Which is better ?

As for me mutual fund is better. You can still use the money in case of emergency. It's just a matter of practice in investing your money well.

Both are good, and both are needed. Mutual funds, particularly the diversified equities will give a much better result than the insurance, but then you cannot compare, insurance with mutual funds. Both are different, and with mutual funds, you can spend it on some thing you need, whereas insurance is for your old age, as well as for life saving moments.

I think mutual fund is better but only when you invest through SIP (systematic investment plan). They say you would never be in loss. Though I have invested both in Insurance and Mutual funds.

The first point is Insurance is not for investing money. It is for insuring something from economic loss. So both deal with different purposes. Insurance companies use investing plans just to grab attention of people. Mutual Funds do have their own drawbacks, though SIP investing gives a good start it is not the best way for anyone who wants to be more than just secure. Happy MyLotting!

not in business level as well as economic level investing on mutual funds is better than insurance

It's defnitely Mutual Fund. I have been investing from long back and now money is creating money for me:)