Dear Mr Shreekanth,
I am a 37 years old married man with two daughters from a middle class family. I am working presently in a private school with a Gross Salary of Rs 20,000 per month with Rs 16,000 net salary. My present EPF balance till May'17 is Rs 71,726 with a monthly contribution of Rs 1,354 (Employee+Employer). I am too late for this financial planning but still would like to start now. I have three traditional LIC policies:
- Jeevan Saathi SA 100000 Monthly Contribution Rs 388 since 15/12/2005 for 25 years.
- Jeevan Anuraag SA 50000 Monthly Contribution Rs 188 since 15/12/2005 for 25 years.
- New Jeevan Anand SA 500000 Monthly Contribution Rs 2392 since 20/06/2016 for 21 years.
- Completion of house construction started earlier in 3-5 years. (6-8 lakhs)
- Education expense for my 11 and 9 years daughters.
- Retirement.
5 Answers
Hi,
Based on the details shared by you,
1 - Your high priority action item is to get yourself adequately covered by buying a Term insurance plan.Once you buy a term plan, you may discontinue the existing LIC plans. The first two policies you may make them PAID-UP ones and Jeevan Anand policy can be just discontinued (lapse).
Kindly read :
https://www.relakhs.com/traditional-life-insurance-plan/
https://www.relakhs.com/insurance-importance-life-health-accident-covers/
https://www.relakhs.com/how-to-get-rid-off-bad-life-insurance/
https://www.relakhs.com/best-online-term-insurance-plans-india/
2 - After buying a term plan and discontinuing existing LIC policies, you may be left with some saved premium. Suggest you to buy a Personal Accident cover fir self and health insurance cover for family.
https://www.relakhs.com/best-personal-accident-insurance-policies-in-india-details-comparison/
https://www.relakhs.com/best-family-floater-health-insurance-plans-details-checklist-comparison/
3 - The third action item would be to maintain some Emergency fund, so that in case of any unforeseen contingencies, you have a fund which can be redeemed quickly. You may accumulate atleast 3 to 9 months of your monthly living expenses as Cash+Bank FD/RD+Liquid mutual funds.
4 - Have you already started the house construction?
5 - Next, you may prioritize planning your investments for Retirement and kids' higher education goals.
Kindly go through below articles and you may revert to me with your analysis ;
https://www.relakhs.com/retirement-planning-calculator-3-easy-steps/
https://www.relakhs.com/calculate-kids-education-goal-amount/
Thanks for your reply and sharing your views. I was also thinking of buying a Term Insurance and surrender LIC Jeevan Anand with Rs 2392 monthly. For emergency fund I have also saved 50k as cash. I am also planning to buy Personal Accident Insurance for self and health insurance cover for family but confused to choose. So please kindly suggest some good Personal Accident Insurance which I can buy online.
Yes I have already started the construction 2 years back and now only completion left. So for that goal I want to start SIP in Mutual Fund.
Hi,
Regarding Health insurance & Personal Accident insurance plans, kindly go through the above suggested articles.
For house construction expenses, do you want to accumulate the Corpus in next 5 years and then redeem (or) do you need it on a regular basis?
Yes I would like to accumulate the Corpus in next 5 years and redeem all. So, please suggest SIP amount and create a good diversified portfolio and the funds to choose from.I have also gone through your articles on Top performing funds for 2017 and others but still confuse since I am newbie and in the process of learning.So I am seeking your advice.
For Jeevan Anand its only 1 year completed and if I surrender now how much percentage will I loose?
Thanks.
Hi,
For a 5 year horizon and if you are ready to take some risk, suggest to consider investing in an Equity oriented balanced fund + MIP Fund (Growth option). Kindly note that Returns are not guaranteed on these schemes.
Ex : HDFC Balanced fund & Birla MIP 5 plan.
Kindly read :
https://www.relakhs.com/top-best-balanced-mutual-funds-returns/
https://www.relakhs.com/best-monthly-income-plans-india-mutual-funds/
As Jeevan Anand policy is one year old one, you will not get back any amount if you make it as a lapsed policy. But it is better to book some loses than to continue the premium payments.
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