Can Investing 1800 INR Monthly in eTouch Life Goal Help Me Secure My Future?

Ans: Understanding Your Investment Choice
eTouch Life Goal is an investment-cum-insurance product. These products typically combine life insurance with market-linked returns. The idea is to provide both protection and growth in a single package.

Investing Rs. 1,800 per month in such a product requires careful consideration. You need to ensure it aligns with your long-term financial goals.

These plans often have higher fees and charges compared to pure investments or pure insurance products. The returns might not be as high as investing directly in mutual funds or stocks.

Evaluating the Product’s Suitability
Consider if this investment suits your risk tolerance and financial goals. If your primary goal is wealth creation, other options might offer better returns.

The life insurance component might provide a sense of security. But, it may not be enough to cover your actual insurance needs.

Compare the benefits with alternative strategies like separate term insurance and mutual fund investments. This approach can often give you better coverage and higher returns.

Cost Structure and Returns
Products like eTouch Life Goal often have high costs. These include policy administration fees, fund management charges, and mortality charges.

These charges can reduce the actual returns you receive. Over time, this could mean that your investment grows slower than if you had invested directly in mutual funds.

It’s important to read the product brochure carefully. Understand all the charges involved before making a decision.

Alternative Approaches
Pure Term Insurance: This offers higher coverage at a lower cost compared to the insurance component in eTouch Life Goal. The premiums are affordable, and you get substantial life cover.

Mutual Funds: These provide the flexibility to invest in different asset classes. You can choose from equity, debt, or hybrid funds based on your risk appetite.

By separating your insurance and investment, you can maximise returns while ensuring adequate protection.

Tax Benefits and Implications
eTouch Life Goal offers tax benefits under Section 80C for the premium paid. The maturity proceeds might also be tax-free under Section 10(10D).

However, keep in mind that tax benefits should not be the primary reason for choosing an investment. Focus on overall returns and the suitability of the product for your financial goals.

The Role of a Certified Financial Planner
A Certified Financial Planner (CFP) can help you analyse whether eTouch Life Goal fits your financial plan. They can provide a comprehensive review and suggest alternatives if needed.

A CFP can also help you build a balanced portfolio. This includes life insurance, mutual funds, and other investments tailored to your needs.

Flexibility and Liquidity
eTouch Life Goal might have lock-in periods or penalties for early withdrawal. This can affect your financial flexibility.

Consider whether you might need access to your funds in the short to medium term. If liquidity is important, other investment options might be more suitable.

Assessing Your Long-Term Goals
Your decision should align with your long-term financial goals. Consider your retirement plans, children’s education, and other major expenses.

Make sure your investment strategy supports these goals without taking on unnecessary risks or incurring high costs.

Final Insights
Investing Rs. 1,800 per month in eTouch Life Goal is a significant commitment. You need to weigh the benefits against the costs and consider whether it fits your financial plan.

Alternative strategies, like combining term insurance with mutual fund investments, might provide better returns and coverage.

Consult with a Certified Financial Planner (CFP) to make an informed decision. They can help you design a plan that maximises your wealth while ensuring adequate protection.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

www.holisticinvestment.in