I have a HDFC SL Youngstar Super Policy since 2010 and I have been paying Rs 25000 annually. Is it okay to continue or can you suggest a better option? Please suggest few names.
Ans: Deciding whether to continue with your current HDFC SL Youngstar Super Policy or to switch to a different option depends on several factors, including your financial goals, the policy's performance, and the benefits it provides. Here are a few steps you can take to make an informed decision:
1. Evaluate Your Current Policy:
• Performance: Review the policy’s performance since 2010. How has it grown? Is it meeting your expectations in terms of returns?
• Benefits: What are the key benefits of the HDFC SL Youngstar Super Policy? Does it provide life insurance, investment benefits, and other features you need?
• Charges and Fees: Understand the charges associated with the policy (e.g., premium allocation charges, policy administration charges, fund management charges).
2. Compare with Other Options:
Consider comparing your current policy with other financial products that can offer similar or better benefits. Here are a few alternatives:
Term Insurance + Mutual Funds:
• Term Insurance: Provides pure risk cover without any investment component. It's usually cheaper than ULIPs (Unit Linked Insurance Plans).
• Examples: HDFC Click 2 Protect, ICICI Prudential iProtect Smart, Max Life Online Term Plan Plus.
• Mutual Funds: For investment purposes, consider investing in mutual funds for potentially higher returns.
• Examples: Axis Bluechip Fund, Mirae Asset Large Cap Fund, SBI Small Cap Fund, HDFC Hybrid Equity Fund.
Public Provident Fund (PPF):
• A long-term investment option with tax benefits and guaranteed returns. It's a good option for risk-averse investors.
National Pension System (NPS):
• A government-backed retirement savings scheme with tax benefits and market-linked returns. Suitable for long-term retirement planning.
Equity Linked Savings Scheme (ELSS):
• Mutual funds that offer tax benefits under Section 80C and have the potential for high returns.
• Examples: Axis Long Term Equity Fund, Mirae Asset Tax Saver Fund, Aditya Birla Sun Life Tax Relief 96.
3. Assess Your Risk Appetite and Goals:
• Risk Tolerance: Are you comfortable with market-linked products (mutual funds, ULIPs) or do you prefer guaranteed returns (PPF, fixed deposits)?
• Financial Goals: What are your financial goals (e.g., child’s education, retirement)? Choose products that align with these goals.
4. Consult a Financial Advisor:
It’s always a good idea to consult with a financial advisor who can provide personalised advice based on your entire financial situation.
Summary:
• If your HDFC SL Youngstar Super Policy has not performed well or if the charges are high, consider alternatives like term insurance combined with mutual funds for better returns and flexibility.
• For risk-averse investors, PPF or NPS might be suitable options.
• Always align your investments with your financial goals and risk tolerance.
• Carefully assess these factors before making a decision. If needed, get professional advice to ensure your financial plans are on the right track.
