Why ULIP mis-selling has become rampant ?
Why is there so much mis-selling of ULIP? How to avoid this mis-selling? Who should take ULIP?
If you are retiring after decades of service, the retirement funds that you get after years of backbreaking labour are supposed to take care of your expenses for the rest of your life. Therefore, safety of funds is of paramount importance that one often tends to overlook.
To ensure that one does not take unnecessary risk with retirement funds, prominent Kolkata-based investment adviser Amitabha Guha Sarkar has listed out nine cardinal principles that one should not attempt with the funds that one gets after a life of service to an organisation. These are:
1. Don’t invest in risky, unknown and doubtful schemes however attractive they may look.
Numerous people have fallen for this trap and lost hard earned money, often a lifetime of savings. The ponzi schemes and plantation companies are some of the high-profile examples that have ruined the lives of lakhs.
2. Don’t invest in a business you have never handled or are not fully conversant with.
Friends, relatives or acquaintances would lure you with the promise of high returns, but every business has unforeseen elements of uncertainty might catch you by surprise after you invest your money.
3. Don’t spend all your income. Even if the amount is small, save regularly as you used to do during your years in service. Saving regularly will help you to take care of your incremental needs as you advance in age.
4. Don’t plan solely on your investment agent’s advice.
5. Don’t invest in a scheme based on verbal guarantees or unofficial promises.
6. Don’t close your PPF account if you have one. Save in this account to save tax even after retirement and continue to earn tax free interest. This is one of the best guaranteed-return instruments that is totally tax-free.
7. Don’t put all your money in a single scheme. Keep a mix of liquid and illiquid instruments.
8. Don’t keep a large balance in your savings bank account. It will keep your money idle as the rate of interest is very low.
9. Don’t share any password, PIN or OTP with anyone.