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Vivek

Vivek Lala  |301 Answers  |Ask -

Tax, MF Expert - Answered on Jul 22, 2023

Vivek Lala has been working as a tax planner since 2018. His expertise lies in making personalised tax budgets and tax forecasts for individuals. As a tax advisor, he takes pride in simplifying tax complications for his clients using simple, easy-to-understand language.
Lala cleared his chartered accountancy exam in 2018 and completed his articleship with Chaturvedi and Shah. ... more
RAJIV Question by RAJIV on Jun 29, 2023Hindi
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Hello sir, I need to purchase a term insurance. I'm a govt employee with annual income 10 lacs, whats important facts I have to check to select an insurance and what amount of sum assured I have to insured.

Ans: There are certain factors to look at while choosing a company for term insurance as the company has to stay for 100yrs from today to give you benefit of your insurance.
You should look at the customer service history, solvency ratio, claim settlement ratio, etc
Term insurance cover should be decided on factors like your family's monthly expenses as in how much they would require every month to survive, your liabilities and your current liquid assets.
A person can get up to 30times of their salary depending on their age
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  |7548 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Aug 14, 2024

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Dear Sir, I am Praveen, a 36-year-old professional working in the private sector from Bangalore. I would like to purchase a 1 crore term insurance policy. Could you please inform me about the essential aspects that need to be covered and recommend which policy to buy?
Ans: Dear Praveen,

It’s great that you’re considering term insurance. A term insurance policy is essential for ensuring your family’s financial security. Let’s explore the key aspects you need to consider before purchasing a Rs. 1 crore term insurance policy.

Coverage Amount: Ensuring Adequate Protection
Choosing the Right Sum Assured: A Rs. 1 crore policy is a good starting point. However, assess your family’s future financial needs, including living expenses, loans, and your children’s education. This ensures that the coverage amount is adequate.

Inflation Impact: Consider inflation. Over time, the value of Rs. 1 crore may decrease. Ensure that the coverage amount is sufficient to meet future needs.

Income Replacement: Your term insurance should replace your income for at least 10-15 years. This will help your family maintain their current lifestyle without financial strain.

Policy Term: Matching Your Financial Goals
Align with Retirement Age: Ideally, your policy term should last until your retirement age, around 60-65 years. This ensures that your family is protected during your working years.

Long-Term Commitment: Choose a policy with a term that matches your financial goals. This ensures that your family is covered until your major financial responsibilities are fulfilled.

Premiums: Balancing Cost and Coverage
Affordable Premiums: While a higher sum assured provides better coverage, ensure that the premiums are affordable. Your premiums should not strain your current finances.

Premium Payment Options: Some policies offer flexible premium payment options, such as monthly, quarterly, or yearly payments. Choose the one that best fits your financial planning.

Fixed Premiums: Opt for a policy with fixed premiums throughout the term. This ensures that your payments remain consistent and predictable.

Riders: Enhancing Your Coverage
Accidental Death Benefit: Consider adding an accidental death benefit rider. This provides an additional payout if death occurs due to an accident.

Critical Illness Cover: A critical illness rider covers life-threatening diseases like cancer or heart attacks. It provides a lump sum payout on diagnosis, which can help with medical expenses.

Waiver of Premium: This rider ensures that your policy remains active even if you are unable to pay premiums due to disability or illness.

Income Benefit Rider: This rider provides a regular income to your family in addition to the sum assured. This can be crucial for meeting monthly expenses.

Claim Settlement Ratio: Ensuring Reliable Protection
High Claim Settlement Ratio: Choose an insurer with a high claim settlement ratio. This indicates the insurer’s reliability in paying out claims.

Transparent Process: Ensure that the insurer has a transparent and straightforward claim process. Your family should not face any difficulties when filing a claim.

Customer Reviews: Read customer reviews and testimonials. This gives you insight into the insurer’s service quality and claim processing efficiency.

Policy Terms and Conditions: Understanding the Fine Print
Exclusions: Understand the policy’s exclusions. Certain situations, like suicide within the first year, may not be covered.

Grace Period: Check the grace period for premium payments. This is the time allowed to pay overdue premiums without policy lapse.

Lapse and Revival: Know the process for reviving a lapsed policy. Some insurers allow you to revive your policy within a certain period.

Benefits of Buying Through a Certified Financial Planner
Expert Guidance: A Certified Financial Planner (CFP) provides expert guidance. They help you choose the best policy based on your financial goals and needs.

Customized Advice: A CFP can offer personalized advice, ensuring that your policy aligns with your overall financial plan.

Continued Support: Your relationship with a CFP doesn’t end after buying the policy. They offer continued support and advice throughout the policy term.

Final Insights
Praveen, purchasing a term insurance policy is a crucial step in safeguarding your family’s financial future. By considering factors like coverage amount, policy term, and riders, you can choose a policy that meets your needs. Also, working with a Certified Financial Planner ensures that you make an informed decision. Remember, term insurance is about more than just coverage—it's about providing peace of mind and security for your loved ones.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

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Then doctor asked her why she stopped and what I said, my wife said that he is asking for female staff and doctor said “I am a doctor and I am not having female staff and there is nothing male and female in doctor’s consultation” my wife got convinced and told me that we are continuing with this doctor and I also shaked my head as consent sign but not aware with the upcoming surprise and then she open her upper body part and doctor did the check up by pressing or whatever doctor does. And I was not ready for this So, I am still in trauma due to this, but I don’t want her to show her body to any male doctor. That picture comes again and again in my eyes. I don’t want to break my relation with wife, because we married 20 years before and we have 2 daughter and I love her too much. But she has disobeyed me and obeyed that doctor. I am in a trauma. What should I do to come out of this trauma. Please let me know.
Ans: To address your trauma, start by having an open and honest conversation with your wife about your feelings. Express your emotions calmly, without blame, so she can understand the depth of your discomfort and help you work through it. It's also crucial to recognize that trust and mutual respect are fundamental in any relationship. Your wife’s decision was likely driven by her need for medical care, not a desire to hurt or disobey you.

Consider seeking professional help for yourself. A therapist or counselor can provide a safe space for you to explore these feelings, work through the trauma, and develop strategies to cope with intrusive thoughts. They can also help you understand the importance of medical privacy and the necessity of certain procedures, which may ease your discomfort over time.

Additionally, you might want to explore couples counseling. This can help both of you navigate this situation together, rebuild trust, and strengthen your relationship. Remember, your goal is to maintain a loving and supportive partnership, and professional guidance can be instrumental in achieving that.

Your love for your wife and your desire to keep the relationship strong is evident. By addressing these feelings head-on and seeking support, you can move towards healing and maintaining the bond you cherish.

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Ramalingam

Ramalingam Kalirajan  |7548 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jan 17, 2025

Asked by Anonymous - Jan 17, 2025Hindi
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I'm 35 years old. I want to invest INR 65000 for retirement at 50 years old. My current expenses 65000 per month. Please guide me.
Ans: Retiring at 50 with your current lifestyle requires a carefully crafted investment strategy. Here’s a detailed guide tailored to your goal.

Step 1: Define Retirement Corpus Requirement
Current Monthly Expenses: Rs. 65,000.
Inflation Adjustment: At 6% inflation, your expenses will increase significantly by 50.
Retirement Corpus: The corpus must sustain you for at least 30+ years post-retirement.
Lifestyle Goals: Include travel, medical emergencies, and aspirational expenses in calculations.
Step 2: Asset Allocation Strategy
A balanced mix of equity and debt instruments can help grow your wealth steadily while minimizing risks.

1. Equity Mutual Funds (70% Allocation)
Why Equity? High growth potential to beat inflation over the long term.
Recommended Categories: Flexi-cap, mid-cap, and large-cap funds.
SIP/Investable Amount: Invest Rs. 45,500 monthly in equity mutual funds.
2. Debt Instruments (30% Allocation)
Why Debt? Stability and regular income during volatile markets.
Recommended Options: PPF, short-term debt mutual funds, or NPS (Tier I).
SIP/Investable Amount: Allocate Rs. 19,500 monthly.
Step 3: Include Inflation Protection
Inflation reduces the value of money significantly over time.
Your retirement corpus should grow faster than the inflation rate.
Equity exposure helps overcome inflation impacts effectively.
Step 4: Ensure Tax Efficiency
1. Equity Mutual Funds
Tax Rules: Long-term capital gains (LTCG) above Rs. 1.25 lakh taxed at 12.5%.
Action Plan: Use annual redemption to manage gains below taxable limits.
2. PPF and NPS
Tax Benefits: Both offer tax-saving benefits under Section 80C.
Lock-in Period: Ensure alignment with your retirement timeline.
Step 5: Emergency Fund Creation
Build an emergency fund equivalent to 12 months’ expenses (Rs. 7.8 lakh).
Park it in liquid funds or a high-yield savings account for quick access.
Step 6: Health and Risk Coverage
Health Insurance: Ensure adequate coverage to avoid depleting investments during medical emergencies.
Life Insurance: Use a term plan to secure your dependents until you achieve your retirement goal.
Step 7: Regular Portfolio Reviews
Review your portfolio every six months.
Rebalance based on performance, changing goals, and market conditions.
Seek advice from a Certified Financial Planner for optimized asset allocation.
Step 8: Additional Recommendations
Avoid Real Estate: Illiquid and high transaction costs make it unsuitable for your timeline.
Avoid Direct Investments: Opt for regular plans via mutual fund distributors guided by a CFP.
Diversify Investments: Explore international mutual funds for added growth.
Step 9: Incremental Contributions
Increase your SIP amount annually by 10-15% to align with income growth.
This ensures your corpus grows significantly over time.
Finally
Achieving financial independence by 50 is ambitious but achievable. Consistency in investments, inflation-adjusted growth, and regular reviews are critical. Focus on disciplined execution of the outlined plan for a secure and fulfilling retirement.

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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