Loan against insurance, minding mental health: Top personal finance stories

Our top stories this week tell you about the pros and cons of using your life policy as collateral and what it takes to be mentally fit

According to the latest guidelines from the Insurance Regulatory and Development Authority of India, the value of policies surrendered within the first three years of purchase may decrease. However, policies surrendered between the fourth and the seventh year may see slightly higher values. Experts advise policyholders to consider taking loans against their policies rather than surrendering them. In this week’s lead story, Bindisha Sarang explores the mechanics, advantages and drawbacks of such loans.

The second article, by Namrata Kohli, underscores the need to be aware of mental health issues and take concrete steps when problems arise. It discusses the benefits of various treatment methods, including therapy, medication, and lifestyle changes, and stresses the value of early professional intervention.

If you have an investment horizon of four to seven years, and do not wish to invest in equities, you could go for a medium- to long-duration debt fund. Look up Morningstar’s review of Bandhan Bond Fund-Income Plan.

Conservative investors seeking returns that surpass those of traditional bank fixed deposits should explore corporate fixed deposits. To ensure their investments match their risk tolerance, consult the ratings of these deposits. Look up the table from Paisabazaar for insights into the returns across different tenures and the credit ratings of these instruments.

Number of the week

Rs 69,200 for 10 gm: New peak touched by gold on Wednesday

The price of gold touched a new high of Rs 69,200 per 10 grams, fuelled by a rally in precious metals in the global markets. Spot gold is trading at around $2,275 per ounce on the Comex. One reason for the growing demand for gold is tensions in West Asia. Uncertainty over the timing of rate cuts by the US Federal Reserve after stronger-than-expected economic readings is another factor. Signals emanating from the Fed will determine the yellow metal’s trajectory.

The high price of gold is keeping customers away. Imports fell from 100 tonnes in February to 25 tonnes in March.

Weddings and Akshaya Tritiya in May, however, keep jewellers optimistic. Demand for jewellery has been gradually shifting to coins and bars. Additionally, sovereign gold bonds and gold exchange traded funds have emerged as alternatives for those keen to invest in gold (and not use it as jewellery).

Gold funds have given investors a return of 15 per cent over the past year and a compounded annual return of 8.2 per cent over the past 10 years.

QUOTE

"Remember kids, I have life insurance." Adam Savage