3 replies on this article “best beneift life insurance plan i.e. traditional, ULIP, Money Back”

1. Ramesh says:

   March 24, 2011 at 11:48 am

   As mentioned many times in the same forum, you need to follow certain principles:

   1. Keep investment and insurance separate as far as possible.
   2. Take insurance only if you have financial dependents. In your case, as i understand, your husband is making more money than you and you have a child. In that case, there is no need for you to have any insurance be it term or ulip or any other.

   3. Any investment carries multiple risks namely a short term fluctuation risk, long term inflation risk and the risk that the required corpus is not completed at the time of requirement. Take them one by one:

   – In short term, equities are very volatile, be it direct equity or equity MF. So for short term goals, they can prove very risky. While the fixed income instruments (inc. FD) and debt funds give you a fixed return with minimal downside risk. So, for short term you should opt for debt instruments.

   – In long term, equities give a very good return because “mostly” the companies will always generate more return than the money they get through debt. The fluctuations even out for equities (provided you have a diversified portfolio) and give you a far better return than debt instruments. also, returns tend to be above inflation. So for longer term goals, go with a equity oriented portfolio.

   Since you want to invest 5,00,000 per year, go for a staggered investment into equity MF (2 or 3 in number) through SIP or lumpsum at different intervals. Thats it. Keep separate folios for retirement and for children. A 5,000 SIP just means you have invested in 60k (about 12% of your total investment. That wont take you anywhere). Keep things in perspective.

   for a very long term investment, infrastructure funds are not for you.

   Keep it simple to track and manage.

   -Ramesh

   Reply
2. shibu ra, says:

   March 24, 2011 at 9:50 am

   Dear Sunil,

   Thanks for the advise however my requirement may seem different.

   My requirement is to save 5 lakhs rupees a year this is for both my retirement and my sons education.
   How should I invest? the risk factor for the investment should be low. Should I invest in my name or my husbands his income is higher.
   I have invested in my husbands name around 5000 rupees in SIP a month
   Have bought few shares for 10000/- and have invested 20000 in infrastructure bonds through dmat account.

   Reply
3. ashal jauhari says:

   March 23, 2011 at 11:46 pm

   Dear Shibu ra, For your dependents, the best policy is Term plan as it ‘ll provide a very high cover at a very low cost (Prem.).

   Thanks

   Ashal

   Reply

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