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Wednesday, August 4, 2010

Moneylife Foundation conducts seminar for senior citizens

On a rainy Saturday afternoon, Moneylife Foundation welcomed over 40 enthusiastic persons to its first workshop, especially customised to the needs of senior citizens. This session took note of how senior citizens are coping in the post-liberalisation economy where their costs have soared so much that their savings have been eaten up by inflation. It touched on issues such as wills, insurance and reverse mortgage products that help those who are 'asset rich' but have a meagre income stream.

Sucheta Dalal (Managing Editor, Moneylife magazine) spoke on 'Safety, Security and Financial Independence for Seniors'.

Debashis Basu (Editor & Publisher, Moneylife magazine) looked at safe investment opportunities, spoke on how to avoid financial mistakes and focussed on the reverse mortgage product in some detail. As always, he advised people to consider index funds as a safer way to participate in the markets and benefit from growth.

Mr Basu also explained the reverse mortgage product in great detail. There was a comparison between the product that was introduced in 2007 and the current one in 2009. The current product has two options. The first option will give more monthly income, but there is no return of purchase price. The second option will give less monthly income, but will return purchase price. The first option is apt for singles who do not want to leave any assets to anyone after death. The second option is apt for couples who want return of purchase price to legal heirs. The 2007 product gave out the least monthly income and hence was unpopular. The 2009 product is a much better one, because it has three-way collaboration between the life insurance sector, the banking sector and the housing finance market. The main drawback is that the monthly income is still taxable. There were a lot of questions from the audience on this topic, as it is a new as well as an interesting concept.

Seniors who attended the session also had the benefit of inputs from two key resource persons - Mr Nagesh Kini (Activist and Chartered Accountant who has audited insurance companies) and Mr Jayesh Desai (Partner of law firm Singhi & Company) - who participated in a very lively discussion on insurance products and the rules governing wills and transmission of assets.

India has nearly 100 million senior citizens but a very limited vision when it comes to senior citizens' issues; policies for senior citizens are announced but not implemented. And, even as they struggle to cope with soaring costs, senior citizens are often financially exploited - most often by family and people they trust - and they struggle to enhance income. A US study shows that 1 out of 5 senior citizens is the target of financial scams.

Ms Dalal warned seniors against investing in unregulated schemes or falling for chain and pyramid marketing schemes. She also spoke about the variety of Internet frauds that ensnare people, especially those who are unaware about how the Internet is prone to abuse. Ms Dalal also explained the difference between retirement communities versus old age homes, since the former are fast becoming an attractive option, with great facilities for seniors who are financially comfortable.

She also pointed out that senior citizens must use their experience and skills to consider a second job either as a source of revenue or as contribution to society. It was pointed out that many organisations were happy to offer flexible timings to seniors to benefit from their expertise.

Another issue that came up for discussion was the steep 500% hike in insurance premium by Reliance General. One audience member had purchased a Reliance policy for his parents three years back. It was becoming difficult to change the insurance company because the insured parents were now over 65 years old, hence it was difficult to get a new policy. There was also a discussion on insurers taking away cashless facilities from certain hospitals.

Read More:
Moneylife Foundation conducts seminar for senior citizens - Moneylife: Personal Finance Magazine

1 comment:

Retirement Homes said...

This is awesome, Seniors need to be educated from time to time about these topics.

For help with your search for an assisted living facility check out silvercensus.com!

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