Key Factors To Note While Investing In A Dynamic Bond Fund

Before addressing the topic, let me narrow down the context of the subject for you. In this article, we will highlight some important aspects of Dynamic Bond Fund to keep in mind in order to get the most out of your investments in the fund market.

Let us first start with the definition of a Dynamic Bond Fund and how it works. A Dynamic Bond Fund invests in debt mutual funds over a specific period of time to yield optimum results irrespective of the prevailing market conditions. It requires you to invest in the fund market and put your trust solely on the fund manager as she will be playing a lead role in the proceedings.

Some major aspects to consider

Being an open-ended debt scheme, Dynamic Bond Funds have higher chances of yielding greater returns than other investment plans. However, they may be highly risky investments at times owing to fluctuating interest rates in the bond market. The role of the fund manager in this scenario is a very important one. The fund manager needs to bid for a specific duration, predicting the interest rates in the market and if everything goes according to plans, then the investments will be worth it.

However, the call taken by the fund manager is not always in sync with market trends and as a result, investors may have to encounter temporary setbacks. You can choose short- or long-term investment plans as well. Long-term investments, while being risky, can help you get better returns as compared to short-term plans. Hence, choose your Dynamic Bond Fund scheme wisely.

A few points to keep in mind

• The first thing before investing in a fund is to check records of past years with regard to fund performance.
• Check how the fund performed at junctures when market values and interest rates changed.
• Do not solely depend on the returns which you are expecting from the investment made in a Dynamic Bond Fund. Take it as your additional source of income.
• Only opt for investing in this scheme if you are planning to invest for a period more than 36 months.
• There are many new funds and offers in the market which may promise higher returns on paper. However, choose funds which are popular or have been doing well over a long period of time.

Investing in Dynamic Bond Funds can be useful in various ways. Keeping aside the risks of the market and the vital role played by the asset manager, a Dynamic Bond Fund could actually help you in meeting your financial objectives faster. However, you need to stay invested for a longer period of time in order to reap good returns on your investment.

Remember that these bonds are inversely proportional to the interest rates prevailing in the fund market. The higher the interest rate, the lower is the value of the bonds and vice versa.

Choosing The Best Term Insurance Plans – Tips That Will Help

Your term insurance plan, as many financial experts would say, is what you make of it. Sounds confusing? While the definition of the best term insurance plan for you and your family may vary, a lot of it depends on you and how you choose the policy in question.

A term insurance plan is the most basic and popular life insurance offering since it offers a lump sum benefit or sum assured to the policy holder’s family in case of his/her untimely or unfortunate demise. The reason behind the popularity of these plans is also because of their comparatively lower premiums for the coverage that you receive throughout your lifetime.

However, while looking for the best term insurance plan, people often end up  making some common mistakes due to lack of awareness more than anything else. Here are some tips that might help you choose the best term insurance plan that meets your needs.

Tips to choose the best term insurance plans:

• Do not skimp on the sum assured for paying a cheaper premium

Many people choose term plans with a lower sum assured for saving on premium payments. However, saving smaller amounts in premium payments every year while sacrificing a lump sum coverage amount, is a mistake that you should avoid by all means. The sum assured should be chosen on the basis of your future requirements and should be enough for covering all your financial obligations in case of your untimely demise.

• Do not opt for a lower tenor

Choosing a lower tenor for the term plan means that you will enjoy coverage only for a shorter period of time. Term insurance plans pay out the sum assured in case of the policy holder’s death during the tenor of the policy. In case the policy holder survives this period, no maturity payment is made. If you wish to get maximum coverage, you should choose the highest possible tenor of the policy for keeping you secure till a higher age.

• Make sure you fill up the proposal form correctly

Many people make the mistake of getting their brokers/agents to fill out proposal forms for term plans. You should endeavor to fill up the form yourself while verifying all the details that you provide in the same. The form is the basis of the final insurance contract on which the policy is issued by the insurer. Incorrect details or misrepresentation of important facts may negatively impact future claims.

• Compare insurance plans before buying

Do not just go for the first available term plan that you see. Make sure that you compare multiple insurance plans and providers before signing on the dotted line. A thorough comparison will help you compare premiums, sum assured/coverage, additional benefits and claim settlement ratio/track record of the insurance company.

These are key tips that will help you choose the best term insurance plan for yourself. Additionally, make sure that you get a term plan at the earliest since you stand to get higher coverage at a lower premium if you purchase the same at a young age.