Is mutual funds are safer than insurance?

I think ur qustion releating to mf and ulips, MF are purly investment product ( equity, debts, bonds gold or others) ULIP are investment+ insurance product. There are two type of ulip single and regular, If u choose equity releated fund ulip and mf are risky. , Ulips provides more features than MF( tax benefit u/s-80,10, switching , insurance) Regular ulip attract high allocation charges( 10% to 65%)but single ulip attract low charges , So its better to invest in single ULIPS then u will get all benefit of ulips+mf

Insurance companies are no longer focused on insuring your life, health & assets.
They are more eager to manage your investments. Almost 60% of their new insurance sales are ULIPs. Their profitability depends largely on attracting investments in the garb of life cover.
The most common misconception of retail investors is the belief that insurance is a part of oneâ€™s portfolio.

Objective of ULIPs: Triple benefit: Life Cover, Tax Benefit and Capital Appreciation.
Objective of MFs: Good returns, Various investment choices, Tax benefit in ELSS.

Tenure of ULIPs: Minimum tenure of 5 yrs. Max. term depends on age. 3 yrs. lock-in
Tenure of ULIPs: Open ended- no tenure. Close ended-fixed tenure. ELSS- 3 yrs. lock-in

Investment amounts in ULIPs: Determined by the investor & can be modified as well, but high.
Investment amounts in MFs: Minimum amount is determined by the fund house. As low as Rs.500

Expenses for ULIPs: Agents get very high commission so initial charges are high. Some of them are: Premium Allocation Charge, Risk Cover Charge / Mortality Charge, Policy Administration Charge, Fund Management Charge, Rider Charge. Other charges are:
Switching Charge, Service Tax Charge, Miscellaneous Charge / Alteration Charge.
Expenses for MFs: Upper limits of expenses chargeable have been set by the regulator. Max. 2.5% p.a. Quarterly disclosures are mandatory. Entry load of 2.25% for equity funds.

Transparency of ULIPs: Ambiguous on cost structuring, sum assured, terminal benefits, benefit illustrations, term commitment, policy terms etc.
Transparency of MFs: MFs have a standardized and convenient investment / redemption format and costs. They are very transparent and easy to understand.

Portfolio disclosure of ULIPs: Not mandatory. In spite of IRDA guidelines portfolios are not disclosed.
Portfolio disclosure of MFs: MFs disclose there portfolios on their websites and send monthly fact sheets to investors.

Fund investment risk in ULIPs: All money goes to the fund of the insurance company.
Fund investment risk in MFs: MFs diversify your money.

Direct investment in ULIPs: Not possible. Only through agent.
Direct investment in MFs: Now possible. You can avoid 2.25% entry load.

Redemption of ULIPs: On maturity, surrender of policy after 3 yrs. or on death. Surrender after 3 years is very expensive. Different surrender values.
Redemption of MFs: Highly liquid. MFs have tremendous flexibility. Open ended funds can be redeemed any time. Small exit load. Returns = NAV x Units

Returns on ULIPs: Investment amount reduces due to high expenses. Lower returns.
Returns on MFs: Higher returns than ULIP if invested in equity fund.

Options for returns on ULIPs: Only in the form of capital appreciation or insurance cover.
Options for returns on MFs: Two options: Dividend or Growth.

Modifying asset allocation of ULIPs: Switch overs permitted for free or at a nominal cost.
No option to switch between companies.
Modifying asset allocation of MFs: Entry/exit loads have to be borne by the investor.

Tax benefits on ULIPs: Sec. 80C benefits are available on all ULIPs.
Tax benefits on MFs: Sec. 80C benefits are available only on ELSS funds.

MF are pure Investment Products, while Insurance covers the life of a person.
Insurance is a planned investment fearing the unforeseen future. They turn out to be a good financial back up under un-pleasant events.
Mutual Funds on the other hand, are actively traded investment products. An investor can njoy its benefits by tracking the funds NAV's and performance of MARKET as a whole.
MF's are subject to market risk and hence risky on that note.

Insurance and MF have completely different Investment Principles, and hence should not be compared on the grounds of Safety.

Every safe investment cannot yeild HIGH returns. At the same time, Every high yeilding investment need not be SAFE.

Your best bet right now is Segregated funds. They are similar to Mutual Funds only they have a guarantee in your principal. In volitile times this is probably the safest investment out there that will still allow you the gains of the markets. There are also a lot of other benefits to them like creditor proofing, bypassing probate if you pass away and more.

Mutual funds are totally different from insurance - they have dissimilar objectives. You are trying to compare apples with oranges.

Insurance covers the life of a person while mutual funds are pure investment products. You cannot pull out your money from insurance until and unless the policy expires. However, in mutual funds, you can do so. While insurance is a planned investment which plan to offer secure financial back-up, mutual funds are actively traded investment products whose performance depend on the market performance itself. Mutual funds are subject to market risk. Both are separate forms of investment offering different rates of interest and security. Hence, they cannot be compared as such.

visit:- http://www.paisawaisa.com/

there are safer investment options both in insurance and Mutual funds. But they will not give you high returns. So if you are looking for benefits from the share market by investing in mutual funds and unit linked insurance products of insurance companies you have to take the risk. I think the ulips are better for a pretty long period while for short and mid term investment go for MFs. The switching facility offered by Ulips is helpful to mimimise the risk. beware of the various charges before taking the unit linked insurance.

Dear friend,
Mutual funds and insurance products are different. If u invest in mutual fund u can able to pull out ur money at any point of time but it will not cover ur life.Insurance will give life cover but u cannot comeout from that.But mutual funds needs market study for safe survival.for more details mail me i give simple and little more clarification, regards, prabu

Both are very different, one cannot compare them.

I know a source of your answer.

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