Funds that offer insurance cover for free can be quite meaningful. Find out more…
12-Sep-2012 •Research Desk
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.