Thread by @akii221b

People who are advising regarding insurance needs to take term plan and invest the rest in mutual funds via SIP should also make it clear that,
1. Choice of fund is extremely important.
2. There are chances that fund house may restrict redemption if markets are in risky position

3. In case if your redemption time coincidences with sharp market movements, then seeing your wealth eroding in front of you even after religiously doing SIP's for years is a very difficult task to digest.

4. Liquidity factor of Mutual Funds work in both ways, no doubt you can withdraw early if your investment goal reaches early BUT the same liquidity solution can hamper your portfolio growth if in case one takes out substantial amount from it thinking it will reinvest afterwards &

& that afterwards never comes.

5. If you are investing for your golden years ,at the end of it, if some novel case like "#YesBank" arises & the mutual fund house decides to side pocket some units.
How long will you be able to track or wait for it ??

6.For middle class person, A bit of WholeLife or Endowment plans of is required over and above term plan because once you pass your earning age,you need to be sure that you will get a predetermined amount instead of worrying for whole these years about what the SIP value will be.

7. Any "Advisor" should also consider that investment mindset differs zfrom person to person. Its not taught in school because it is mainly learned in household while growing up.
This mindset is a result of habits formed during years of living in it.

8. The advise can't be same for a person whose parents could be government employee or a business man or a retired army person.
Each person have lived his early years of life seeing different life scenarios.

So, a pre-set formula never works out for every individual.

9. The main job of "Advisor" is not to advise BUT TO GUIDE the individual.
To understand his needs and not just enforce any pre-set "age" related formula.
Moreover, never try to sell the product which doesn't fulfills his need, you may get more commission from company but you are

But you are ruining an individual or sometimes even a whole family from its financial freedom.
Years lost of investing in a non-required policy can affect a whole generation of the family, so dear "Advisors" never miss sell any policy just to achieve targets or commission.

10. Final conclusion from my point of view is every individual needs term insurance but along with it, only SIP's won't help.
Instead of only term + SIP combination, it should be Term + SIP(55%) + Endowment/WholeLife Policy(35%)+ PPF(10%).
But it depends on each individual.

The ratio can be different but the combination could be the same apart from any Gold/Stocks/Real Estates investments.

A.Term Plan during earning years is extremely important.

B. SIP's greatly helps in beating inflation but one has to be patient to see negative value for years.

Along with the ability to redeem the funds in a Bull Market or else a 40-50% drop can ruin mental health at old age.

C. ENDOWMENT/WHOLE LIFE insurance plans helps to plan "Guaranteed" cashflow, it completely depends on one's choice of what type of CASHFLOW it needs in old age.

D. PPF doesn't help in beating inflation but can be very helpful in Tax planning during and after earning years.
A well planned PPF and endowment insurance policy can help an individual to not redeem its mutual funds UNITS under any compulsive pressure during Bear Markets.

The views expressed are completely my point of view and it differs from individual to individual.

The Main thing to understand for an individual is ONE's ACTUAL NEED and TIME HORIZON,then only any Advisor can guide him/her in achieving the goal or setting realistic targets.🙏🏽🙂