………??? And their parents cannot suggest them about a place as its only been some 25 years since the time people have realized that just how crucial those first years are for children’s learning and development. And that in the ages of two to five children’s brains are growing at the fastest rate

But the one most important thing that every parent wants is that a wise, warm, gentle and graceful person to take my child to the puppy room and familiarize him with the knowledge he needs about the environment & world where he will live forever

To solve this ever-impounding jeopardy of every parent we present the complete child development center named

“Wonder kids… Your child’s new home “

a misconception with many parents is about the concept of a preschool which is that of a day care center where parents leave their children while they work . But what we provide is a complete development of each child’s social, cognitive, language & motor skills

PLAY SCHOOLS IN INDIA

India is a land where family bonding is quite strong and a child begins his first years of education perpetually from home. Why? Because it is believed what parents and grand parents can teach, none else can. But with time, this trend is slowly changing and play schools are gaining popularity. Especially so in the cities where joint families are giving way to nuclear families and where both parents are working.

Play Schools come as a boon to working parents. Now, parents are eager to send their toddlers to schools as soon as they turn two. Not only because they feel these pre nursery schools are safe but also because toddlers seem to learn faster when they interact with children of their own age. And play schools in India are definitely witnessing a boom as leading international preschool chains choose various cities in India to set up their operations.

The services offered in generality

What we concentrate upon is each ‘Teachable Moment’ – that is the time, which is the first encounter with a certain situation, which is a chance to steer a child toward understanding and away from fear and anxiety. But most of all the technique is about turning a child toward his or her essential self without fear or shame, with pride and excitement. The most essential art of course is our ability to find these teachable moments because this is where real education happens

We involve parents as partners in their child’s learning, to whom our staff communicate unconditional love for each child, developing a sense of wonder, discovery and achievement in each child. We embark upon a personal teaching philosophy, which all parents can take home with them along with which we give a lesson of respect for our children – as they are. The toughest thing about being a good parent is to encourage a child’s authentic self to emerge and blossom unfettered by our preconceived wishes and expectations.

We run on the philosophy of using love to bring out the best that is in every child. Attentive love that holds up a mirror to a child’s best self and reveals a world of imagination and discovery that is the widest field any child can play in. love is the key that unlocks the door of exploration and flings it open wide, an one this has happened, no one can ever slam it shut.

So we welcome you to this new world that opening for your child. Today we shall inform you about basically two aspects

1. Our programs, health regulations , class sizes and admission policies

2. Lessons in unleashing your children’s minds and hearts and letting go of your fears about releasing them into their own wide world

The goal of this institution is to ensure that the student’s first school experience will be a journey filled with learning, trust, affection and Growth

Our Faculty

Our staff goes through a 3 months training course covering the aspect of development theories, educational philosophy and psychology, which gives them a uniform approach toward the children. We not only provide your child’s development but a warm outstretched hand every parent is looking for.

The role of the teacher at Wonder Kids is that of a facilitator, who facilitates learning and skill development of a child. All of our teachers have received international standard training that enables them to understand children perfectly. Our staff undergoes regular on the job training and is kept updated with the latest trends in teaching and early childhood development. The teachers are also warm and caring, they understand that each child is unique and make special efforts to cater to the needs of every child in the pre-school

Our teaching cum supervisory staff consists of teachers of Montessori’s with at least 11 years as at this age that is generally of 30 the women are well settles in their lives and can devote complete attention to the job per se

And the teaching staff will be with 2 years experience after their Montessori certification. So basically our staff is that category of people who have formally dedicated their entire lives for the development of children, who are not only theirs but of others around them

Our Philosophy

“Learn to love what you do and you will learn all what you want to do “

“Anything learnt is never forgotten, what ever is forgotten was never learnt”

Our programs

They provide quality care, socialization, enrichment, play and education along with the million learning opportunities, which they will face with every step that they take

They will interact with groups of children of the similar age but different cultures, professionally planned activities, which provide a basis for later learning in a safe and regulated environment

Pre School

This guiding principle for the playgroup program is to help your child master the skills needed to succeed in school and social life. Our program introduces your child to a more structured day with stimulating activities group interactions and numerous opportunities to be inquisitive as he travels along he path of discovery. As children n this age are always n a moment imbibing information through all their senses. Our monthly curriculum is based on real world sensory experiences in order to cater to the need. Your child will spend major part of the day singing dancing laughing and playing and exploring indoors and outdoors. Besides he will be encouraged to learn grow and discover at his own natural pace

Our nursery program teaches essential skills like pre reading pre writing pre math science and social skills in a logical natural sequence that encourages children to learn one step at a time

The core areas science and sensory area dramatic play area blocks and manipulation area computer corner and creative arts area

1. Parent and toddler program- age 0.5 – 1.5

Giving parents a formal approach for their child’s upbringing so that they do not unknowingly hamper their child’s progress in any way while showering their unconditionally blind love on them

Interactive funology for mummy & baby; 9-18 months By providing an opportunity for mothers and babies to learn more about each other in a supportive learning environment, KUDDLES initiative provides an age-appropriate programme to facilitate learning.

The activities include

Basics of good teaching

Respecting your child

Physical development

Types of intelligence

Left brain and right brain

Encyclopedia Knowledge

Anger- your child’s enemy

If we are suddenly told by our friends or by a partner that I am going out of station for a couple of days

We are full of questions as to why where how long means of transport and with whom in the same way a child is also scandalized and wants these answers to these questions so keep n talking to them and inform them in advance

Don’t scare them with anything cause all phobias are created in a child’s mind by the words like ‘ill tell papa/teacher and don’t go in water you’ll fall sick etc”

1. Play group

This program is suitable for children in the age group between 1.5 to 2^1/2 years. The best way to initiate the young children in the Playgroup into the world of learning is through playing. For the learning process to be fully assimilated, it is essential for the child to be an active participant - we believe that the joy a child gets from discovering and exploring on his own is unparalleled by anything a teacher can ‘teach’ him. We ensure that appropriate toys, teaching aids and materials are used to stimulate intellectual growth and develop motor skills - this method makes learning fun for the young child.

1. Nursery

This program is suitable for children in the age group between 2^1/2 to 3^1/2 years. The Learning by doing philosophy is implemented through hands-on activities in this program. When a child learns by doing, he is able to learn more quickly than if it was taught to him without his participation in the process. What he learns by doing on his own - with a little help from the teachers - he understands and retains forever. A good educational foundation is laid in the Nursery Program as pre-reading and pre-writing skills are imparted to the child at this stage. Other basic concepts like shape and colors are also explained through entertaining mediums like stories and puppetry.

1. All day preschool - Full day course for parents who work full day which is open year round

Unlike a normal preschool which works half day and follows the public school holiday schedule and summer breaks. This also has a half-day pre school version.

The special activities for this section would include the following

Main activities

Children’s Designer Clothing

A tie up with this all India brand in ready-made garments of children called “KITTENS” who would be launching their summer and winter collections through fashion shows done by these children along with which they will be sponsoring our fashion show at the festival “star wars”. This will give parents and children a close look to decent and latest dressing styles.

Special Photography of children on campus

While in the middle of their days play those important moments will be captured by our photographers which will be invaluable treasure for each parent which they can cherish for life

Concept weeks

Each week will have a certain specific concept with different activities for different age groups

This entire week on focusing on a particular aspect will move it from the short-term memory to long-term memory. This is called permanent learning. According to the age group the same topic will be discussed and taught in different levels of depth and detailing.

The areas of focus will be

Colors

Shapes

Vegetables

Fruits

Vehicles- Big & Small

Places

Animals

Picture story

Puzzles

Time

Food

Games and sports

Movies

Advertisements

Kitchen

First aid

Electronics

A special annual inter preschool fun festival named “Super Kids” (“Expressions”)

Which will have events specific to age group of the child, which will bring out the best In the child without giving him a platform to display the special abilities learnt in school during the year before all other pre school in Bombay

Events include

Dance

Elocution

Nursery rhymes

General question and answer round on selected topics

Sports

Know your parent?

The Quick search &

Fashion show

The other activities are: -

• • • Phonetics

    • Mini train rides

    • Puppet shows

    • Personal safety training

    • Card board play houses

    • Yoga

    • Ballet

    • Nursery rhymes

• Computer based Games

Odd alphabets, Spider count, Bubble Trouble, Blooming Gardens, Cheese Hunt, Color Eggs, Connect 2,DriversEd,Fishy Game, Granny in Paradise, Ladybugs, Oggy and the Cockroaches, Music Keyboard, Twins, Dot game

• • • Doll making

    • Sports

    • Library

    • Educational toys

    • Block building

    • Play park

    • Picture and colour identification

    • Parties and celebrations

    • Stuffed animals

    • Educational toys

    • Cartoons and

    • Letter painting

Preschool Convocation Ceremony

Convocation ceremony for all students on the annual day where will celebrate their successful completion of pre-schooling and get motivated to rule the schools that they will be headed towards

Kindergarten: - 3 to 5 yrs

In the kindergarten we have a special provision for developing special discovery areas, which are step up by the teachers as per the curriculum requirements to help your child discover and learn

These areas are as follows: -

Painting and collage

Clay art and modeling

Computer area

Project work

Reading and writing

Math concepts

1. Junior Kuddles

Children between 3 to 4 years are part of this program.
In this junior kindergarten, the main objective is to facilitate a smooth transition from pre-school to primary school. Importance is laid on activities that promote child development, motivating the child to verbalize his/her thoughts and feelings on the world around them. Our method encourages child-centered learning as opposed to teacher-directed learning. Of course, various concepts are explained through songs, stories, experiments, field trips, group discussions and demonstrations. Here they are motivated to observe and be aware of the environment around them stress is also laid on activities that promote language development and instill confidence to verbalize their thoughts feelings and emotions

1. Senior Kuddles

The senior Kuddles program consists of children between the age group of 4 - 5 years.
At senior wonders, our classrooms are designed as learning and discovery corners. Children learn best when there is a planned curriculum of activities focused on a particular theme or concept. Some of the innovative learning methods at Senior Kuddles are painting and collage, clay art and molding, computers, project work, reading and writing, maths concepts. Here the emphasis is lad on building vocabulary and applying the concepts already learnt at junior wonders they learn to read and write and complex subjects like math are taught using a child centric approach

The special activities for this section would include the following

Activities for 3 to 5

Handwriting

Computer based learning

Martial arts

Ballet class

Yoga

Mini Swimming pool

Skating

Wealth from waste

Elocution and recitation

Drama and sports

Play parks

Story reading

Clay modeling

Craft

Stuffed animals

Educational toys

Mind games

Children’s stores

CRAFT and ART activities

Decorate Eggs for Easter

Paper Chains

Painting Pots

Game of Shapes

And occasional events like

Magic shows

Picnics

Parenting resources

1) The ISP (Infant SSY Program)- The Joy of Parenting

This course is for mothers from pre-birth to 5 years.

Which talks about brain growth and brain capacity

Vision for your child

Say and Do

Talking in slep and expecting parents

Asking your children the question WHY? In the same way in which they ask you

Allowing your child to experience

• Mobility

  • Walks on different surfaces

  • Climbing and slides

• Manual

  • Peeling of seeds

  • Puzzles

• Balance

  • Rocking on a pillow

  • Walk backwards and sideways

• Reading

  • Stories in different languages

• Mathematics

  • Make your child count and add and subtract in daily life situations

  • Use actual sticks for teaching multiplication

• Involve child in your problems and discuss it with them. You will be surprised with their suggestions

• Five senses

• Converting short term memory to among term by association, outstanding effort and repetition

• Being a YES parent from a NO parent

1. Here are a few common behavioral problems that a child faces:

   1. Shyness

   2. Hyperactivity

   3. Eating problems

   4. Temper tantrums

   5. Phobias and fears

2) Child Progress Report

Along with our website providing detailed information about the daily activities and child’s progress on a weekly basis

1. New parent classes

With interesting facts and training with your child

1. Parenting news letter

Summer Fun

Special programs in individual activities understanding their interest and aptitude areas

Future Programs

Teachers training program

A complete training environment focuses on developing the soft skills needed while handling small children whose entire life is n the manner in which they are approached by the teachers.

Growth through Partnership networks

School Infrastructure

As this is the first time that the child s stepping out of the home environment emphasis has been lad on the comfort of each child which reflects clearly and the

1. 1. • Colorful fun rooms

      • Positive pictures which stimulate learning

      • Age appropriate furniture

      • Motivating banners and write ups

      • Non toxic toys

      • Interactive books and puppets that combine to make the surroundings playful and fun

to be in

1. 1. • Entry- guarded with security who are also trained to handle outsiders and innocent kids

      • Reception

      • Sections

a) Pre-school

b) Kindergarten

1. 1. • Library

      • Washrooms and

      • Pantry

      • Outdoor play area

This environment promotes independence meaningful play social interaction and more importantly a love for learning that sets the course for his life time of learning

The day would include

1. • Transition

It is very important that a child feels at home in a pre-school. At EuroKids, while maintaining the discipline of a school, we have also ensured that the ambience and the teachers make the child comfortable. The child learns in a safe and secure environment, in rooms that are cheerful and fun to be in. This enables the child to express himself and his creativity freely. As a result, he develops his skills easily and inculcates them for a lifetime.

• Prayers and attendance

• Free play

• Clean up

• Singing time

• Concept time

• Snack time

• Art time

• Story time

• Outdoor activities

Home-cooked lunch program to help parents ensure their child is eating a fresh and balanced meal each day, lunch option provides the ideal solution. With each month’s menu being approved by a recognized nutritionist, all food (vegetarian; no eggs, no nuts, no artificial coloring, no artificial flavoring, no artificial preservatives), is cooked on the premises following strict standards of food hygiene.

We will offer children the option of eating a fresh meal cooked as an alternative to bringing a packed lunch from home.

Based on successful morning snack and afternoon tea initiatives of Dr. Kara (nutritionist and dietician)- where even the fussiest eaters can be found eating fresh fruit and home-made snacks - Kuddles is now extending that menu to include lunch which will provide a balanced diet for the children

Interest rates on home loans for new consumers have come down by around 4% since September end 2008 but consumers who had the misfortune to take their loan before that have only seen their rates drop by around 1.50% – 2.25%.  

 

We are inundated with anguished queries from existing customers where they raise concern about this partial treatment like “I have taken a floating home loan from XXX bank in 2005. At present the interest rate I am paying is 12.5% whereas for new customers it is around 9.25%. Why this discrepancy? Isn’t there any rule that forces the banks to pass on benefits to existing consumers as well? Can I take legal recourse? “

 

Firstly fixation of floating rates in this manner is in direct contravention of existing RBI regulations. See this article for details of this regulation (http://blog.apnapaisa.com/2009/09/15/why-some-regulations-are-more-important-than-others/) . So your best bet is to file a complaint to the banking ombudsman about the non following of the regulations.

 

But if that is too slow for your tastes you as a consumer have other options as well to benefit from the drop in rates.

 

You too can take advantage of the drop in interest rates if you have maintained a good track record of payment with your existing lender.

 

As a first step, you will have to devote a bit more time on this major financial obligation than you probably have done so far.

 

Secondly find out what interest rates the lenders  (including your existing lenders) are offering in market for new consumers. This can easily be done from the comfort of your home or office by referring to price and feature comparison sites such as www.apnapaisa.com.

 

Thirdly if your existing lender is more or less in line with the market, your best bet is to make that valuable call to your existing lender to say that you want to pre-pay the loan and want a statement of overall dues so that you can make the pre-payment. Almost every single bank will offer you an option to shift to the rates that they offer to new consumers (or very close to that) on payment of a fee.  If you are the lazy type and cannot be bothered to do much more, you can accept this offer and still save significant monies over what you are currently paying. But ideally if you are of the type that wants to get the best possible deal and are willing to work for it then read on…

 

Before you decide to switch lenders, shop for a better deal. It is necessary to get a fair idea of the offers available from other potential lenders. Remember for these other lenders you are a new customer and they will offer their best rates to you. Approach various lenders with the intent of transferring the loan.

 

With new lender, the process largely resembles that of taking a new home loan. You will have to fill in an application form with the requisite details annexed with photocopies of all the property documents that you had   submitted to your existing lender. The new lender will do the legal and technical vetting of the property as well as valuation and then you will get a sanction letter from them outlining the terms and conditions of their loan to you.

———————————————————————————————

Pointers:

1.      Maintain good track record of payment

2.      Shop for the better deal

3.      Compare various deals offered by banks/ lenders

4.      Approach lenders with the intent of transferring the loan

5.      Be prepared to undergo some operational grind before the loan is taken over

———————————————————————————————

Now comes the tough operational part before you can actually start enjoying the lower interest rates from the new lender.

 

You will need the following letters from your existing lender:

 

A) Letter giving the details of the amount to be paid to completely settle the entire loan. This letter will have to mention the details like total loan amount taken, the loan amount outstanding as well as the prepayment charges, if any. The amount mentioned will be calculated as on a future date, to enable time for the buyer to arrange the payment. This letter is pretty standard and should not be too tough to get from the existing lender.

 

B) Letter listing all the documents held by them as security for the home loan. In most cases if you have an official receipt for the documents submitted to them at the time of disbursement then this letter may not be needed.

 

C) Letter from your existing lender addressed to your new lender agreeing to release the documents of title directly to them (the new lender) within a fixed number of days after receiving the full payment from them. It’s this letter that causes the issue particularly if your existing lender does not want to cooperate (after all he is loosing a good customer). There is no compulsion on your existing lender to give any such letter to a third party (your new lender) with which it has no contract. This is the letter for which you have to do a couple of rounds to your existing lenders office to get them to issue it.  

 

Once you get this letter from the existing lender, the new lender will make payment in favour of the existing lender to close the account and also collect the documents from the old lender.

 

You can then go ahead, enjoy the fruits of your labour.

 

Most people build a nest egg for their retirement by investing a regular sum of money into a Systematic Investment Plan (SIP) of a mutual fund or buy a pension plan from an insurance company or regularly invest in a bank recurring deposit or government backed instruments such as PPF and NSC, etc. A very few well-informed consumers are also opting for the newly launched New Pension Scheme.

 

But there is another very effective means to build a sizeable pension corpus - Buying another residential house for the purpose of deriving rental income as well as long-term capital appreciation.

 

I will illustrate this with an example.

 

Mr. Prabhat Varma has ability to pay a down payment of Rs. 2 lacs and can service an EMI of Rs. 6,000 every month (in other words he is able to save Rs. 6,000 per month).

 

This means that he can invest in a house worth Rs. 11 lacs for which he will be able to get a loan of around Rs. 9 lacs. The EMI for this 20-year loan at 9% is around Rs. 8,100 per month, which Mr. Varma will easily be able to pay from the rental income (estimated at around Rs. 3,000 per month), clubbed  with the existing savings of Rs. 6,000 per month. The tax deduction on the home loan (for rental properties the tax deduction will continue even under the new Direct Tax code) and any potential increase in rent in later years is just an icing on the cake.

 

Even if we assume a rather conservative 10% p.a. capital appreciation the property will be worth Rs. 74 lacs at the end of 20 years. Thus the easy availability of home loans even for residential property bought for the express purpose of renting it out effectively turns this investment into a SIP into real estate. 

 

While Mr. Varma crystallises his plan for another house purchase, he should keep few of these things in mind:  

 

1)      This is not about the house that you are staying in, the house in question here is  purely for investment purpose. 

2)      An investment horizon of at least 10 years is needed for this to be effective,  so if you are planning to retire by 60, and then this is not for you if you are already above 50 years of age.

3)      This is much riskier than a bank fixed deposit (the expected returns obviously are higher to compensate for the higher risks) and so if your risk appetite is low then this investment is not for you

4)      A meaningful Real estate investment will require much larger initial investments as also much larger continuing investments. Also the flexibility to miss an regular investment instalment is not available since the continuing investment is by way of loan repayment.

5)      It is not important that whether you would have yourself liked to stay in that house or not. You should buy from a rental perspective. In fact buying a house in smaller towns that you have some knowledge and connection with, might be a great decision given the fast pace of growth that is likely to be experienced by smaller towns and might give good returns over a long period of 20 years.

6)      Investment in real estate is a relatively high maintenance investment in terms of dealing with societies, finding and dealing with tenants, etc.

7)      Though state and local laws are fast changing tenancy laws in some states and property taxes in some cities make renting out a property a non-viable option. So avoid investment in such areas.

 

 

So this investment proposition is ideal for the likes of Mr. Varma who like saving regularly in traditional assets such as real estate.

 

How about you? Are you like Mr. Varma?

The home loan war seems to be hotting up.  The private sector players (HDFC, ICICI, Axis,LIC housing Finance) are all providing loans at around 9.25% floating to their new consumers (including to existing borrowers of other banks wishing to shift their loans). For once the PSU banks seem to be using attractive structured offerings to provide stiff competition to the private lenders.

Suddenly the PSU banks are raining offers on the home loan consumers (including long suffering existing consumers of other banks).  The Canara bank offer of completely fixed rates for the next 5 years (see http://blog.apnapaisa.com/2009/06/23/canara-bank-new-home-loan-scheme-does-it-make-sense/) was quite popular and SBI has also come out with a good offer.

For Loans upto Rs. 30 lacs the details are as under :

8% fixed for 1st year , 9% fixed for 2nd and 3rd year and the consumer can decide today between a floating rate thereafter at 2% below SBAR prevalent at that time (current SBAR is 11.75% so if SBAR remains the same the rate will be 9.75% after 3 years but actual rate will be known only at that time) or a fixed rate after 3 years for the 4th and 5th year at 1% below SBAR prevalent at that time (so if SBAR remains constant for 3 years then the fixed rate after 3 years will be 10.75% but actual fixed rate for 4th and  5th year will be known only then) . There are no processing charges and no pre-payment charge if the pre-payment is made from your own sources.

Sources within HDFC have correctly pointed out that if you take the average rate (assuming that the rate from 4th year onwards will be 9.75% floating) then it works out to 9.35% for SBI versus 9.25% for them.

However given the uncertainity surrounding interest rates and more importantly the tendency of all lenders (contrary to popular opinion the PSU banks also have a similiar behaviour pattern) not to pass on the benefit of reduction in interest rates to their existing “floating rate” customers , it is always safe to go for fixed rates as long as they are economically priced and even if only for a few years.

It is here that the SBI plan scores over the other lenders who lend only on “floating rate” basis. Personally I would still rate the Canara Bank scheme higher than SBI as it provides for a fixed rate for 5 years with other charges that are the same as SBI.

The mighty sales machinery of SBI is already in full flow and their local level managers seem keen to do business for once. Let us see how the consumers re-act to this new scheme. Afterall the consumer is supreme.HDFC

Health care costs for hospitalization in India have risen sharply in recent years in tandem with global trends. Many a family has seen their financial planning go for a complete toss due to unexpected costs on hospitalization of a family member. Also due to increasing exposure to media there is a far bigger consciousness about medical insurance. In fact the biggest question asked to us by first time mediclaim buyers is which is the cheapest mediclaim policy?

Unfortunately if this is the only parameter used by a consumer he is likely to end up making a wrong choice. An example will illustrate this point:

If you have diabetes, would you (all other things being the same) rather buy a mediclaim policy that may be a little more expensive but will immediately cover the hospitalization expenses arising from complications connected with this disease (heart problems, kidney or eye problems associated with diabetes) without considering them as pre-existing disease rather than a comparatively cheaper policy which treats all such diseases as pre-existing and hence not immediately coverable.

The following paragraphs lays down the broad parameters apart from premium which you must compare before you buy:

1) Pre-existing disease: This is probably the most important parameter. The relevance is because if a disease is treated as pre-existing then the policy normally provides no coverage or very restricted coverage for expenditure incurred due to that disease in the immediate future. The various things to be considered under this head are

a. Definition of Pre-existing disease: Most policies provide that any disease that was present at any time in the past (including any disease which the insured person may not have been aware of) is treated as pre-existing. But some have a narrower definition, which may extend to only diseases for which the insured person had sought consultation for or was treated for or he was aware of during say the last 4 years. The narrower the definition the better it is for the consumer

b. After how many years of continuous coverage by the company will the pre-existing disease get covered: This is important as after the expiry of the cooling off period even pre-existing diseases get covered. A fine point is to find out if the company you are considering allows your track record of continuous coverage from another insurance company for the purpose of calculating this cooling off period or insists only on continuous coverage with itself for this purpose.

c. Special dispensation for diabetes/hypertension: Diabetes and hypertension have acquired epidemic status in India with one estimate putting the figure at around 5% of India’s population. Also a host of illnesses/diseases such as heart disease, kidney failure, paralysis, stroke, eye problems can trace their root cause to either diabetes or hypertension or both. Since the definition of pre-existing illness includes any complications arising there from, this has been a major reason for disputes between the mediclaim providers and the consumers in the past. Now some insurers provide immediate coverage for at least complications arising from this (ese) disease(s) even though expenses on treating the main disease itself may not be covered. If you already have diabetes/hyper tension then this is a vital consideration for you. Off course it comes at an additional cost and may also involve pre-acceptance medical tests. All these factors need to be taken into account before taking a decision.

2) Sub- limits: Sub limits mean where the overall coverage is broken down into the maximum payable for a particular kind of expense. For eg. A few insurance companies now provide that room rent cannot exceed 1% of the covered amount or that doctors/consultants fees cannot exceed 20 or 25% of the covered amount. Whilst most of these sub-limits are reasonable it is better to take a decision after being aware of them.

3) Co-Pay requirements: Quite a few companies now require that the insured bear a certain percentage of the eligible expenses either unconditionally or under certain conditions. This is called a co-pay requirement. Some companies provide a discount in premium if you agree to co-pay. Some others might want a co-pay if you choose to get treated in a non network hospital or others may have a co-pay for choosing a single air conditioned room or for getting treated in a hospital in a higher cost city. The co-pay feature is built in to ensure that the insured chooses the appropriate hospital/room/doctor level relevant to his economic status and also watches the reasonableness of the charges levied by the hospital to ensure that there is no overspend or overcharge just because of the existence of the mediclaim policy. Again there is nothing inherently unfair about this provision as long as you take a conscious decision after being aware of it.

4) Specific Exclusions: Almost all policies have general exclusions such as costs incurred for Aids/Sexually transmitted diseases or congenital diseases, etc. However some policies have specific exclusions that may be relevant to you.

5) Maximum Coverage Amount: This is important, as a particular policy that suits you may not be available for the amount of coverage that you seek.

6) Maximum age at entry: This is relevant for senior citizens as quite a few policies may not be available to them.

7) Renewability upto what age: This is relevant for senior citizens as well as people in their 50s since they need to be able to enjoy the benefit of their track record

This is not a comprehensive list of parameters by far. Each policy may have specific positive or negative features that may be relevant to you such as restricted coverage for angioplasties or certain other kind of treatments or features such as free diagnostic tests offered after a certain number of claim free years, etc.

Now presumably it is far clearer why you need to study the policy features rather than just buy the cheapest policy available. The parameters listed have been summarized in the accompanying table.

In the next article in this series I will cover the debate on whether to go in for individual policies or for a family floater policy.

So best of luck with your hunt for the most suitable mediclaim policy.

Parameter	Relevant for
Definition of Pre-existing disease	Consumers having pre-existing diseases
Cooling off period for pre-existing disease coverage	Consumers having pre-existing diseases
Special dispensation for diabetes/ hypertension	Consumers suffering from diabetes/ hypertension
Sub-limits	All consumers
Co-pay requirements	All consumers
Specific Exclusions	All consumers
Maximum Coverage amount	More relevant for senior citizens
Maximum age at entry	More relevant for senior citizens
Renewability upto what age	More relevant for senior citizens

Indian cricket team skywalks in Australia.

If you are wondering what these headlines are doing in a personal finance blog let me explain.

Millions of dollars are riding on these celebreties. In fact for the cricket team it is probably in billions rather than millions. I am sure they are insured to the gills against accidents. Given the amounts involved  i am sure the packages are specially designed for them. Am very curios to find out if their policies cover accidents that may be caused while engaged in such adventure sports . Did the thought of insurance coverage cross their minds at all while they were engaging in these high risk sports ?

Any information is most welcome ……

In any case even if the celeberities are covered because they have access to high quality insurance brokers what about the common folks. A close friend of mine was recently describing his bungee jump in South Africa.  He had no problems but he clearly was not aware that he had no insurance coverage if he had suffered from any injuries. I have myself done para sailing on a trip overseas (even after going through the policy wordings i am not sure i would have been covered in the event of an accident) . We have already read reports of the unfortunate death in Bangalore from a bungee jumping accident. Off Course Life insurance cover is available for death from this accident but the medical expenses would not have been covered if he had survived.

Shouldn’t these facts be known more widely and shouldn’t the people running these sports be required to provide warnings to their clients apart from the release forms that they normally get signed.

Views welcome………

P.S. Preity - if you ever read this - my daughter is a big fan of yours

While much is being reported in the media about the significant dip in property prices, in actual practice most large developers are still holding on to their prices.

Though off course, they are trying to boost sales by throwing in freebies such as free stamp duty and registration, free parking, no charge for floor rise, etc.

Coming to home loan rates, banks are decreasing their interest rates on home loans and property prices are reportedly softening.

But will it be effective in raising consumer demand?

Does that mean that it will be easier to get loans?

Will banks give loans willingly?

Will consumers come forward to take more home loans?

The questions remain…

The fact remains that to a large extent, the lending and borrowing scenario has not brightened in spite of banks reducing the loan rates and some news of dipping real estate prices. Of course existing home loan consumers are happy that their inflated EMI burden will reduce somewhat.

However it seems these boosters are not sufficient to lift the spirits of Indian consumers who are grappling with financial insecurities. The overall economic slowdown, global news reported by the media, job loss, job insecurity, uncertain future of businesses/enterprises, volatility in the stock markets are a few reasons that may keep potential borrowers from investing in residential property (and therefore taking any home loans). Moreover additional taxes on real estate such as the 5 per cent value added tax (VAT) and 4.5 per cent service tax are obstacles in the way of boosting demand, be it for property or property loans. These costs have to be borne by the buyer.

To add to the number of speed-breakers in the way of these two inter-dependent sectors, there are the tightening eligibility norms. Lenders have made their norms more stringent. They have raised the margin required for a home loan because property prices could go down further.

The real up tick in demand will come when the consumer feels confident about taking on long term liabilities. We should watch for the Consumer Confidence Index (CCI) figures, which have been slipping downwards almost every quarter of late.

Predictions in a volatile scenario such as the current times are difficult. Interest rates need to see a further revision southward to be able to boost the demand for home loans. Similarly, property prices should see a visible correction to encourage the demand for realty and thus home loans. But most importantly, consumer confidence needs to be boosted.

Maybe wait and watch should be the buzzword for now.

One strategy that could to benefit in this bearish trend would be the ’strip’ strategy. This strategy is considered the bear market adaptation of the ‘straddle‘ strategy. It’s developed on the concepts of ‘at-the-money’ and ‘in-the-money.’ Let us focus on the terms that require understanding before moving to the actual strategy.

Strike Price: The price at which the option holder can buy or sell the item underlying the option from the writer of that option.

Example
An ABC 50 call option gives the holder the right to purchase 100 shares of ABC stock at a price of Rs. 50 per share. On the other hand, an ABC 40 put option gives the holder the right to sell 100 shares of ABC at a price of Rs. 40 per share.

At-the-money: Options are defined ‘at the money’ when the common stock price is equal to the strike price.

In-the-money: A call option is defined ‘in the money’ when the strike price is less than the market price of the stock. A put option is in the money when the strike price is greater than the market price of the stock.

Ok, that’s clear, then? Let’s move ahead to our main plot.

Strip strategy involves buying a number of at-the-money calls and twice the number of puts of the same underlying stock, strike price, and expiration date.

Investors can take the most benefit from this strategy whenever the market has a bounce back. This could happen due to measures such as CRR rate cuts, Repo rate and Reverse Repo rate cuts, PLR and SLR rate cuts by the RBI to increase the liquidity for banks and investors, the government announcing stimulus packages for certain sectors, or steps taken by the US central bank to make the global financial market stabilize. This would be the right time to execute this strategy if, as an investor, you are convinced that it is a bear market relief rally and direction of the market in the near term is going to remain south.

Profit Potentiality: This strategy has the potential for large amounts of profit when the underlying stock price makes a strong move either upwards or downwards at expiration, with greater gains to be made with a downward move.

Risk: The risk is limited in this strategy. The maximum loss for the strip occurs when the underlying stock price on expiration date is trading at the strike price of the call and put options purchased. At, this price all the options expire worthless and the customer losses the net premium and commissions paid.

Computation of break-even points: There are 2 break-even points for the strip option strategy. The break even points can be computed as given below:

• Upper break-even point (BEP) = Strike price of calls/puts + net premium paid

• Lower break-even point = Strike price of calls/puts - (net premium paid/2)

Example: ABC stock is trading at Rs. 2000 in December. An options trader implements a strip strategy buying two January puts for Rs. 120 per share as premium for strike price of Rs. 2000 and a January call for Rs. 100 per share as premium for the same strike price. The net debit taken to enter the trade is Rs. 34,000. The market lot size as 100 shares.

If ABC stock is trading at Rs. 2500 on expiration in January, the January puts will expire worthless but the January call expires in the money and has an intrinsic value of Rs. 50,000 (500 rise in per stock price x 100 lot size). Subtracting the initial debit of Rs. 34,000 the strip’s profit will be Rs. 16,000.

If ABC stock price reduces to Rs.1500 on expiration in January, the January call will expire worthless but the two January puts expires ‘in the money’ and possess intrinsic value of Rs. 1 lakh (i.e. Rs. 50,000 x 2 put options). Reducing the initial debit of Rs. 34,000 the strip’s profit will be Rs. 66,000.

On expiration in January, if ABC stock is still trading at Rs. 2000, both the January puts and the January call will expire worthless and strip will suffer the loss of the Rs. 34,000 paid as premium to enter the trade.
The 2 break-even points in this case will be:

• Upper break-even point = Rs.2000 (strike price) + Rs. 340 (Rs. 120 x 2 put premium + Rs. 100 call premium) = Rs. 2340.

• Lower break-even point = Rs.2000 (strike price) - Rs. 170 (Rs. 340 i.e. net premium/2) = Rs. 1830.

In this example the stock has to break the price band of Rs.1830 to Rs.2340 to be profitable i.e. decline below Rs. 1830 or appreciate beyond Rs. 2340. If the stock price fails to break the price band upper and lower BEP investors will end up losing the entire premium paid for executing this strategy.

The strip strategy could be the right option-trading approach for investors who are bearish on the market and expect it to correct in near future.

On vacation earlier this month my wife and I visited a casino during an evening with friends. We were clearly the poorest of our group. We started setting a limit to the amount we would lose that evening. Like all our friends, we lost. The difference in amounts lost was just a matter of decimals.

The losses showed us who paid for plush setting of the casino, good liquor and food, served “free.”

The capital markets are in some ways akin to a casino. Large advertisements by merchant bankers, stockbrokers and mutual funds are paid for - by the person in your mirror.

I have written earlier about methods of analysis. At the risk of repeating them, then: they are fundamental, technical, and logical. Call them the three guides to making money.

Three ways of losing money would be:

1. Gambling on horses, cards or at the casino - the fastest

2. Women - the most pleasant

3. Speculating on the stock market - the most certain and definitely the most boring

Add to these, a fourth - watching too much TV or reading too many expert opinions, mine included. Rewind to the beginning of the last boom and early April 2003 when the jokers on TV suggested a drop to 2,200 for the Sensex from 2,800. Less than a fortnight later, this same bunch was speaking of the Sensex going up to 6,000. There had been no fundamental change during those two weeks.

Fast forward to January 2008: 25,000 was almost the overnight target, 40,000 in the rather near future, for the Sensex (which was then at 21,000). During a meeting with a brilliant fund manager recently, he showed me a clip from a TV channel. It had a number of the most respected names in the capital markets providing sound bites on the Sensex crossing 20,000. Everyone was advocating a buying spree. There was to be no end to the boom.

Now the same purveyors of garbage suggest 6,000 and lower. The difference is that we have a fundamental change in lower earning forecasts, which was obvious even before Diwali 2007 when the index was around 20,000. Will the experts be correct in their bearish forecast? Unlikely for an extended period, would be my guess.

Yes, they will be for a few days, or weeks. Fear and the memory of recent losses will ensure the investor will refrain from committing fresh money to the markets. But the smart money that exited the markets in January, close to their peak PE of 30 on the Sensex will nibble at choice stocks on offer, now at a market PE of about 10. Along the way will be opportunities to grab at the feast table - opportunities such as a payment crisis, the failure of a large institution, announcement of elections or formation of a Government, when shrill loudmouths, only distinguishable by their shrillness, from Mayavathi, Jayalalitha, Mamta Banerjee, Yechury, and the Karats confirm their idiocy on TV. Each occasion such as the ones mentioned above that causes a temporarily sinking Sensex, the smart money will refill its pockets with the crème de la crème of the equity markets.

Start loosening your purse strings in bits and build a quality portfolio. Take a couple of years doing that, for the opportunity cost of money in a stagnant market would mean an erosion of 50% of your money’s risk-adjusted value in 3 or 4 years. At 10%, the current bank FD rates, your money doubles in about 7 years. Expecting double that rate of return on equity investments is fair considering the market risk, thus leading to my above assumption. However, the markets might just surprise and double next year or stay flat till 2015. I am not gambling on the time frame!

Getting into an SIP in mutual funds, or directly in a personal portfolio is a good idea now. This will likely be a good sum in 10 years, if not sooner.

Meanwhile, if you decide to visit that casino carry just as much cash as you believe you’d pay for a nice evening. You will also find that it’s a lot more fun losing it yourself, than on the advise of an expert.

Naveen Fernandes is Vice President - Sales at Orbis Financial Corporation Ltd., a SEBI approved custodian. He is a Certified Financial Planner. On good days, he fancies himself an investment expert.

The equity markets were up with a bang. The bulls had a party and celebrations post Diwali festival. It is considered as a remarkable recovery from the bottom. Well, it seems difficult to talk about whether this bull party will last for a long time. Global economic issues have still not been resolved and how much of that it’s going to affect other emerging markets, including India, is difficult to predict. The markets are facing many negative news and higher volatility in the day-to-day sessions. It’s getting difficult for investors to take a position in these market conditions. This is where the straddle strategy will play a vital role for the investors to hedge the position and profit from it.

This strategy is built on the concept of call and put options. Let’s understand what these mean before going in-depth to understand straddle.

Call Options - A call option gives its holder the right to buy a specified number of shares of the underlying stock at a predetermined price (strike price) between the date of purchase and the option’s expiration date.

Example: An investor who bought an ABC December 1000 call option would have the right, but not the obligation, to buy 100 shares of ABC common stock at a cost of Rs. 1000 per share at any time before the option expires in December.

The right to purchase common stock at a fixed price becomes more valuable as the price of the underlying common stock increases in the bullish trend.

Put Options - A put gives the holder the right to sell a specified number of shares of the underlying common stock at a predetermined price (strike price) on or before the expiration date of the contract.

Example: An investor who bought an ABC December 1000 put option would have the right, but not the obligation, to sell 100 shares of ABC common stock at a cost of Rs. 1000 per share at any time before the option expires in December.

The right to sell common stock at a fixed price becomes more valuable as the price of the underlying common stock decreases in the bearish trend.

Now let’s understand how the straddle strategy operates for investors. Fundamentally, a straddle is the simultaneous purchase of a call and a put on the same stock, with the identical strike price (the price at which the holder can sell or buy from the writer of the option) and expiration month. Typically, the buyer of a straddle anticipates a substantial movement in a stock but is uncertain what the direction will be. Because the investor is betting on an extraordinary stock movement in this the volatile markets. The probability of profiting is good.

A straddle buyer risks losing only the amount of premium (the price that the buyer of an option pays and the writer of the option receives). The maximum loss occurs only if the price of the stock on the expiration date of the options is exactly equal to the strike price. Although it is difficult to lose the entire premium paid for the straddle, it also can be difficult to make a profit. Either the put or the call side of a straddle is almost certain to expire worthless. As, a result, the stock has to move substantially for a profit to be made. Considering the trend of last few trading sessions there were many intense moves for investor. Therefore, it’s considered one of the best strategies to bet on these volatile markets, where the swing in stock prices to different levels in multiple/one trading session gives the opportunity for investors to fill their bag full of profits.

Example:

An investor purchases both a put and a call on a stock, paying Rs. 250 for the call and Rs. 200 for the put. Therefore, the total premium cost would be Rs. 450. Suppose the underlying stock’s price is Rs. 3000 and the strike price of the options is Rs. 3000. If the price of the stock rises above Rs. 3450 or drops below Rs. 2550, the investor will make a profit. Only if the stock expires at a strike price of Rs. 3000 will the investor lose the entire investment. The investor loses only part of the investment at any other price between Rs. 2550 and Rs. 3450.

The investor earns a profit if the stock sells at a price exceeding Rs. 3450 or drops to less than Rs. 2550. If the stock rises to Rs. 3750 per share and the investor exercises the call at Rs. 3000, the investors profit is Rs. 300 (Rs. 750 - Rs. 450 premium). Alternatively, if the stock drops to Rs. 2150 per share and the investor exercises his/her put at Rs. 3000, the profit is Rs. 400 (Rs. 850 - Rs. 450 premium). Thus, the investor is assured of a profit only if the stock moves by more than Rs. 450 in either direction.

The above strategy and example were discussed considering equity markets. This strategy is also useful to hedge a position on commodities in commodity market.