Dhirendra Kumar's take on Free Insurance by Mutual Funds

Mr.Dhirendra Kumar of Value Research was asked for his views on Free Insurance by Mutual funds and this is what he said,

On insurance product mixed with SIP plans offered by Birla Sunlife, Reliance Mutual Fund, DSP:

It is an attractive thing. You are getting a term cover for free. The product or the term cover for free is offered by two fund families, which offer a reasonable range of good equity funds. So, if one has to get into equities steadily over time then these fund companies offer a good choice. It comes for free so get it and you do not have to put a lot of money upfront to buy it. So, getting a meaningful thing for free is a good idea and people should consider it. But, I do not think it’s a missed opportunity because the term cover which you get even when it comes to an end, you are not at a significant loss because term cover for a lot of people comes as a cheap avenue but not too many investors go for it. Anyway you will get a substitute for a very low cost. For somebody who is getting this benefit, it is almost like getting something worth Rs 2,500 per annum for free.

If I were to choose two funds, I would choose Birla SunLife Equity and Reliance Growth. Reliance despite having too many equity funds, the choice of good equity fund is getting limited.