Money For Investment

Okay , now let me tell you that I am here not going to tell you the textbook definition of what insurance is and what the dirrents types of classification of the same based on textbook stuff. You will get that in any random book on the subject. They will tell you tthe various types of insurance policies but they dont tell you which one actually neans what and should you invest it in them , and if yes then what should be your time horizon for the same? They mostly give you textbook knowledge which at the end of the day may not necessarily help you make a better informed decision . Hence I am going to help you understand the broad types of the insurance polices based on their constitution and the purpose they servce. There are broadly only 2 types of life insurance polices ( there are non life insurance policies as well.. more on that later). They are 1. Pure Term Insurance Plan 2. Endowment Plan Now where does this leave the more popular ones like Money Back , ULIPs etc. Let me explain ...

One of the most common mistake that people do these days is to fail to distinguish between need for investment and need for security. More often than not people tend to fail to understand the huge implication it has on their decisions regarding money. This is true for people from all walks of life. I amazed at seeing the lack of awareness about various investment opportunities among educated and savvy people . Hence I am going to point out few of the cardinal mistakes that people do especially while deciding on buying insurance. What is the purpose of buying insurance? By definition an insurance product is meant to protect the policyholder from any uncertain eventualities that may occur in his life and thus it aims at ring fencing the policyholder and his dependents from any financial crisis that the eventuality might bring with itself. But how many of us actually buy it only for the safety sake? Lets see the popular reasons why people buy insurance (ULIPS mostly) in India. 1. The mos...