By Tensing Rodrigues
In 2007, I had invested around Rs 50,000 in JM BASIC FUND and now its value is around just Rs 19,000 even after markets have recovered by 81 per cent. What should I do - redeem fully or wait and watch? I am totally confused because rest of my funds have recovered and started giving positive return. — Nivedita V Zambotkar.

I too had invested in that fund. But the fund has failed to perform. You could redeem your investment and invest in another fund, instead of waiting longer. Such things happen. All that you pick does not turn out to be gold.
Are annuity plans beneficial for a person in early 30s? Please suggest some well-run plans? How good are Pension MFs for long-term investment? ­—Andrew Braz
Annuity or pension plans are best to start in your thirties. Because then you can have a long run. You will need to draw your pension only when you turn sixty, I suppose. So you get a full thirty years to grow your pension corpus.
But, do not go for any designated pension plans, however good they may be; because they are not tax-efficient. Create your own “annuity” or “pension” plan by investing in a small basket – 3 to 5 funds - of diversified equity funds. The balance in these funds will constitute your pension corpus. When you feel the need to draw the pension, start a monthly SWP – Systematic Withdrawal Plan. Every month your “pension” will get credited to your bank account, with minimal tax liability.
Can child ULIPs be taken in the names of both parents? I have a critical illness cover taken separately from Bajaj Allianz General Insurance, do I need to take a CI rider on the child ULIP as well? How will CI rider benefit me? — Paul D’Souza
Yes, you can take the child ULIPs on the lives of both the parents separately, if both the parents are working. Do not look at the ULIP as an investment. Look at it as a protection. If the contribution from the income of both the parents is critical for the future of the child, it is desirable that you take ULIPs on the life of both the parents. It would be better if you take a waiver of premium rider for the ULIPs. Then the protection of the future of the children will be complete.
ULIPs, like all endowment plans, are meant to protect your investment for the future of the child. While you are alive you will save and invest for the future of your child – say for his education or marriage. But if you suddenly cease to exist, this investment plan will abruptly end. But if you buy an endowment plan (ULIP) with a waiver of premium rider on your life, then the insurance company will invest on your behalf, exactly what you were investing, and the investment plan for the future of your child will be completed, whether you are around or not.
It makes sense to take a CI rider on the ULIP because then the company will begin paying the premium on your behalf if you are diagnosed to have CI, just as it would do if you were to die. You will agree that CI is as “deadly” as death itself – as it can rob you of income and your child of its future.
You said some time back that health insurance companies have improved their settling claims through TPAs; could you please suggest names of these health insurance companies? How does Hospital Cash policy make payments? Are gains made from investing in shares of company’s and profits made from derivative trading exempt from tax? — Sandra Pinto
When I said that health insurance companies have improved their settling claims through TPAs, I did not have a specific company in mind; the claim settlement in general has improved. So you can try any company, whose service standards and cost of insurance is good enough.