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Don't Mix Insurance & Investment

For insurance use term insurance plan and invest with mutual funds based on needs

I want to invest Rs 5000 every month. Which type of investment should I choose from ELSS and Whole Life Insurance Policy? I have a long-time horizon of around 15 to 20 years. Please suggest.
-    Rajesh Vickraman

First, it must be clearly understood that insurance and investment are two separate needs of an individual and it is advisable not to mix the two.

For your insurance needs, do not fall prey to mixed insurance-investment products. Rather, carefully choose a term insurance policy for the longest possible period. Term insurance is the most basic, simple and the cheapest form of life insurance. You can spend Rs 1,000 a month on this and invest the remaining Rs 4,000 in ELSS. This will help you in long-term wealth creation as well as serve your insurance needs.

It is advisable to do your SIPs in tax saving funds that have proven track records. You can make your choice from funds like Sundaram BNP Paribas Taxsaver, Magnum Taxgain, Franklin India Taxshield or Canara Robeco Equity Tax Saver.

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