I am 28 years and reside in Bengaluru. I am new to equity and want to invest in equity mutual funds through SIP. My friend has advised me to invest in a fund house which provides SIP-cum-insurance products. What are these products? Should I invest only in a fund house which offers this product?
A few fund houses are known to offer systematic investment plans (SIP’s), which offer the benefit of insurance protection. You get insurance under SIP-cum-insurance plans which is 100 times your monthly SIP. The maximum amount of insurance cover you get is INR 20 Lakhs. You get less cover during the initial years of the SIPs. You don’t have to pay any additional amount for this insurance. You can take up SIPs which offer insurance protection but do take a look at these points. Insurance coverage is valid only for the time the SIP runs and stops when SIP stops. If you skip a payment for more than a month, you could lose insurance coverage. Check the fine print before taking up the plan.