I appreciate your selfless and honest effort of guiding people in financial planning. Being a new comer in the field of investment, I have gone through most of your blogs which helped me a lot to start my financial planning.
I am 27 years old, unmarried and holding a NRI status currently. At present, my salary is approx. 1.3 lacs/ month which is deposited my NRE account.
Investment till date:
- PPF: 3lacs since 2015 (1.5 lacs will be deposited in April 2017).
- LIC New Endowment Plan for 25 years (Premium: 7,500 p.a.)
- LIC Varishtha Pension Bima Yojana in favour of my father
- Real Estate: Apartment within 60-70 lacs with a bank loan of 15 years.
- Term Plan of 1 crore: (HDFC Click2Protect Plus/ ICICI iprotect)
- Personal Accidental insurance – Should I go for a term plan with PAI rider (HDFC Click2Protect Plus) or a separate PAI (considering my age)? What should be the ideal value of PAI?
- SIP of 3000/ month of SBI Bluecip fund (large cap).
- After reading your articles on traditional insurance plan, I am sceptical of the Pension Bima Yojana in favour of my father. Should I discontinue it and fixed 3 lacs in MIP/ debt mutual funds for 3-4 years as emergency fund which can be withdrawn if required during any unforeseen contingencies. How should I invest this money?
- Since I want to continue to work for 2 more years in abroad before returning to India, I am not interested in tax-saving investments. Neither, I am not interested in share markets. I prefer to go for MIP, Debt-related MFs, Equity-related MFs. I would also like to continue with my PPF for 15 years. Could you please suggest the percentage breakdown in which I should invest for marriage (2years), child (4years), long term wealth creation, and retirement fund.
- I will consider taking a separate health insurance for family after marriage.
1 Answers
Hi,
1 - Though you parents are not completely dependent on you, it is advisable to take Term insurance plan at the earliest.
Read :
https://www.relakhs.com/best-online-term-insurance-plans-india/
2 - You may consider to enhance the health insurance sum assured for your parents. May be, you can have a look at Super Top up health insurance plans.
Read:
https://www.relakhs.com/top-up-health-insurance-plans-super-top-up-india/
3 - As of now, your health cover is based on your employment, it can be a risky factor. You may consider taking an individual mediclaim and later-on buy a Family floater plan.
4 - Once you buy a term insurance cover, you can discontinue your LIC policy.
https://www.relakhs.com/how-to-get-rid-off-bad-life-insurance/
5 - PPF is one of the best debt-oriented long term savings product. But do look at allocation (% of ppf in your portfolio) based on allocation of other assets to your long term goals.
6 - Suggest you to buy a stand-alone Personal accident cover to the extent of at least 50 to 100% of your term cover.
Read:
https://www.relakhs.com/best-personal-accident-insurance-policies-in-india-details-comparison/
7 - You may continue with pension plan (father's).
8 - You may start accumulating money for Emergency fund (for self & parents), can be around 3 to 9 months of your expenses & parents monthly expenses. For this you can consider a mix of Cash + FDs + Liquid fund / arbitrage fund. But do understand the risks associated with debt funds before you opt for.
Read:
https://www.relakhs.com/debt-funds-types-benefits-risk-vs-return/
https://www.relakhs.com/best-debt-mutual-funds-india-top-debt-funds/
https://www.relakhs.com/best-arbitrage-funds-returns/
9 - You can consider Debt funds or conservative mip fund to accumulate for your marriage expenses. If you do not like to take risk, can consider FDs in your NRE account, as the interest income is tax-exempt.
10 - For your long-term goals, you can consider Equity oriented funds. Go ahead with SBI bluechip scheme to start with.
Suggested readings;
https://www.relakhs.com/retirement-planning-calculator-3-easy-steps/
https://www.relakhs.com/calculate-kids-education-goal-amount/
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