Now a days one video has gone viral where one person at the age of 75 year sells toys for making living. He travels daily 150 KM to and from Delhi to sell the toys. He was the manager at one big American company before retirement. You can see it here.
After seeing the video I was wondering how many people after seeing this video will take charge of their own financial life and plan for retirement and start investing for the same.
ULIP is unit link insurance plan, which provide insurance as well as capital appreciation of the premium paid. ULIP provides the combination of two products in the premium of one. So what are the problems with ULIPS?
1. Un-sufficient Insurance
Before purchasing insurance plan we should know how much cover we required. ULIP provides very less life cover with high premium. For most of the ULIPs premium paid is tax exempted under section 80(c) subject to premium is not more than 10% of sum assured hence most of ULIPs life cover is 10 times of premium paid. Suppose I want 20L life cover then I have to purchase a ULIP with the premium of 2L. Is this cover is justified with this premium?
Long-time back I got call from XYZ Insurance agent and the conversion was like this.
Agent :- Sir we have very good Insurance plan with guaranteed return.
Me :- How much?
Agent :- 5.5% + life cover worth of 20 times of Premium.
In this part I am going to explain the general terms which is used in mutual funds.
Funds category determines by the fund’s portfolio. Large Cap Fund :- Invests in large cap company stocks. Mid Cap Fund:- Invests in mid cap company stocks.
