For example, lets assume you have bought a house and have taken a loan of Rs 15 lakhs. Also assuming that you are the sole earning member of the house. Now, you meet with an unforeseen event (accident) and are out of action. You are not in a state to earn anymore. What would happen to your home loan? Obviously, you do not want your family members to bear the brunt of it nor would you want to see your dream home being seized by the bank. The answer to this dreaded question is ‘insurance’. It’s not home insurance. It is about insuring your ‘home loan’.
With this new alternative, you can insure your home loan. On doing so, the insurance company will take care of the pending amount that you owe to the concerned bank or any other loan company. However, it will not consider the amount that has already been paid by you. For instance, as stated in the above example, out of the Rs 15 lakh loan, you have repaid Rs 3 lakh and you meet with an accident. In such a situation, the insurer will take care of the due amount i.e. Rs 12 lakh and not the paid amount i.e. Rs 3 lakh.

While calculating the premium amount, the insurance company takes the following into account- the age of the person taking the loan, the loan amount, the tenure of the loan and the medical record of the individual.

Thus by insuring your home loan, you are protecting your family from future financial burden. With a wise decision, you ensure a roof over their head.

In simple terms, a mutual fund is a special type of company that pools together money from many investors and invests it on behalf of the group, in agreement to the stated set of objectives. Mutual Funds raise the money by selling shares of the funds to the public. It is much similar to any other company that sells stocks to the public. Funds then take the money they receive from the sale of their shares along with any money made from previous investments and use it to purchase various other investment, such as stocks, bonds and money market instruments.

After having collected the money, the role of the fund manager comes into picture. His major mission is to identify the right stock for investing the pooled amount. In short, the fund manager is the individual who is responsible for the performance of the funds. In fact, he has to ensure the healthy performance of the funds.

Now, lets take a quick glimpse of how these mutual funds originated.

To date back, mutual funds were started in Netherlands in 1822, and the second in Scotland in 1880's. Mutual funds were originally termed as ‘investment trusts’. The first American mutual fund was the ‘New York Stock Trust’, established in 1889. Most of the funds that followed after that were initiated in Boston in the early 1920's. On March 21st, 1924 the first official mutual fund took off. It was called the ‘Massachusetts Investors Trust’. This trend was later on followed by the rest.

As far as India is concerned, the first mutual fund industry started in 1963 with the formation of Unit Trust of India (UTI), which was initiated under Reserve Bank of India (RBI) regulations. The objective was to attract the small investors and introduce them to market investments. The first and foremost scheme launched by UTI was ‘Unit Scheme 1964’. Thereafter the schemes introduced were-Unit Linked Insurance Plan (ULIP) of 1971 and six new schemes during 1981-84 were launched. Further on, during the period between 1984-87 other funds were launched like children’s gift growth fund (1986), master share (1987), the first diversified equity scheme in India, India fund (Aug ‘96), the first Indian off shore fund, etc. Since then the growth of mutual funds has been tremendous. The success of Mutual Funds kept rising after that and today it has become a mainstream investment avenue for innumerable investors.