If you want a huge sum of money to be left behind for your loved ones without any frills,then the best bet is a term plan. Term plan can provide you the highest sum assured with the lowest premium charged and is very simple to understand. You need to remember there is no provision to increase the premium with the increase in income and you get nothing if you outlive the term. ULIP is a product that combines insurance and investment. ULIPs are similar to mutual funds except that they provide life cover and works best only if it remains invested for a long term like 10-15 yrs. Here,there are returns to be gained when the policy matures.

You should take a call based on your personal circumstances.

What is the advantage of a child plan compared to a general cover?

Ankur,Delhi

Child insurance provides cover for parent for a specified term. That is,if the parent,were to pass away,the childs future is not in jeopardy. If,however,this were to happen,the child would receive the sum assured in the policy along with any bonus or participating profit or guaranteed addition or the value of the investments,at a pre-determined age. This is the significant advantage of a child policy over a genera.

I have accumulated several credit cards over the years,how do I decide,which to close?

Manisha,Chandigarh

Your credit-debit ratio forms the basis of your credit score. Even if you do not use your credit cards,dont rush to close them quickly,do so over a period of time. This effectively means the credit limit available on your card will have a relevant impact on this ratio. Try closing the cards with the least credit limit and retain the cards with the highest limits.

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I travel 50 kms every day. I have one lakh for downpayment. Should I buy a car?

Saleem,Delhi

The lesser the loan amount,lesser the EMI,leaving you more money in your monthly budget for

amply meeting the fuel costs for the long travel within the city on an everyday basis. Apart from the basic consideration,you need to account for fuel cost and maintenance cost. For example,a diesel variant can cut fuel cost by nearly half,but will be a more expensive buy.

The expert is CEO,

Bank Bazaar

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