Hello all,
I am 26. Single. Salaried.
I would like to get your advice on Life Insurance and Equity linked savings scheme. Please let me know if I am missing something or if I am wrong at any point.
After (re)searching a lot I have come to below conclusions
1. One should never mix life insurance and investment. Be it ULIPs, endowment plans or whatever the cover provided is very less when compared to term insurance for the same premium. what is the use if cover provided is not adequate, right?
2. I have also come across some theories saying one should go with increasing cover to adjust the cover for inflation. I don’t agree. As your age increases, your need for insurance decreases as you would have acquired assets (financial or physical). So you are less dependent on insurance to cover your family expenses.
3. One should not blindly go for a plan cheaper premium. One should “ideally” look at the claim settlement ration not the price. Hardly the premiums differ by 2000 to 3000 per year. So I am planning to go for LIC plans.
4. One should go for online plans as they are cheaper than the regular plans as it bypasses the commissions paid to the agents etc.
Questions?
1. How much should the cover be? How do i decide? some say it should roughly be around 20 times my current salary. Please suggest.
2. Should I for accident disability rider or critical illness disability rider? I am of the opinion that this should be a part of my health insurance plan not life insurance. I have no idea about Health insurance. So Suggestions are most welcome.
Now after my PF and Term insurnace there is about 1 lakh to be invested for tax saving purpose. I have the appetite for ELSS. I thought about MF retirement funds but I think it’s too early to plan for retirement sincei t’s long term investment. I am looking for short term investments. So I think ELSS is best for me.
Is there any guide about choosing ELSS? I don’t know much about ELSS. I have lot of questions. Any suggestions are wleocme.
Sorry for the long post and thanks in advance for your suggestions.