Primary goals to be met easily
Kolkata-based
Sarkars will have to defer some of their goals and revamp the insurance
portfolio.
Suman,36,
and Swarnali Sarkar 31, are both employed and bring in a combined monthly
income of 1.55 lakh. They live in Kolkata in their own house with their
three-year-old child. They own two houses worth 50 lakh, which have been merged
into one, and have taken two loans which are currently worth 36 lakh. They are
paying combined EMIs of 38,401 for these. Their portfolio, which is worth 71.8
lakh, comprises 50 lakh of real estate, 2 lakh cash, equity in the form of
mutual funds worth 10.3 lakh, and debt worth 9.5 lakh in the form of EPF, PPF
and insurance maturity value. Their goals include building an emergency corpus,
buying a car and a house, taking a vacation, saving for the child’s education
and wedding, and retirement. However, lack of surplus means that they will have
to defer the goals of buying a car and house, as well as taking vacation, till
a further rise in their incomes.
Financial
Planner Pankaaj Maalde suggests that the couple first build an emergency corpus
of 3.4 lakh, which is equal to three months’ expenses, and a medical buffer of 2.5
lakh for the parents. For this they can allocate their cash and insurance
value. They also want to build a corpus of 55 lakh for their child’s higher
education in 15 years. For this, they can start an SIP of 11,000 in a
diversified equity fund. For the child’s wedding in 24 years, they want 1.2
crore. The goal can be met by starting an SIP of 8,000 in a diversified equity
fund and 2,000 in the gold bond scheme. Finally, for retirement in 24 years,
they will need 6 crore. For this, they can allocate the EPF, PPF and mutual
fund corpuses. In addition, they should start an SIP of 20,000 in a diversified
equity fund, besides putting in 500 a year in the PPF.
For
life insurance, Suman has a term plan of 50 lakh and seven traditional plans
worth 25 lakh. Maalde suggests he continue with the term plan, surrender four
of the traditional plans and continue with three as a debt component of their
portfolio. He should also buy two term plans—1 crore for himself and 75 lakh
for his wife—which will cost 1,667 a month. For health insurance, he has a
floater plan of 5 lakh from his employer and 5 lakh independent plan for
himself. He is advised to buy a 5 lakh plan for his wife at 583 a month. He
should also dispense with the 10 lakh accident disability plan and buy 25 lakh
plans for himself and his wife at 583 a month.
