5TH February 2016, Hyderabad: The institute-industry interaction sessions are very common in the ecosystem of Vignana Jyothi Institute of Management, Hyderabad. On 5th February, 2016, Mr. P Naresh Kumar, Cluster Manager- Sales training, PNB MetLife India Insurance Co. Ltd. graced the week’s interaction session.
Mr. Naresh started the session by decoding the real meaning of “insurance”. The word “Insurance” is often perceived as a policy meant for “life”. Whereas “Insurance” is a policy in which an individual receives financial protection. Insurance can provide protection for an individual, his assets and his business. The insurance industry of India consists of 53 insurance companies of which 24 are in life insurance business and remaining 29 are non-life insurers.
For insurance we need mainly financial planning determining an individual’s financial goals, purpose in life and life’s priorities, considering his/her resources, risk profile and current lifestyle, and detailing a balanced and realistic plan to meet the goals. The scope of planning would usually include 1. Risk Management and Insurance Planning, 2. Investment and Planning Issues, 3. Retirement Planning, 4. Tax Planning and Estate Planning, 5. Cash Flow and Liability Management, 6. Relationship Management and Education planning for Kids and the Family members. Why financial planning? To control inflation- cost of education/medical increasing exponentially, rising life expectancy, appropriate allocation, and protect lifestyle of family.
Net worth is the difference between the totals of your assets and liabilities. Determining the net worth is the first step in financial planning.
Cash flow plans are commonly used by business houses. Without a viable cash flow plan, a company could easily spend more than its revenue, putting it in peril. Unfortunately, most of us do not realize that a cash flow plan is important for even students. The principles that apply to corporate finance and to our personal lives are largely the same.
Budgeting is a process of tracking, planning, controlling inflow and outflow of income. Budgeting is important for insurance planning. Making personal budget is very easy and important too. In order to have the personal budget sorted, one needs to cultivate the habit of collecting bills, receipts and other documents which will help one monitor ones spending for the month.
Goal setting is deciding the end point of an individual’s planning exercise- determining where one aspires to be. “The more tangible the goals, the easier it is to plan toward their realization. Always ensure that your goals are S.M.A.R.T.,” says Mr. Naresh. “SMART- Specific Measurable Actionable Realistic Time bound.”
Specify your goal, the goal should be measurable, actionable. It should be realistic in nature and the most important thing is and should be complete within the time bound.
Thus the session on INSURANCE was finished with useful information about the insurance sectors.
– J Lakshmi Sowjanya
PGDM, PR Committee, VJIM