Under the Systematic Transfer Plan option, the
concept of rupee cost averaging is used and the net premium is initially invested in the Secure Plus Fund and thereafter every month, a proportion of the premium is transferred to the Growth Plus Fund
In an earlier post I wrote about how you can start investing with small amounts in mutual funds via SIP & make volatility of the market work for you in the
form of Rupee Cost Averaging.
You have lump sum amount to invest but hesitate to invest them completely in equity, so you could invest in a debt fund and start an STP to get the
benefit of rupee cost averaging.
There is an option of Systematic Transfer plan (STP) which utilizes the concept of rupee cost averaging
For investments other than tax saving purposes, SIP is a better approach (particularly for Equity Mutual Funds) as it has the advantage
of Rupee cost averaging.
It gives you the benefits
of rupee cost averaging and helps you taking a disciplined approach in your investments.
Also, when you invest in equity funds and feel market is high, put your bonus money in a liquid or ultra-short term fund and start a STP to reap the benefits
of rupee cost averaging.
SIPs give the benefit
of rupee cost averaging and bring discipline to your investments.
With the Systematic Transfer Option, the policyholder can choose to invest a part of his investment monthly in a low risk fund to avail the benefit of rupee cost averaging
Under the Systematic Transfer Plan, the net premium is first invested in the Exide Life Preserver Fund and thereafter every month, a part of the fund is transferred to the Exide Life Prime Equity Fund to utilize the benefit
of rupee cost averaging.