I am working in an MNC company in Chennai and my monthly income is ₹50,000. I want to invest money in mutual funds and the stock market. I am in 20 per cent tax slab. I can invest ₹1.5 lakh a year. I would like to take medial policy for critical illness to my parents as well my spouse. Also, I would like to by a life cover of ₹1-2 crore. I already have a Jeevan Anand policy.
Could you please suggest a good health insurance and term plan. Also, please suggest some good tax saving funds.
- Basha
Life Insurance: Go for a plain term cover. If you are buying life insurance for ₹1 crore, buy two insurance policies from different insurers. Max Life Online Term Plan, HDFC CLick 2Protect and SBI Life e-Shield are recommended for you. We have selected these policies on basis of their claim settlement ratio of the last three years and premiums.
Jeevan Anand neither provides adequate insurance nor acts as a good investment. For more details visit Costly Life Insurance Policy. It would be better to surrender you policy instead of wasting money in a low yielding policy.
Medical Insurance: For medical insurance, we recommend Apollo Munich Easy Health policy and ICICI Lombard iHealth. You may choose their critical illness plans as well. While selecting a health insurance, you must check that the policy offers lifelong coverage as it becomes tough to buy a new health insurance policy at advanced age. There should be no sub-limits and co-payment clause if you are young. At old age, you might not be able to completely avoid co-payment.
For your parents, as you have not mentioned their ages, if they belong to senior citizen category, you may go for Star Senior Citizen Red Carpet or Apollo Munich Optima Restore policy. While policy from Star covers out patient treatment from ₹600 to ₹1,400, depending on the sum insured. Apollo Munich plan provides automatic restoration of sum insured by 100% upon exhaustion of sum insured in a policy year. Both policies offer lifelong coverage.
Mutual fund for tax saving: Invest in equity linked savings schemes for tax saving purposes. Select one or two well-rated funds. Here is a list of our recommended funds.
ELSS funds have a lock-in period of three years from date of investment. You may go for direct plans if you do not hire services of any wealth adviser. Direct plans have lower expense ratio which passes to investors in form of higher returns.
This article was originally published on October 14, 2015.
Ask Value Research 
New episodes every Friday 
New Process Alert 
Seems like you've uploaded a wrong QR code. Please upload the QR code downloaded from MF Central platform.
