investments in LIC is
a misnomer.
LIC should not be an avenue for any investments.
it is an insurance company.
for investing in MF, a demat account is not absolutely necessary.
so, from the options listed below, you are left with PPF and MF.
PPF: has a lock-in period of 15 years. it is best to open a PPF account now and start depositing small amounts every year, and increase your deposit amount as you move closer to the 15-year endpoint.
the returns are completely tax-free.
MF: other than ELSS(lock-in period of 3 years), every other equity Mutual funds can be redeemed anytime.
returns are linked to market conditions.
choose a MF product which has a reasonably good longterm track record and invest systematically (SIP)
Keep insurance and investment separate!! Buying a term insurance allows you to do this ,Insurance is an EXPENSE, not an INVESTMENT! You DON'T WANT to get any returns out of insurance
Beyond that, LIC is a reasonable option for insurance (term insurance only!) due to their somewhat more liberal payout policies. (Watch the movie "The Incredibles" to understand what I mean!) But private insurance companies are cheaper, and due to strong regulatory practices, there isn't much of a risk of a private insurer going bankrupt.
The problem with ULIP is that you are forced to invest money year-after-year in the same bucket of funds no matter how they perform and the insurance cover is often poor for the money you pay. And you don't have the choice of NOT investing in a particular year if you have some other big-ticket expenses to take care of. Getting out is difficult too. Having said that, there's some evidence that you could come out a winner if you stay invested over a long term, but that'll need expertise and strong will that most of us don't have. And then, you can do as well - or better - in a simple stock index fund without the accompanying worries and risks! And you can invest as much or as little and in whatever fund you choose. You can take out money too if you think the market's gonna crash! So no ULIP!!! ULIP's are good only for the insurance company and the agent. The agent makes a fat commission in the first few years on a ULIP policy. He makes very little on a term policy. So you know where his/her interests lie
LIC should not be an avenue for any investments.
it is an insurance company.
for investing in MF, a demat account is not absolutely necessary.
so, from the options listed below, you are left with PPF and MF.
PPF: has a lock-in period of 15 years. it is best to open a PPF account now and start depositing small amounts every year, and increase your deposit amount as you move closer to the 15-year endpoint.
the returns are completely tax-free.
MF: other than ELSS(lock-in period of 3 years), every other equity Mutual funds can be redeemed anytime.
returns are linked to market conditions.
choose a MF product which has a reasonably good longterm track record and invest systematically (SIP)
Keep insurance and investment separate!! Buying a term insurance allows you to do this ,Insurance is an EXPENSE, not an INVESTMENT! You DON'T WANT to get any returns out of insurance
Beyond that, LIC is a reasonable option for insurance (term insurance only!) due to their somewhat more liberal payout policies. (Watch the movie "The Incredibles" to understand what I mean!) But private insurance companies are cheaper, and due to strong regulatory practices, there isn't much of a risk of a private insurer going bankrupt.
The problem with ULIP is that you are forced to invest money year-after-year in the same bucket of funds no matter how they perform and the insurance cover is often poor for the money you pay. And you don't have the choice of NOT investing in a particular year if you have some other big-ticket expenses to take care of. Getting out is difficult too. Having said that, there's some evidence that you could come out a winner if you stay invested over a long term, but that'll need expertise and strong will that most of us don't have. And then, you can do as well - or better - in a simple stock index fund without the accompanying worries and risks! And you can invest as much or as little and in whatever fund you choose. You can take out money too if you think the market's gonna crash! So no ULIP!!! ULIP's are good only for the insurance company and the agent. The agent makes a fat commission in the first few years on a ULIP policy. He makes very little on a term policy. So you know where his/her interests lie
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