Thumb rule - If you are investing for less than 15 year than you must go with mutual fund, and if you are investing for more than 15 years than you must go with a good ulip plan.
Thumb rule - If you are investing for less than 15 year than you must go with mutual fund, and if you are investing for more than 15 years than you must go with a good ulip plan.
It’s a common confusion which is the best investment option. Mutual funds are cheaper, But only in the short run. Over a long period (may be 15 - 20 yrs) ULIP will give you a better return over Mutual funds as the fund management charges are lower than mutual funds. It’s a small factor but the FMC are taken on a daily basis by NAV adjustment and over a long period it will eat in to your fund value. Also there are other charges pertaining to MF such as marketing expenses, Custodian charges, Trustee fee, audit fee which are not visible to the investors. Also tax benefits are not available in mutual funds except for ELSS.
The insurance element in child care plans are that if something happens to the insured, the child doesn't have to pay anything for premium and coverage goes on till the last. Which is not the case in any other investment product.
ULIPS also provide valuable insurance cover at a cost lesser than Term insurance plans. So a combination Term and Mutual funds is costlier than stand alone ULIP over the long run.
Most of you suggest to go for Term Insurance with combination of mutual fund. Please suggest me some good mutual fund for the SIP of atleast 15 yrs. What strategy should I adopt for such a long term?
Funda of ULIP plans
1. Min investments for 12 - 15 years .
2. Go for monthly paying mode in maximum equity exposer
3. If your motive is life insurance (1st), investment & tax benefit.
4. Can't take out before 3 yrs.
5. Expert agent / advisor needed for proper switching to gain 58% p.a.
Funda for mutual fund
1. Term for 2 - 3 yrs.
2. Motive is only investment.
3. SIP is best way to invest / else when market is down 1500 points .
4. Can redeem after 1 year with 10% gain (without any exit load)
5. Proper market watch required