I want you to discuss the pros and cons of insurance-linked funds and tell me whether they are the right investment for a small salaried investor.
- Jyotimor Sarkar
There are a lot of mutual funds that offer insurance for free, if you commit to continue your SIPs in the fund for a long-term period. This term cover that you get can be quite meaningful. Since the fund company buys it as a group cover, it is cheap as well. But for the investor, it comes without any additional cost. Furthermore, such a benefit enforces disciplined investing in the mutual fund. Hence, we believe investors should go for such insurance-linked funds, provided the fund itself is doing well. However, treat this term cover as an additional benefit, not as the standalone solution to your insurance needs.
This article was originally published on September 12, 2012.
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