ASK OUR PLANNER

Choose your Investments Wisely!

yourself and by what amount.

If yes, you may go ahead with

the ULIP of your choice to keep

things convenient and simple.

Having said that, if you need a

higher life cover, then taking a

term plan separately would

make sense, as in a ULIP, most

of your premium will be

diverted to mortality charges

and lesser amount would go

into investment. If you do not

require insurance cover, it is

recommended that choose

mutual funds as your

investment vehicle.

Since you plan to invest in

equity oriented mutual fund, it

is prudent that you stagger your

purchases over a period of

time, say 9-12 months, for

various reasons: avoid

investing at peak value;

average out your purchase

price; take advantage of short-

term volatility associated with

Equity. Starting a SIP will help

you achieve the same.

Alternatively, you can park

entire amount in a debt oriented

category of mutual fund –

Liquid or Ultra-Short Duration –

Q. I have an idle cash of Rs. 2, 00,

0 00 left with me. There is no

present goal that I have in mind. I

have thought of 2 investment route

but a little confused where to park

this money? Either in HDFC equity

mutual fund or ICICI Prudential Life

time classic ULIP plan?

a. If I choose MF as investment I

want to know that putting it as lump

sum would give me more profits or

giving part of that 2,00,000 every

month in name of SIP would give

me better returns?

b. For the ULIP plan going a one-

time investment of 2, 00,000 or

paying monthly premiums would be

better? Please elaborate and

suggest for better option.

• Patrick Perera

A. While Mutual Funds act as

pure investment vehicles,

ULIPs offer you insurance

cover as well as act as an

investment. Both mutual funds

& ULIPs give you option to

invest either in Equity or Fixed

In c o m e ( D e b t ) o r a

combination of both asset

classes. Evaluate whether you

need life insurance cover

.

.