It has been mandated by the IRDA (Insurance regulatory and Development Authority) to allow policyholders to revive Unit-Linked Insurance Plan (ULIP) within two years of last premium paid. Till the policy is revived, the insurer will have to pay the policyholder a minimum guarantee of interest that will be linked to the interest paid on savings bank account of the State Bank of India, which is currently 4%.

The Rs. 44,000-crore domestic general insurance industry is in for a huge setback as the Insurance Regulatory & Development Authority (IRDA) is gearing up to raise the reserve requirement from 153% to 205% for the loss-making third-party motor portfolio.

Due to excessive claims, the third-party motor portfolio — the largest for domestic general insurers— generates heavy losses and is solely responsible for the underwriting losses for a majority of the companies. Third-party insurance is mandatory for all vehicle owners.

Where does your financial planning start and how should you plan your cash flows? It starts with identifying your financial goals and prioritising the list in terms of importance and time left to archive them. It is also important to keep in mind the expected future cost of these financial goals.

You must also analyse your cash flows and check whether you have the desired monthly savings. Remeber, the more time you have for achieving your goal, the higher exposure you can take in risky assets; the power of compounding works in your favor in the long run.