20/03/2022
Anonymous Question:
Hello, need advice on HDFC life fixed maturity plan.
If i pay rs1.2 lac per year for 14 years in 18th year I get a guaranteed sum of 28.21 lacs. Is it a good plan to invest??
ConfidantAdv Answer: Simple answer No.
1. It is always advised that investment and insurance should be kept separately because the purpose of investment is to grow or maintain wealth, whereas in the case of insurance it is to reduce a risk that happens rarely but can be devastating.
2. Against insurance policy, a Fixed Deposit is more liquid (easily accessible) and safe with a large bank.
So if you save ₹ 1,20,000.00 every year (monthly investment of ₹10K)
For a Period of 14 (yrs)
in a Recurring Deposit which is giving the rate of 5.4%
Then the amount after 14 yrs will be ₹ 24,18,184.41
Now if you do a fixed deposit of this amount for 4 years
at the rate of 5.0%
Then you will get a total of ₹ 29,39,318. This is better than the insurance amount.
Now if everything remains the same and we just change the rate of returns to 10% and keep the flow in the same way (investing for 14 years and then leaving the investment for 4 years) then this amount becomes ₹ 49 lakh.
This is what you can expect if you choose a good mutual fund.
