Name: Rajeev (36), Hema (34), Savi (6) and Rahul (4)
Resides in Gurgaon, Haryana
Net annual income
(Rs 15.24 lakh)
A comprehensive financial plan securing all goals — kid’s education, daughter’s marriage, retirement, international vacation, investment and insurance planning.
Net monthly surplus
Fixed Deposits : R 2,50,000
Recurring Deposits : R 1,60,000
PPF : R 2,65,000
EPF : R 3,60,000
Equity Mutual Funds : R 3,00,000
Gold : R 5,00,000
Plot at Hometown : R 8,00,000
Insurance (Surrender Value): R 1,80,000
Emergency fund: Adequate emergency fund in the form of recurring deposits.
Life insurance: Total life coverage of R 13 lakh with annual premium of R 50,000 towards four traditional policies and ULIPs
Health Insurance: Company provided family floater of R 5 lakh.
Investments: Exposure to debt, mutual funds and real estate, but no direct stock investments.
Emergency Fund: Amount in recurring deposits can meet up to 3 months of expenses.
Express TIP: Salaried people should maintain at least 3 months of emergency expenses as a measure of last resort to face temporary uncertainties in life.
Life Insurance: Rajeev needs life cover of R 1 crore. A term plan for 25 years will cost him approximately R 15,000 per year. He should take one and discontinue the existing policies. It will result in additional cash flow of R 35,000 per year which can be channelised towards his financial goals.
Health Insurance: Rajeev should take a family floater of at least R 10 lakh which will cost him approximately R 20,000 annually.
Express tip: Despite having employer-provided health insurance benefit, one should have a personal comprehensive family health cover.
Accident Insurance: A personal accident policy of R 50 lakh is recommended for Rajeev costing approximately R 6,000 annually.
Express tip: Disability is a neglected area of financial life. It’s important to have disability protection along with life and health insurance as permanent /partial disability can jeopardise your regular future income.
Planning for Goals
Savi’s Graduation (2023 to 2026): Existing PPF will fetch R 6.40 lakh. For the remaining gap, SIP of R 4,000 pm should be started in diversified equity mutual funds.
Rate of return assumed 12% in diversified equity mutual funds.
Savi’s Post-Graduation (2026 to 2028): To achieve this goal, Rajeev should start investing R 8,500 pm in