Mutual Funds for Financial Planning
Mutual Fund
Mutual fund is a collective investment vehicle where resources of number of unit holders are pooled and invested as per the objectives disclosed in the offer document. A mutual fund is set up as a trust which supervises the function of Asset Management Company (AMC) which manages the investments collected in the mutual fund schemes.
Its advantages are
Professional Mnagement
Regulated Operation
Higher returns
Transparency
Liquidity
Tax benefits
Flexibility
Life Insurance for Proection
Life insurance works on the principle of pooling of losses and the law of large numbers.
Principles for buying
While buying life insurance, a family should select policies according to its particular financial needs,especially those that are not met in other ways.
The family should be able to pay for the insurance, because premiums must be paid to keep the insurance in force.
The family insurance program should be reviewed and revised periodically to meet the changing needs
Health Insurance for Contingencies
Health Insurance
It provides cover against sudden illness or accidents that one may encounter
Adequate coverage can prevent sudden cash outflow and can sometimes help by providing capital for immediate surgeries
Medical expenses include Hospitalization, Surgery, Medicines, Diagnostic
There are different components of planning that an individual comes across during one’s life. Planning can be for areaslike education, marriage, insurance