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Ramalingam

Ramalingam Kalirajan  |8111 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 11, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
Asked by Anonymous - Apr 12, 2024Hindi
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Please guide us on Health insurance and term insurance policy ?

Ans: Let's delve into the importance of health insurance and term insurance policies in securing your financial well-being:

Health Insurance:

Health insurance is a crucial aspect of financial planning, providing coverage for medical expenses arising from illness or injury.
It safeguards you and your family against the financial burden of healthcare costs, ensuring access to quality medical treatment without depleting your savings.
Choose a comprehensive health insurance policy that offers coverage for hospitalization, pre and post-hospitalization expenses, outpatient treatments, and critical illnesses.
Consider factors such as coverage limit, network hospitals, co-payment clauses, and waiting periods before selecting a policy.
Regularly review your health insurance coverage to ensure it remains adequate for your evolving healthcare needs, especially as you age.
Additionally, consider purchasing a health insurance policy with lifelong renewability to secure coverage in the long term.
Term Insurance:

Term insurance provides financial protection to your family in the event of your untimely demise, ensuring they can maintain their standard of living even in your absence.
It offers a high sum assured at an affordable premium, making it a cost-effective way to secure your loved ones' financial future.
Opt for a term insurance policy with a sum assured that adequately covers your family's financial needs, including outstanding debts, future expenses like education and marriage, and income replacement.
Choose a policy with a flexible tenure that aligns with your financial obligations and life stage. Consider opting for a longer tenure if you have dependents or financial liabilities that may extend into the future.
Regularly review your term insurance coverage to ensure it remains sufficient, especially during significant life events such as marriage, childbirth, or career advancements.
By investing in both health insurance and term insurance policies, you can protect yourself and your loved ones from unforeseen financial setbacks and secure a peaceful future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Ramalingam

Ramalingam Kalirajan  |8111 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 17, 2024

Asked by Anonymous - Jan 04, 2024Hindi
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Money
Hi..i would like to purchase a medical insurance policy which have term insurance too..Please advice
Ans: t's commendable that you're considering both medical and term insurance. Here's some advice on each:

Medical Insurance Policy:
When purchasing a medical insurance policy, consider the following:

Coverage Amount: Opt for a policy with adequate coverage that can handle major medical expenses.
Pre-existing Conditions: Check if the policy covers pre-existing conditions, and if there's a waiting period.
Network Hospitals: Ensure the policy offers a wide network of hospitals for cashless treatments.
Claim Process: Look for policies with a straightforward and hassle-free claim process.
Additional Benefits: Some policies offer benefits like OPD coverage, maternity benefits, etc. Choose based on your needs.
Term Insurance Policy:
For term insurance, focus on:

Coverage Amount: Choose a coverage amount that would adequately support your family's financial needs in case of your untimely demise.
Policy Tenure: Opt for a policy term that aligns with your financial obligations and retirement age.
Rider Options: Consider adding riders like critical illness or accidental death benefit for comprehensive coverage.
Claim Settlement Ratio: Look for insurers with a high claim settlement ratio for a smoother claim process.
Premium: Compare premiums from different insurers to get the best value for your money.
Remember, while it might be convenient to combine both in one policy, it's often more beneficial to purchase them separately to ensure tailored coverage for each need. It's advisable to consult with an insurance advisor or planner to help you choose the right policies based on your specific requirements and budget.

..Read more

Ramalingam

Ramalingam Kalirajan  |8111 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 10, 2024

Asked by Anonymous - Jul 04, 2024Hindi
Money
Need to buy a comprehensive health insurance for myself, wife and a kid 3 years old . Also need to buy term plan. Pl suggest.
Ans: Buying comprehensive health insurance and a term plan for your family is a wise decision. It ensures financial security in case of unforeseen medical emergencies and provides life coverage. Let’s explore the best way to choose and purchase these insurance plans.


First, I appreciate your proactive approach towards securing your family’s future. Thinking about health insurance and a term plan at this stage is a responsible move. This decision will safeguard your family's financial well-being.

Understanding Your Needs
You are a family of three: yourself, your wife, and a 3-year-old child. You need comprehensive health insurance and a term plan. Let's break down how to proceed effectively.

Choosing Comprehensive Health Insurance
1. Sum Insured:

Opt for a high sum insured to cover significant medical expenses. Consider Rs. 10-15 lakhs coverage for your family.

2. Network Hospitals:

Choose an insurance provider with a wide network of hospitals. This ensures cashless treatment options in emergencies.

3. Pre and Post-Hospitalization:

Look for plans covering pre and post-hospitalization expenses. These costs can add up and strain your finances.

4. No-Claim Bonus:

Select a policy offering a no-claim bonus. This increases your sum insured for every claim-free year without additional premium.

5. Family Floater Plan:

A family floater plan covers all members under a single policy. It's cost-effective and simplifies management.

6. Maternity and Newborn Cover:

Check if the policy includes maternity benefits and newborn cover. This is crucial for families planning to expand.

7. Daycare Procedures:

Ensure the policy covers daycare procedures. These are treatments requiring less than 24 hours of hospitalization.

8. Critical Illness Cover:

Consider adding a critical illness rider. It provides a lump sum amount on diagnosis of specified critical illnesses.

Evaluating Term Plan Options
1. Coverage Amount:

Opt for a term plan with coverage of at least 10-15 times your annual income. This ensures financial stability for your family.

2. Policy Tenure:

Choose a tenure covering your working years. Ideally, the policy should last until your retirement age.

3. Claim Settlement Ratio:

Check the insurer's claim settlement ratio. A higher ratio indicates reliability and better chances of claim approval.

4. Riders and Add-Ons:

Consider adding riders like accidental death benefit, critical illness cover, and waiver of premium. These enhance your policy's coverage.

5. Premium Waiver:

Choose a term plan with a premium waiver option in case of critical illness or disability. This ensures the policy remains active.

6. Flexibility:

Select a plan allowing flexibility in premium payments. Options like annual, semi-annual, or monthly premiums can be convenient.

7. Online vs. Offline Plans:

Online plans are often cheaper due to lower administrative costs. Compare both options and choose the best fit.

8. Inflation Adjustment:

Ensure your coverage keeps pace with inflation. Some term plans offer increasing sum assured options.

Health Insurance: Key Features to Consider
1. Room Rent Cap:

Check if the policy has a room rent cap. Higher caps or no limits are preferable to avoid out-of-pocket expenses.

2. Co-Payment:

Avoid policies with high co-payment clauses. These require you to pay a portion of the claim amount.

3. Sub-Limits:

Beware of sub-limits on specific treatments. Choose policies with minimal or no sub-limits for better coverage.

4. Network Hospitals:

Ensure the insurer has a vast network of hospitals. This facilitates cashless treatment and reduces hassle during emergencies.

5. Health Check-Ups:

Some policies offer free annual health check-ups. These are beneficial for monitoring your family's health.

Term Plan: Important Considerations
1. Pure Protection:

Term plans are pure protection plans. They provide a high sum assured at an affordable premium.

2. Low Premiums:

Term plans have lower premiums compared to other life insurance policies. This makes them cost-effective.

3. No Maturity Benefit:

Term plans do not offer maturity benefits. The policy only pays out in case of the policyholder’s death.

4. Tax Benefits:

Premiums paid for term insurance are eligible for tax deductions under Section 80C. Death benefits are tax-free under Section 10(10D).

Making an Informed Decision
1. Compare Policies:

Use online comparison tools to compare policies. Look at features, premiums, and customer reviews.

2. Read Reviews:

Customer reviews provide insights into the insurer's service quality. Check for feedback on claim settlement processes.

3. Consult a Certified Financial Planner:

A CFP can help tailor policies to your specific needs. They provide expert advice and personalized recommendations.

Steps to Buy Health Insurance and Term Plan
1. Assess Your Needs:

Evaluate your family’s medical history, lifestyle, and future needs. This helps determine the appropriate coverage.

2. Research and Compare:

Research various policies and compare features. Look for policies offering the best value for your needs.

3. Check Exclusions:

Understand the exclusions in both health and term plans. This prevents surprises during claim time.

4. Read Policy Documents:

Read the policy documents carefully. Ensure you understand all terms, conditions, and benefits.

5. Apply Online:

Most insurers offer online applications. It’s convenient and often comes with discounts.

6. Medical Tests:

Undergo any required medical tests. Accurate disclosure of health conditions is crucial for claim approval.

7. Review Annually:

Review your policies annually. Update them as your needs change.

Benefits of Comprehensive Health Insurance
1. Financial Security:

Health insurance provides financial security during medical emergencies. It covers hospitalization and treatment costs.

2. Peace of Mind:

Knowing you’re covered brings peace of mind. You can focus on recovery without financial worries.

3. Quality Healthcare:

Insurance ensures access to quality healthcare. You can choose the best hospitals and doctors.

4. Preventive Care:

Many policies cover preventive care and annual check-ups. This helps in early detection and treatment of diseases.

Advantages of Term Insurance
1. Financial Protection:

Term insurance ensures your family’s financial stability. It provides a lump sum amount in your absence.

2. Affordable Premiums:

Term plans are affordable. They offer high coverage at low premiums.

3. Flexibility:

You can choose the coverage amount and tenure. This provides flexibility to match your financial goals.

4. Tax Benefits:

Term insurance premiums qualify for tax deductions. This reduces your tax liability.

Final Insights
Choosing the right health insurance and term plan requires careful consideration. A high sum insured and extensive network hospitals are crucial for health insurance. For term plans, adequate coverage and a reliable insurer are key. Regularly review and update your policies to ensure they meet your evolving needs. Your proactive approach and responsible financial planning are commendable. By securing comprehensive health and term insurance, you’re ensuring a secure future for your family.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
Ravi

Ravi Mittal  |550 Answers  |Ask -

Dating, Relationships Expert - Answered on Mar 19, 2025

Asked by Anonymous - Feb 02, 2025Hindi
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Relationship
Hello sir/ma'am...i am a girl of 21 yrs and my bf 24yrs.We met each other through an online friendly chat app.Since 1yr,we r chatting,video and voice calls.He told me,he loves me and wanna marry me.I too liked him and I took the matter to my parents and they agreed for our marriage also.I made him talk to my parents.He didn't still let this matter know to his parents.Recently,without my permission..my cousin sis took his insta id and chatted with him like an unknown girl for fun.She created an account in insta and sent a request to him n he accepted that request and continued chatting with her.She told him like she saw his profile and interested and so given a request.He was asking her for voice call,video call,but she didn't accept.She sent some other picture when he insisted her pic and later he asked her "do u like me" for which she funnily replied love at first sight and love you.He told her he want to express his love to her in voice call and later he too proposed..she showed all those screen shots to me. I am broken.I questioned him what is all this?...for which he replied...he just chatted to find out whether that account was a fake account or real account...but,the screen shots were showing something different..when my cousin called him bro..he was very upset and scolded her too. Now,he saying he thought it's a fake boy id and wanted to make fun of and even fought with me saying i don't trust him and without his acceptance..i gave his id to my cousin..but,i havent given.. He is saying he wanted to test whether it is a fake or a real account and so he made fun off and didn't mean it and that too just chatting it is n not to take it seriously and he loves me much.. I am confused after this whether to proceed for marriage..he isthe first guy and love in my life...should i believe him or let him go or should i give him one more chance?..please give u r advice..thank you
Ans: Dear Anonymous,
I am so sorry that you are in this situation. While I can't make a decision for you, I can help you by pointing out how this looks like from an outsider's perspective- your BF's interactions with this profile do not really support his claim of "just testing if it's a fake account." It seems like he was interested in chatting and continuing the flirty conversations. This does not mean he is in love with the person behind that online profile, but it surely looks like he can go behind your back for some thrill.

Trust and honesty are two very important things in a relationship, and if you are planning on getting married, this is not a good start. Moreover, his getting angry at you upon confrontation is a red flag- he tried to gaslight you.
It's your choice whether you want to leave or give him another chance but before you make a decision in haste, ask yourself-
1) If he loves you, would he flirt with someone or even chat with a stranger for entertainment?
2) Would you do the same to him?
3) Is he taking responsibility and asking for forgiveness?
4) Can you trust him completely after this or would you always keep wondering if he is cheating on you?
Once you answer these honestly, I think you will know what's the right thing to do.

Hope this helps.

...Read more

Ramalingam

Ramalingam Kalirajan  |8111 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Mar 19, 2025

Asked by Anonymous - Mar 17, 2025Hindi
Money
I am 39 years old and my wife is 38 working and my son is 7 years. I earn 35LPA my wife 15LPA. I started with zero as from a young age I took care of my parents by paying tuition and funded by my education. I completed engineering and started paying off my education loan from my first day of work. 2015 I got married and in 2016 we bought our first house. I moved my parents there and I take care of them they are financially dependent on me and I have a 4L health insurance for them. The first house is now worth 55L and I have paid off this loan. We built our 2nd house its worth around 1.2 crore and I have a loan of 70 lakhs left. I have a plot worth 30L which I have bought. I have 40L in MF and stocks, I do SIP of 1Lakh per month ( XIRR was good at 20% but now it's at 13%). I have 20L in gold and 10L in EPF. I have a 1cr term insurance and I do Jeevan umang of 4L per year started last year and Jeevan tarun for my son for 1.5L per year started 2 years ago and I have 40k of Jeevan anand started in 2011 for 25 years. My fear : My parents were dependent on me, and I had nothing to fall back on when I started my career. I do not want to be the same for my son. I want to be financially self-reliant when he starts his career and his life. I want to ensure that he doesn't worry about us when he starts his work life or if he wants to start a business, he has the freedom to do so. I have 15 years left in my career. I want to make sure my wife is also secured if I am not around. My questions is what can I do more to ensure we are financially well off?
Ans: You earn Rs. 35 LPA, and your wife earns Rs. 15 LPA.

You support your parents financially and have Rs. 4L health insurance for them.

Your first house is worth Rs. 55L and is fully paid off.

Your second house is worth Rs. 1.2 crore with a Rs. 70L loan.

You own a plot worth Rs. 30L.

Your investments include Rs. 40L in mutual funds and stocks.

You invest Rs. 1L per month in SIPs.

You have Rs. 20L in gold and Rs. 10L in EPF.

Your term insurance is Rs. 1 crore.

You have investment-linked insurance policies.

Your goal is financial independence for yourself and your family. You want to ensure your son does not have financial burdens when he starts his career.

Strengths in Your Financial Planning
You have built wealth despite challenges.

Your high savings rate helps in wealth accumulation.

Your SIPs give long-term compounding benefits.

Your first home is debt-free, providing stability.

Your gold holdings offer liquidity in emergencies.

Your EPF provides retirement security.

Your term insurance gives financial protection.

Areas That Need Improvement
Your insurance-linked policies are not wealth creators.

Your home loan is a major liability.

Your gold holdings may not generate high returns.

Your current insurance cover may not be enough.

Your parents’ health cover might be inadequate.

Your son’s education and future needs require better planning.

Steps to Strengthen Financial Security
Increase Term Insurance Cover
A Rs. 1 crore cover is low given your income and liabilities.

You should have a cover of at least 15 times your annual income.

Increase your term insurance to Rs. 2.5 crore for full protection.

Ensure your wife has her own term cover as well.

Reassess Your Insurance-Linked Investments
Traditional insurance policies offer low returns.

They do not provide inflation-beating growth.

Surrendering them and shifting to mutual funds is a better option.

This will give higher returns and better flexibility.

Pay Off Your Home Loan Strategically
Your home loan balance of Rs. 70L is a major liability.

Focus on repaying it within the next 5-7 years.

Increasing EMI payments or making part prepayments can help.

Avoid extending the tenure to reduce interest burden.

Optimise Your Mutual Fund Investments
Your SIP of Rs. 1L per month is a strong wealth-building tool.

XIRR of 13% is still a good return for long-term investing.

Ensure your portfolio has a mix of large-cap, flexi-cap, and small-cap funds.

Actively managed funds will help in capturing market opportunities.

Avoid index funds as they limit potential gains.

Strengthen Your Parents’ Health Insurance
Rs. 4L health cover for them may not be enough.

Increase their health insurance to Rs. 10L with a super top-up plan.

This will prevent financial stress in case of medical emergencies.

Plan for Your Son’s Education and Future
Higher education costs are rising rapidly.

Start a dedicated mutual fund portfolio for his education.

Avoid insurance-linked child plans as they offer poor returns.

SIPs in equity funds can provide high returns over 10-15 years.

Ensure flexibility in investments to support his career or business plans.

Secure Your Wife’s Financial Future
Your wife should have her own investments independent of you.

Ensure she has adequate insurance and retirement savings.

Consider joint ownership of assets for financial security.

Encourage her to invest in equity mutual funds for wealth creation.

Retirement Planning and Wealth Creation
You have 15 years left in your career.

Focus on accumulating at least Rs. 10-12 crore for retirement.

This will ensure financial independence and a secure future.

Continue SIPs and increase them whenever income grows.

Diversify into debt funds for stability in later years.

Systematic withdrawal plans (SWP) will help manage post-retirement cash flow.

Finally
Increase your term insurance for full protection.

Reallocate funds from low-return insurance policies to mutual funds.

Focus on clearing your home loan early.

Strengthen health insurance for your parents.

Create a dedicated fund for your son’s education.

Ensure your wife has financial security even in your absence.

Keep investing for long-term wealth creation and retirement security.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

...Read more

Ramalingam

Ramalingam Kalirajan  |8111 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Mar 19, 2025

Asked by Anonymous - Mar 17, 2025Hindi
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Hello Sir - I have taken a HDFC Unit Linked pension plan in 2008 and the fund value is approx. 49 lakhs. The policy matures in 2030 and allows for commutation of 1/3rd of fund value (with mandatory annuity for balance 67%). My HDFC Life Relationship manager is suggesting that he will transfer the proceeds of this fund to a new HDFC Smart life pension plan (via surrender of old policy and immediate reinvestment as single premium in the new policy) for a term of 5 years. At the vesting date, I will be allowed to remove 60% of the fund value as tax free commuted pension and will need to take annuity only for remaining 40% of fund value. This is beneficial for me (since tax free commutation will be 60% instead of current 33%). In such a case, will the surrender of old policy and immediate reinvestment into new smart pension plan be a taxable transaction in India? I have claimed 80CCC benefits for part of premiums paid in the past. HDFC has informed me that the surrender value will not be taxable as no amount is received by me and the full amount is reinvested into the new policy (HDFC will also not do TDS). Is this correct? Thanks for your advice.
Ans: You have invested in a unit-linked pension plan since 2008.

The current fund value is Rs. 49 lakhs.

The plan matures in 2030.

As per the policy, you can withdraw 33% tax-free and the rest must be used for annuity.

Your relationship manager is suggesting surrender and reinvestment into a new pension plan.

The new plan allows 60% tax-free withdrawal instead of 33%.

You need to evaluate whether this switch is beneficial from a taxation and financial perspective.

Taxation on Surrender of Old Pension Plan
Pension plans under section 80CCC get tax benefits during investment.

If you surrender, the surrender value is taxable as per your income slab.

HDFC claims that no tax will apply as the amount is reinvested directly.

However, as per income tax laws, surrendering a pension plan leads to taxation.

Even if reinvested, the surrender value is added to taxable income.

Since you have claimed 80CCC benefits, surrendering can result in tax liability.

Misconception About Tax-Free Transfer
HDFC is not deducting TDS, but that does not mean no tax is due.

Income tax liability exists even if the amount is not received in hand.

If tax authorities later verify, you may face penalties or additional taxes.

You need written confirmation from HDFC and a tax expert’s opinion.

Evaluating the New Pension Plan Offer
The new plan allows 60% withdrawal instead of 33%.

The remaining 40% must still go into annuity.

Annuity income is fully taxable every year.

The new plan has additional charges, which can reduce returns.

The lock-in period of 5 years restricts flexibility.

If your goal is wealth creation, better options exist.

Should You Switch to the New Plan?
The tax-free withdrawal of 60% seems attractive, but consider the surrender tax.

If you are in the highest tax bracket, surrendering can be costly.

Locking funds in another pension plan reduces flexibility.

Instead, investing in mutual funds can give higher returns and better control.

You can withdraw systematically without annuity restrictions.

Reinvesting in a pension plan limits future financial choices.

Better Alternatives for Retirement Planning
Instead of shifting to another pension plan, consider equity mutual funds.

Mutual funds allow withdrawals with lower tax impact than annuities.

Debt mutual funds provide stability while maintaining flexibility.

Systematic withdrawal plans (SWP) help manage retirement income efficiently.

Combining equity and debt investments gives better post-retirement security.

What Should Be Your Next Steps?
Consult a tax expert before surrendering your pension plan.

Get written confirmation from HDFC on taxation treatment.

Compare annuity income vs. mutual fund withdrawals for retirement.

Ensure flexibility in withdrawals rather than locking into another pension plan.

Build a diversified portfolio that balances risk and liquidity.

Finally
Surrendering your pension plan may trigger tax liability.

Reinvesting in another pension plan may not be the best financial decision.

You need flexibility and better returns for retirement.

Mutual funds offer tax-efficient and high-growth alternatives.

Evaluate all options before making a final decision.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

...Read more

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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