Dear Sreekanth,
Couple of months ago my dad passed away and my mom has received 6 lakhs from various insurance claims. She is 55 years old. Unfortunately there is no other investment or life insurance policies in her name till now.
Considering term plans are very expensive at this stage, I am thinking of investing 3 lakhs per year in a ULIP plan. One of our family friend is suggesting to go for SBI MAX wealth Builder ULIP. This plan has a death benefit of 7 times the annual premium. I can manage to pay 3 lakhs every year from my end from next year for next 5 years. Do you think it's good to invest in such a ULIP? I can see that premium allocation is at 9% for first year and 6.5% for next 4 years. Is there any other ULIP that i can go for?
If not ULIP, what other investment can I go for her?
2 Answers
Hi,
Kindly understand the fact that if she really needs to have a term plan??
If she does not have dependents, is a non-earning person and do not have liabilities, then I believe that there is no need to invest in any kind of life insurance policy in her name.
May I know, is she dependent on you financially? Does she has any source of income?
What are the investment objectives for this lump sum investment and are you looking at regular income being generated from this investment? What is the expected time-frame?
She is going to receive 10k per month as pension from state govt. There are no financial liabilities, she has a own house to live. I live in the US and she will be visiting us for 6 months going forward. Yes, I take care of any financial decisions related to her.
I have a sister who is married and my mom wants to accumulate a good amount and due to my sister’s financial situation we want to give to her in future, since she never accepts anything from me. Timeframe is around 10 to 15 years.
Should we be investing in MF instead of ULIP? I have opened a zerodha trading account too recently in my moms name for investment purpose.
Hi,
Yes, you may ignore investing in life insurance products for investment purposes in your mother's name.
Instead, as suggested you may pick a decent Balanced fund and one large-cap/diversified equity fund and stay invested for long-term, as wealth accumulation is the investment objective..
You may set-up STPs (systematic transfer plans) instead of investing lump sum amount in one-shot.
You may first pick 2-3 liquid funds and then from them STP to equity oriented schemes.
For ex : HDFC liquid fund to HDFC Balanced fund.
Kindly read :
https://www.relakhs.com/debt-funds-types-benefits-risk-vs-return/
https://www.relakhs.com/best-balanced-mutual-fund-schemes-review/
https://www.relakhs.com/best-mutual-fund-schemes-2017/
https://www.relakhs.com/best-mutual-fund-scheme-risk-ratios/
https://www.relakhs.com/list-of-best-investment-options-schemes-in-india/
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