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What are hybrid mutual funds and how are they taxed? Every investor is different. There are some who like taking risks and enjoy the potential of high returns. On the other hand, there are some who are very conservative in terms of taking risks. They don’t mind the low returns as long as they are assured of capital security. Then there are those who are in the middle of the risk spectrum. They are not too aggressive neither too conservative. They look for moderate risks with moderate returns. To suit the investment preference of these different types of investors, mutual funds come in different variants. One such variant is the hybrid mutual fund which is suitable for moderate investors who lie in the middle of the risk spectrum. Let’s understand the concept of hybrid mutual funds and their tax implications – What are hybrid mutual funds? Hybrid funds are mutual funds which invest in both equity as well as debt instruments. The return potential of equity investment is adde...

Group v/s individual maternity health plans- what you should know Maternity coverage is an essential coverage that one seeks in a health insurance plan. This can cover a wide range of medical expenses related to pregnancy such as pre-natal check-ups, hospitalization expenses during delivery and post-natal care and expenses of newborn baby etc. In most of the group health insurance plans offered by the employer, maternity coverage is automatically included. Maternity cover is also offered as an add-on rider to individual health plans by many insurance providers to give financial backup during the crucial phase of pregnancy. Let’s take a look at both the plans to understand what should be chosen to have a wider range of coverage. What is a group health plan with maternity cover? Group health insurance is a health plan that particularly covers a group of people like employees of an organization or of a society. Basically, it is the  health insurance plan  offered by th...

When your clients look for investment returns and insurance coverage, the first product which comes to your mind is a Unit Linked Insurance plan (ULIP). A ULIP is an insurance plan which provides a unique combination of market-linked returns as well as life insurance coverage. Moreover, the new age ULIPs which are now available in the market promise additional benefits, both in terms of coverage as well as benefits offered. Modern-day ULIPs have, in fact, undergone a sea of change compared to traditional ULIPs which were available about a decade or more back. Some of the notable changes include the following – The charges under new age ULIPs have reduced drastically. While, earlier, the premium allocation charge and other charges associated with the policy rode up to 40% or more, current ULIPs have charges lower than 5%. With the reduced charges the revamped ULIPs offer higher allocated premiums which, in turn, provide better returns to customers The coverage tenure under many ...

Insurance taken out to cover the cost of medical care. Health insurance is an agreement whereby insurance company agrees to undertake a guarantee of compensation for medical expenses in case the insured falls ill or meets with an accident which leads to hospitalization of the insured.Health insurance can reimburse the insured for expenses incurred from illness or injury, or pay the care provider directly.Generally, insurance companies have tie-ups with the leading hospitals so as to provide cashless treatment to the insured. In case the insurance company has no tie-ups with the hospital, they reimburse the cost of expenses incurred by the insured. The government also promotes health insurance by providing a deduction from income tax. Importance of Health Insurance Buying a health insurance policy for yourself and your family is important because medical care is expensive, especially in the private sector. Hospitalisation can burn a hole in your pocket and derail your finances. I...

You dream of a secured financial future but cannot commit a large sum of money, SIP or Systematic Investment Plan is an answer.   As the name suggests, Systematic Investment Plan is a smart and planned investment approach wherein you invest a small pre-fixed amount at regular intervals into specific mutual fund/funds. What should you do start Systematic Investment Plan? First you need to choose the fund in line with your investment objective. The available mutual fund schemes can be broadly divided into equity funds, debt funds, gold funds, and hybrid funds. You can choose any depending on your investment horizon and risk profile. If you are looking for higher returns, you can invest in equity funds while if the safety of investment is your prime objective, then debt funds can be your choice as they invest in a range of low-risk securities such as government bonds, corporate deposits, commercial papers, treasury bills, etc. How does Systematic Investment Plan work? It’s q...

While mutual funds remain the best saving instrument, insurance ensures financial security at the time of crisis. When mutual funds come with the added insurance cover, it sounds like an icing on the cake. Let’s get into the details of mutual funds with insurance benefits and find out if it’s a wise choice or not! What are mutual funds with insurance cover? There are some mutual fund companies including Birla Sun Life Mutual Fund, Reliance Capital Asset Management Company and ICICI Prudential Mutual Fund, that provide a complimentary life insurance cover to their SIP investors investing in certain schemes. The cover provided is a term insurance policy, where the insurance company pays out money only in case of death of the investor. Is there a minimum period of investment in mutual funds with investment cover? Yes, if the investor stays invested for at least three years, only then he is eligible for insurance. What if the investor exits the fund before 3 years? The co...

How much should I invest? Identify your goals first; this will help you decide the amount you need to invest to achieve each goal. Should I invest in equity or debt schemes? It primarily depends on your investment objective, investment horizon and risk profile. If you are investing to achieve a short-term goal that needs to be achieved in a couple of years, debt schemes are ideal for you as these schemes are mostly risk proof.   However, if you have a long-term financial goal that needs to be met after five years or so, you can invest in equity mutual fund schemes as these have the potential to offer superior returns than other asset classes. What is the minimum amount required to start investing in mutual funds? It’s important to start investing and the beauty of mutual funds is that you can start with as low as Rs 100 per month. The mantra is to “start and stay invested for long term”. If I start with Rs 100 per month, can I keep adding as my income increases? Ye...