FAQ

FAQ

  • 1. Pension
  • 2. Insurance
Frequently asked questions about pension.
Frequently asked questions about insurance.
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  • 1. What is a Retirement Savings Account (RSA)?
     

    Every employee or contributor under the new pension scheme is expected to open RSA in his/her name with a PFA of his/her choice into which all his/her contributions and returns on investment are paid.

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  • 2. Are Pension Contributions Tax Free?
     

    Contributions to the new pension scheme are tax free.

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  • 3. How Will I Benefit From The New Pension Scheme?
     

    The new pension scheme will ensure that you receive your pension after retirement without any delay.

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  • 4. How Can i Know What is Happening To My Money?
     

    Pension Fund Administrators (PFAs) will issue regular statements of accounts and profit from investments to the employees.

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  • 5. How Much Will an Employee Contribute Into the New Scheme?
     

    An employee shall make monthly contributions of a minimum of 8% of the total of his/her monthly emoluments (i.e., monthly basic salary,transport allowance and housing allowance) into his RSA.

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  • 6. Will My Employer Also Contribute?
     

    The employer shall contribute a minimum of 10% of the employee’s monthly emoluments towards the retirement benefits of the employee.

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  • 7. Is the RSA Operated Like a Bank Account?
     

    The RSA is similar to a bank account except that no contributor can withdraw money from the RSA before his/her retirement. The PFA is required to invest the money and issue statements of account at leastonce every quarter to the contributor.

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  • 8. How Does Movement from One Employment to Another Affect my Pension?
     

    Movement from one employment to another does not affect pension under the new scheme. The reform has removed the bottleneck associated with transfer of service from one organisation or sector to another, especially with regard to qualification for pension and the sharing formula for payment of pension as between employers.

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  • 1. Why Buy Life Insurance?
     

    One of the most important reasons to purchase life insurance is to ensure your loved ones are provided for financially. Life insurance is also useful in helping your survivors pay bills and debts after your death, as well as for funeral expenses. It may be used for wealth accumulation and distribution as part of an overall financial strategy.

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  • 2. How Much Life Insurance Do I Need?
     

    Generally the amount of protection you need is a combination of what it would cost to help your surviving family members and dependents meet their current needs (like food, clothing, utilities, mortgage payments, etc.) plus future obligations (like children education and retirement funding) – minus the resources that your surviving family members could draw upon to meet those obligations (spouse's income, savings and investments, other income producing assets, and any life insurance you might already own).

    You may also want insurance for wealth accumulation or distribution purposes during your lifetime.

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  • 3. What If I Already Have Insurance Coverage?
     

    Even if you already have a life insurance policy, it's a good idea to review it periodically to make sure it still meets your overall needs. There are times in life you need to take a look at your financial situation, such as if you:

    • Were recently married or divorced
    • Had or adopted a child (or became a grandparent)
    • Have children or grandchildren who are about to enter college
    • Provide care or financial help to a child or elderly parent
    • Received an inheritance
    • Retired or your spouse has retired
    • Started a business
    • Changed/lost your job or salary.
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  • 4. What Factors Generally Drive Insurance Calculations?
     

    Premium rates for life insurance are typically based on factors such as:

    • Age, gender, height, and weight
    • Health status, including whether or not you use tobacco or nicotine
    • Participation in high-risk activities or occupations.
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  • 5. Is Life Assurance The Same As Life Insurance?
     

    Technically no, but the two terms are often used to mean the same thing. Strictly speaking, life insurance pays out if something happens to you just like your motor insurance, whereas life assurance pays out either at the expiration of the policy or when something happens to you (e.g death).

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  • 6. What's Term Life Insurance?
     

    Term cover is the most common form of life insurance and provides a lump sum payout if you die in the course of the policy.

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  • 7. What's Whole of Life Insurance?
     

    Whole of life cover is guaranteed to pay out when you die, meaning that it can be called life assurance. Because of the guarantee, it's more expensive than term cover.

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  • 8. What If I Already Have Insurance Through My Employer?
     

    Life insurance is offered as a benefit by some employers and is often known as 'death in service' cover. Make sure a potential payout would provide the level of cover your dependants need and remember that, if you leave or lose the job, the cover will stop.

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  • 9. Who Benefits from My Life Insurance?
     

    This is completely dependent upon who the policyholder specifies.

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