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Being well informed puts you in a stronger position to plan for life's uncertainties.
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You're making informed choices!
Being well informed puts you in a stronger position to plan for life's uncertainties.
Here's how you performed
You've got the basics covered!
With a bit more learning, you can make even smarter insurance decisions.
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Insurance can feel complex
But learning a little today can make a big difference tomorrow.
Even though Shyam invested ₹18 lakh MORE than Ram, his retirement corpus is significantly smaller!
Due to Ram's longer investment period, the power of compounding worked in his favor. He ended up with a retirement corpus that is almost ₹1 crore larger than Shyam's, despite investing significantly less!
It is recommended to invest in a mix of different asset classes like government schemes (like PPF) and market-linked investment products (like mutual funds) to get good returns. However, keep in mind your financial goals, risk appetite, and investment tenure before you begin. For long-term goals, consider investing in ULIPs, 5-year fixed deposits (FDs).
For short-term goals, 1 to 3-year FDs, liquid funds, corporate FDs, etc are good. In contrast, if you are planning your retirement goals, you have options like NPS, pension plans, voluntary provident fund (VPF), etc.
To earn higher returns, you need to invest in instruments with higher risk levels, such as market-linked plans, stocks, and equities. These investment instruments generally require investment for a long term. Here is a list of high-risk investment options that offer higher returns over the long term:
Irrespective of the amount you wish to invest, it is prudent to assess your risk appetite along with your investment tenure. If you do not want to take a risk, consider investment options like a post office FD or a bank fixed deposit. You can earn an attractive rate of return based on the investment tenure you select.
You can also invest in liquid mutual funds of your choice if you are willing to take additional risk.
To earn a monthly income from your investment of 20 lakhs, you can consider investment in a mix of safe and market-linked instruments. Before you begin, assess your risk appetite, financial goals, and amount per instrument.
Some low-risk, secured investment instruments are fixed deposits, post office monthly income scheme, and senior citizen savings scheme, etc. High-risk, high-returns investment options include unit-linked insurance plans, stocks, and real estate investments, etc.
The choice of investment would depend on multiple factors, including your age, risk appetite, and expected income from the investment. Some options include
However, it is advisable not to invest your corpus in any one instrument.
Scenario 1: Let us calculate the interest amount using both simple interest and compound interest formulas below:
| Calculating Simple Interest | Calculating Compound Interest |
|---|---|
| Sl = (P*R*T)/100 Sl = (30000*10*3)/100 SI = 9000 |
A = P (1 + R/100)T A = 3000 (1 + 10/100)3 A = 39930 CI = 39930 - 30000 = 9930 |
As per the calculations shown above, the man can earn Rs. 9000 and Rs. 9930 as simple interest and compound interest after 3 years, respectively. Hence, the man earns Rs. 930 less in an investment instrument that gives simple interest.
A 1-year fixed deposit generally offers guaranteed 6 to 7 percent interest, which is clearly higher than what traditional savings bank accounts offer (2 to 3 percent). However, short-term investments like stocks and debt mutual funds involve high risk but certainly offer higher returns than bank FDs.
Market-linked investments such as equities have the potential of providing you with returns of 15% or higher. However, returns are not guaranteed and a substantial risk is associated with the returns
Experts consider an investment period exceeding 5 years a long-term investment. However, the longer the investment period, the better from returns’ point of view.
For such an individual, the best tax-free investment for the long term is public provide fund (PPF). While there is a lock-in period of 15 years, PPF offers assured returns, and the government of India backs this scheme. The investment contributions, interest earned, and annual returns are tax-free.
Based on your risk appetite, you can invest in guaranteed return instruments like Bank FDs. If you wish to invest this amount on a monthly basis, go for mutual funds via SIP.
Here are the common mistakes which you need to be mindful of. Make sure to avoid them:

If missed/delayed payments start piling up, then it will severely lower your credit score. So, pay your EMIs or credit card bills on time.
Moreover, lenders might feel that you’ll use up the credit of all the cards even if you don’t use all of the available credit. It’s one of the common mistakes that impact credit scores. So, it’s best to avoid it.
Otherwise, it will hurt your overall credit report and decrease your credit score.
When someone has multiple unsecured loans, it indicates he/she might be financially overburdened with debt. Furthermore, it denotes such persons as risky candidates. Lastly, always remember that if you have numerous active unsecured loans, it’ll have a major negative impact on your credit score.
Apart from lowering your credit score, there’s another side effect. It cuts down on your negotiating options with the lender. As a result, you might receive credit, but on unfavourable terms and conditions.
Late payments might remain recorded in the credit report for many years. You will face questions regarding late bill payments if you apply for loans. You can set payment reminders or set up the auto-pay option to avoid late payments.
You should try your best not to let the credit utilisation rate rise above 30%. Otherwise, your credit score can come down greatly. So, what can you consider? Try to pay off your credit card dues in time. Use other payment methods until you’ve cleared your credit card dues.
Moreover, if you track your credit report regularly, then you’ll also come to know when your credit score is on the fall and take steps to rectify the situation.
Building a good credit record can be time-consuming. So, develop good financial habits early on and consciously avoid making the 10 common mistakes that can decrease your credit score. It will be easy for you to build creditworthiness.
A term insurance plan provides a large life cover at an affordable premium. If the policyholder passes away during the policy term, the nominee receives the full sum assured as a death benefit.
Term insurance
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The sum assured in a term plan is typically recommended to be 10–15 times your annual income to ensure your family can maintain their standard of living and meet long-term financial obligations.
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Term insurance premiums are determined by the policyholder's age, health, lifestyle habits, sum assured, and policy term. Buying at a younger age locks in lower premiums for the entire duration.





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Read MoreReal questions and top answers from Reddit communities - unfiltered opinions from actual policyholders and financial planners.
Term Insurance: ₹3 Cr till 75 vs ₹4 Cr till 65 - Which plan makes more sense for a 31M with future home loan & family plans?
"Male, 31, unmarried (likely to marry in the next 1–3 years), planning to have kids later and probably take a home loan in the next 3–5 years."
Is term insurance required if my wife and I both are working?
"I understand that the point of taking term insurance is that the family can lead a good life even in the absence of the bread earner."
NRI: Is it wise to buy term insurance in India?
"I am 30 years old NRI and I'm currently living and working abroad. Some companies are selling something called ‘NRI Term Insurance’"
These are independent user opinions from Reddit and do not represent the views of Axis Max Life Insurance. Clicking a card opens the original discussion on Reddit.
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