The insurance business in India isn’t just growing, but also becoming more sophisticated in terms of product offerings. To help readers keep ahead of developments in this business, Mint features a Q&A on insurance every Monday.

I am a 30-year-old executive working for an MNC. I am looking at investing in a unit-linked retirement plan. Please suggest which fund option I should go for, wherein I have to pay lower fund management charges.

There are some retirement products available in the market that will allow you to create long-term wealth. I would suggest that you look at a product that gives you an option to invest in an index fund. Index funds invest typically in the 50 companies that make up the Nifty index on the National Stock Exchange and have lower fund management charges compared with other equity-linked funds. The fund can invest in equities in the range of 80-100% and debt and money market securities in the range of 0-20%. The Nifty is made up of select blue chip companies. In the long run, the fund value will grow higher with growth in each company’s share price.

I am 23 years old, working with a reputed firm in the financial intermediary sector with a salary package of Rs4.5 lakh per annum. I usually invest my money directly in the equity markets. I’m looking at insurance as an investment but I’m confused whether I should invest in a term plan that does not yield any returns or if I should invest in a retirement plan wherein I can get an advantage of an early start. Again, I’m confused with respect to the amount that I should keep aside for yearly premium.

It is good to see that you are thinking about insurance at a young age. Before deciding on any insurance plan, it is advisable that you undergo a financial health check. This is a need-based analysis that helps you determine and understand your liabilities and income from all sources as well as your future aspirations and resulting financial needs so that you can benefit from the best advice and plan your insurance investment wisely.

You can get more information about the financial health check on our company website. A retirement plan or an endowment plan will give you a cash benefit on maturity as well as the death benefit in case of a premature death before the policy term lapses.

Alternatively, you could opt for a term plan, but this will provide you with a death benefit only.

Readers are welcome to write in with their queries to askmint@livemint.com. The questions will be answered by senior executives from leading insurance firms.

This week’s expert is Bert Paterson, managing director, Aviva India.