Hello Sir, I am 54 Year Old working on senior Position in Listed company and drawing CTC of 50+ Lakh. last few years I am suffering from high Diabetic and HBA1C is in uncontrollable state. I have taken home loan of 1.5 Cr and Also have invested in commercial property worth Rs. 1 Cr. I feel worried and guilt as I did not bought term Insurance when I was healthy and fit. Now I fear if something happens to me whether the corpus will be sufficient for my wife to survive in a respectable position? She already have rental income of Rs. 40K PM apart from 20K PM other income, Also my PF,Gratuity and NPS might be used for pay-off the O/s Loan. Now none of the Insurance company is accepting my policy. I dont want to go with keeping my wife in vulnerable Position. My only son is Studying abroad and not yet fully settled. I don't have any bad habit like smoking, Alcohol or any other. I have no clue how can I restore my position? I am very positive towards my life and other challenges in my life but recently My elder brother expired at 57 due to same illness So I m very much tensed. Can you guide me?

Ans: Hi Mr RN Mitra, sorry to hear about your condition, wish you good health and recovery.

As far as the top up plan is considered, given your age and pre-existing diseases, your risk profile is high and most insurers may not be able to offer Super top up plans.

The best option is to apply for a new base plan with a higher sum insured, however the premium will be on the higher side.

Ans: Regulating your meals at the right time will help a lot. Most important is Eat an early dinner by 6/6.30pm.
If you are taking medications twice a day have them at 12 hrly interval. Example 7 am and 7 pm. Continue with your lifestyle changes

Ans: Financial Overview
Current Status

You are single and retired.

No family or loan commitments.

Insurance Policies

Health insurance: Rs. 10 lakhs with Royal Sundaram.

Life insurance term plan: Rs. 50 lakhs.

Traditional insurance plans from LIC: Rs. 25 lakhs.

Annual insurance premium: Rs. 50,000.

Appreciating Your Efforts
You have a well-structured plan.

Health and life insurance cover your needs.

Insurance Review
Health Insurance

Your health insurance cover is Rs. 10 lakhs.

Consider increasing it to Rs. 20 lakhs.

This ensures better protection against rising medical costs.

Life Insurance

Your life cover is Rs. 50 lakhs.

Since you have no family commitments, this is sufficient.

Traditional Insurance Plans
Jeevan Tarang and Jeevan Amrut

These plans provide survival benefits.

Use these benefits to pay your annual premium.

Surrender Option

Consider surrendering these policies if needed.

The surrender value can be reinvested in mutual funds.

Investment Strategy
Mutual Funds

Actively managed funds can offer higher returns.

Consider SIPs in large-cap and balanced funds.

PPF and NPS

Continue with PPF and NPS investments.

They offer safety and tax benefits.

Disadvantages of Index Funds
Lower Returns

Index funds mimic the market.

They often yield lower returns compared to actively managed funds.

Lack of Flexibility

Index funds have less flexibility.

Actively managed funds adapt to market conditions.

Disadvantages of Direct Funds
Lack of Guidance

Direct funds lack professional advice.

Regular funds provide support through MFDs with CFP credentials.

Higher Risk

Direct funds can be riskier.

Professional guidance helps mitigate risks.

Emergency Fund
Maintain Liquidity

Keep an emergency fund.

Ensure it's equivalent to 6-12 months of expenses.

Liquid Mutual Funds

Consider liquid mutual funds for this purpose.

They offer better returns than savings accounts.

Action Plan
Increase Health Cover

Increase your health insurance to Rs. 20 lakhs.

Review Traditional Policies

Consider surrendering LIC policies.

Reinvest the proceeds in mutual funds.

Continue SIPs

Increase SIP contributions.

Focus on large-cap and balanced funds.

Maintain Emergency Fund

Keep a sufficient emergency fund.

Use liquid mutual funds for better returns.

Final Insights
Your current insurance and investment strategy is commendable.

Consider increasing your health cover for better protection.

Reevaluate traditional policies and focus on mutual funds.

Maintain an emergency fund for financial stability.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

Ans: Given your current financial situation and insurance coverage, here's a breakdown of your existing coverage and suggestions on whether you need to increase your sum assured or alter your policies:

Current Coverage:
Term Insurance: ?1.5 crore
Traditional Insurance: ?5 lakh
Medical Insurance: ?15 lakh
Analysis:
Term Insurance
Current Coverage: ?1.5 crore
Purpose: Term insurance primarily serves to provide financial security to your dependents in case of your untimely demise.
Current Situation: As you are single with no dependents or financial commitments, ?1.5 crore seems adequate for now. However, this amount should be reviewed periodically as your life circumstances change (e.g., marriage, children, significant asset purchases).
Traditional Insurance
Current Coverage: ?5 lakh
Purpose: Traditional insurance policies (endowment, whole life, etc.) combine insurance with a savings component. However, the insurance coverage is typically lower, and the returns are modest compared to other investment avenues.
Current Situation: ?5 lakh is quite low in terms of coverage, but since it’s a traditional policy, the primary goal might be savings rather than pure risk coverage. Given that you are a minimalist and have a substantial term insurance cover, this might suffice, though you could reconsider future contributions depending on the policy's returns and your financial goals.
Medical Insurance
Current Coverage: ?15 lakh
Purpose: Medical insurance covers hospital bills and other medical expenses.
Current Situation: ?15 lakh is generally sufficient for most medical emergencies in urban India. However, given the rising cost of healthcare, you might want to consider adding a super top-up policy to increase your coverage at a lower cost.
Recommendations:
Term Insurance
Maintain or Slightly Increase: Your current coverage of ?1.5 crore seems adequate, but if you foresee significant financial responsibilities in the future (like marriage or starting a family), you may consider increasing it slightly, say by another ?50 lakh to ?1 crore, to keep pace with inflation and future liabilities.
Traditional Insurance
Reevaluate: Traditional insurance policies are not typically the best for maximizing returns. If your primary goal is to save and grow your wealth, you might want to focus more on pure investment products (like mutual funds, PPF, etc.) rather than increasing contributions to traditional policies. Consider surrendering or converting this policy depending on its terms and the financial implications.
Medical Insurance
Consider a Top-Up Plan: While ?15 lakh should suffice for now, healthcare costs are rising rapidly. You might want to consider a top-up or super top-up plan that can provide additional coverage (e.g., ?10-15 lakh) for a relatively low premium, ensuring you are well-protected against major medical expenses.
Overall Premium Commitment:
Given that you are a minimalist and have no financial dependencies, you should focus on maintaining a balanced approach:

Avoid Over-Insuring: Since you currently have no dependents, over-insuring might lead to unnecessary premium outflow, which could otherwise be invested for growth.
Focus on Investments: With your minimalistic lifestyle, channeling more funds into savings and investments might provide better returns over the long term, enabling you to meet future goals like retirement or potential family responsibilities.

Your current insurance coverage seems adequate for your current situation. Consider a slight increase in term insurance, add a top-up to your health insurance, and reevaluate your traditional insurance policy. Focus on growing your wealth through investments rather than significantly increasing your insurance premiums at this stage. Regularly review your coverage as your life circumstances change.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in