Monday, August 06, 2007

Insurance vs Investment

I am gonna delve into a topic I know very little about(not that I only write about what I know. :-)), money. I have been a speculator during my last few years of investment in the equity or secondary markets and only recently have started paying a little more attention towards valid reasoning before investing. So, with this as a backdrop, please take everything I write on this topic with a pinch of salt. :-)

I have been wanting to take a good life insurance cover for a couple of years now. In the process of deciding which one to go with, I was talking to friends and family and I was in for some informative surprises. ULIPs (Unit Linked Insurance Plan) have been very popular off late because they provide you with insurance cover and also invest in the hot Indian equity market. Seems like the best of both worlds? Not quite! A couple of friends at office, nsd and patel, gave me some gyan on this and after some reading of my own am convinced that ULIPs are the worst of both worlds. They don't give you inadequate life cover and they also perform worse than many mutual funds in terms of returns.

Follow this link (thanks to patel) for those interested in understanding this better.


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Dragonfly said...

Seems like we both agree in this topic.. :)