FinSure

Are mutual funds only for long term ?

A lot of people have this thought that mutual funds are only for long term but there are certain funds like liquid funds which generate returns on short terms as well.

Institute of keeping your money in current account at 0% or saving account at 2.5% you can park your money in liquid funds even if it is for 10 days it will generate returns on a daily basis.

It is also easily accessible can be redeemed and received in 24 or 48 hours.

Under insurance can cause of huge loss.

So recently there was a claim of building insurance in which the property was valued at 5 crore and insurance was of 5 crore as well but still the claim was settled at 50% of the claim value.

The very first thing we need to understand is that even though the 5 crore insurance and building is of 5 crores as well but we need to understand the number of things we have covered under 5 crores, maybe furniture, fixture, fitting, machineries, plate glass, glow sign board and any other kind of assets.

And if the claim is related to building or a part of the building and the building value is disclosed as 2.5 crores, here if the claim rises the claim will be slashed by almost 50% because the valuation of the property is at 5 crore and the insurance of the building is 2.5 crores here the average clause of insurance act takes place so the quantum of the claim decreases.

Hence it is necessary to have at least 10 to 15% above insurance as that of mentioned in balance sheet.