When investing towards long-term goals such as retirement, your final returns are decided more by your asset allocation than by your choice of products or fund managers. That’s why one of the most important decisions you’ll make on your NPS account is this one – in what proportion you’ll divide your annual contributions between equities, bonds and the rest.
SEBI’s new circular dictating a minimum mid-cap and small-cap stock allocation has left investors in multicap funds scratching their heads. But there’s another set of investors who are thrilled with this move. These are the folks who are already invested in smallcap stocks in their direct equity portfolios or owning smallcap equity funds.
The Monetary Policy Committee (MPC) in its latest meeting has sent out mixed signals about the future direction of interest rates. Citing an uncertain inflation outlook, it called a pause to its repo rate cuts, holding the rate at 4 per cent. At the same time, it also promised to continue its ‘accommodative stance’ due to unprecedented Covid stress on the economy.
In our PrimeTime webinar on ‘Choosing the Right Term Insurance’ last Saturday, we received many thought-provoking questions from our subscribers and viewers that we could only partly address, given the paucity of time. Here’s a more detailed FAQ on term insurance based on your feedback during the webinar. Hope you find it useful!
With interest rates on bank deposits, small savings schemes and most categories of debt funds taking a knock, many investors are on the lookout for that one miracle avenue that will give them high returns with capital safety. Gilt mutual funds, which invest only in government bonds, on the face of it, look very appealing today because of their high past returns.
Apart from allowing you to structure your term insurance plan in different ways through options, life insurers also tempt you with another set of add-ons – riders. Riders allow you to cover additional risks to your income, for an extra premium added to your base term plan.
Pure term plans from life insurers are, at their core, very simple products. You pay regular premiums to the insurer during your working years. The insurer promises to pay your beneficiaries a lumpsum in the event of your untimely death. This may lead you to believe that buying a term insurance policy is a cakewalk.
Most Indians harbour the notion that they cannot do without life insurance. One of the first ‘investment’ products that young Indians are encouraged to buy, on landing a job, is an insurance policy. But this is based on a flawed understanding of life insurance as a product. Life insurance isn’t designed to enrich someone on your death. Its primary purpose is to compensate your dependants for the loss of your income in the event of your untimely death. So yes, there are many categories of folks who simply don’t need to buy life insurance. Here are the main ones.
When buying life insurance, most good advisors recommend that you go in for a pure term plan. A pure term plan is an insurance policy that offers life cover (with no investment component, bells or whistles – we’ll tell you why you don’t need those in a later article) for a specific ‘term’ or period of your life.