Should I change my mutual funds after increasing term insurance and health insurance?

Ans: You've done a commendable job in setting up a diverse investment portfolio and securing insurance coverage. Let's evaluate your current strategy and suggest improvements.

Provident Fund and Insurance
Your provident fund balance of Rs. 70 lakhs and a monthly contribution of Rs. 40,000 is a strong foundation for retirement. Your insurance coverage of Rs. 2 crore from HDFC and an additional Rs. 1.25 crore from your organisation ensures financial security for your family.

However, evaluating the insurance cover every few years is advisable to ensure it remains adequate as your financial responsibilities grow.

Mutual Funds
Your six mutual funds with a monthly subscription of Rs. 10,000 each and a present value of Rs. 23 lakhs are diversified across different categories.

This is a balanced approach, but it's essential to review the performance of each fund annually. Underperforming funds should be replaced with better-performing ones to maximize returns.

Sukanya Samridhi Yojna
Investing in Sukanya Samridhi Yojna for your two eldest children is a smart move. The Rs. 12,500 monthly contribution ensures a secure future for your daughters.

This scheme provides tax benefits and a high interest rate, making it an excellent long-term investment for your children's education and marriage.

Investment Plans
The "Promise for Growth Care" and "Goal Assure II" plans offer insurance and investment benefits. However, these plans often come with high costs and lower returns compared to mutual funds.

Consider surrendering these policies and redirecting the funds to better-performing mutual funds or other investment avenues. This approach can provide higher returns and better liquidity.

Cash in Hand and Sovereign Gold Bonds
Holding Rs. 25 lakhs in cash is a good safety net. Planning to invest Rs. 20 lakhs in Sovereign Gold Bonds is a sound decision. Gold is a hedge against inflation and adds diversification to your portfolio.

However, ensure that you maintain an emergency fund equivalent to at least six months of your expenses before making this investment.

Retirement Planning
You plan to retire at 56, which gives you 20 years to build your retirement corpus. Your current investments in provident funds, mutual funds, and insurance plans are a solid start.

Regularly reviewing and adjusting your portfolio can help you stay on track to achieve your retirement goals.

Increasing Mutual Fund Contributions
Consider increasing your mutual fund contributions as your salary grows. This will help you build a more substantial corpus over time.

Systematic Investment Plans (SIPs) are an excellent way to invest in mutual funds, providing the benefits of rupee cost averaging and compounding.

Diversifying Investments
While your current investments are well-diversified, consider adding more asset classes to your portfolio. Equity-linked savings schemes (ELSS), debt funds, and balanced advantage funds can provide better risk-adjusted returns.

Tax Planning
Utilize tax-saving instruments like ELSS, Public Provident Fund (PPF), and National Pension System (NPS) to maximize your tax benefits.

These investments not only provide tax deductions under Section 80C but also offer good returns and long-term benefits.

Children's Education and Marriage
Planning for your children's higher education and marriage requires substantial funds. The Sukanya Samridhi Yojna and your mutual fund investments are excellent steps towards this goal.

Education Planning
Estimate the future costs of education considering inflation. Invest in a mix of equity and debt instruments to build a corpus that can meet these expenses.

Marriage Planning
For your children’s marriage, consider long-term investments that provide safety and growth. Fixed deposits, recurring deposits, and balanced funds can be good options.

Reviewing and Rebalancing
Regularly reviewing and rebalancing your portfolio is crucial to ensure it aligns with your goals. Market conditions, financial responsibilities, and life stages change over time.

Annual Review
Conduct an annual review of your investments. Evaluate the performance of your mutual funds, insurance policies, and other investments.

Rebalance your portfolio to maintain the desired asset allocation and risk level.

Financial Advisor Consultation
Engage with a certified financial planner for professional advice. They can provide personalized recommendations and help you navigate complex financial decisions.


I understand the responsibilities of planning for your children's future while securing your retirement. Your commitment to financial planning is admirable.

Balancing short-term needs with long-term goals can be challenging, but your disciplined approach will yield positive results.

Final Insights
You've laid a strong foundation for your financial future. By making a few strategic adjustments and regularly reviewing your portfolio, you can ensure that your investments align with your goals.

Stay committed to your financial plan, and you will achieve your objectives of securing your children's future and enjoying a comfortable retirement.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Considering your age I would recommend you to avoid pure equity and thematic funds due to volatility & high risk and shift to following fund types(one example of each type is mentioned based on 5 year returns):

Arbitrage fund: Kotak Equity Arbitrage Fund
Conservative hybrid debt fund: SBI Conservative hybrid fund
Equity Savings fund: Mirae Asset Equity Savings fund
Liquid Fund: ICICI Pru Liquid fund(6M return criteria)
Gilt fund: DSP Gilt Fund

The risks in these funds range from Low to moderately high.

*Investments in mutual funds are subject to market risks. Please read all scheme related documents carefully before investing

You may follow us on X at @mars_invest for updates

Happy Investing!!

Ans: LIC Policies:
LIC plans typically offer lower returns compared to mutual funds. You may consider redirecting future premiums toward mutual funds or term plans for better returns.

Term Plan & Health Insurance:
Your term plan and health coverage are strong. Given your daughter’s situation, continuing with Star Health is wise, as the government scheme may have limitations.

Mutual Fund Portfolio:
Your current investments are well-diversified. You could add a mid-cap fund for balanced growth. Consult a Certified Financial Planner (CFP) for personalized advice.

Best regards,
K. Ramalingam, MBA, CFP
Chief Financial Planner,

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

Ans: Your Financial Goals

Retirement fund target: Rs 4 Crores

Child’s education fund target: Rs 2 Crores

You have not mentioned the time horizon for both.

For now, we will assume:

Retirement goal – 15 to 20 years away

Education goal – around 10 to 12 years away

These are long-term goals and require consistent and strategic equity exposure.

Current SIP Portfolio Review

Let’s assess your current monthly SIP of Rs 25,000:

Mirae Asset Large & Midcap – Rs 2,000
This category balances stability and growth. Keep allocation minimal.

Mirae Asset ELSS – Rs 4,000
ELSS funds have 3-year lock-in. Useful only if you need tax benefit.
Avoid more than one ELSS fund.

ICICI Equity & Debt Fund – Rs 4,000
Hybrid funds reduce volatility. But not ideal for aggressive long-term growth.

Canara Robeco ELSS – Rs 4,000
You already have one ELSS. Two ELSS schemes dilute focus.

Canara Robeco Large Cap – Rs 2,000
Large caps give stability. Allocation is fine.

Quant Active – Rs 5,000
High-risk, high-return style. Can keep limited exposure.

Parag Parikh Flexi Cap – Rs 2,000
Well-managed diversified fund. Suitable for long-term.

Key Observations and Suggestions

Too Many Funds
Seven funds for Rs 25,000 monthly is excessive.
It spreads your money too thin.
Each fund needs minimum size to show results.

Duplicate Categories
Two ELSS funds. Avoid duplication.
If tax saving is not your aim, ELSS is unnecessary.

Overuse of Direct Funds
Direct funds may look cheaper.
But they offer no human support during market crashes.
Investors make emotional exits at wrong times.
Regular funds via Certified Financial Planner and MFD provide personalised support.
Direct fund route is risky for goal-based investing without expert review.

Avoid Index or ETF Investing
Index funds just copy the index.
They cannot outperform.
During correction phases, they fall more and recover slower.
Active funds are better. Fund managers can protect and grow your money.
ETFs are just index funds traded like shares.
They offer no advisory support and involve price volatility.

Recommended Portfolio Restructure

Here is a simplified suggestion:

One Flexicap Fund (for core long-term growth)

One Midcap Fund (for long-term wealth creation)

One Hybrid Aggressive Fund (to reduce volatility in short-term)

Optional: One ELSS Fund (only if you need Sec 80C deduction)

This way, you manage risk and get better returns with less complexity.

How to Allocate Your SIPs Wisely

Flexicap Fund – Rs 10,000

Midcap Fund – Rs 7,000

Hybrid Aggressive Fund – Rs 5,000

ELSS Fund – Rs 3,000 (only if required for tax)

This structure gives direction, clarity and growth focus.

Review Your Fund Performance Periodically

Don’t judge a fund by 1-year returns

See rolling performance across 3, 5 and 7 years

Check fund house stability, manager consistency

Avoid switching funds too frequently

Are Your SIPs Enough for Your Goals?

For Rs 2 Cr education fund in 12 years, you need focused allocation

For Rs 4 Cr retirement in 20 years, SIPs need to grow gradually

Current SIP of Rs 25,000/month may not be enough for both

You may need to increase it by 10% every year

As income grows, increase SIPs. Also do lumpsum whenever possible.
Track the gap between required and actual corpus annually.

Secure Your Child’s Future Better

You already have SIPs and term insurance.

Add a dedicated child fund (not child ULIP or plan from insurer)

Choose pure mutual funds.

Invest regularly. Track goals yearly.

Avoid gold ETF for child’s future. It doesn’t match education cost inflation.

About Your Term Insurance

You didn’t mention coverage amount

For Rs 6 Cr of goals, ideal cover is 12 to 15 times your income

Keep your term cover separate from investment

Review the policy every 3 to 5 years

Final Insights

Restructure funds. Avoid duplication and unnecessary direct funds

Use actively managed regular funds via CFP and MFD

Build child’s education corpus with discipline

Retirement corpus target is realistic. Increase SIPs gradually

Track fund performance every 6 months.

Do not mix insurance with investment.

Avoid ETF and Index Funds for wealth building

Maintain asset allocation. Review annually

Keep emergency fund in liquid fund or short-term plan

What You Can Do Next

Consolidate your funds

Consult a Certified Financial Planner to create a personalised goal tracker

Shift to a guided MFD platform that gives you regular review

Reinvest ELSS redemption amount after 3 years in the new structure

Ensure you have health insurance too – not mentioned above

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

Ans: Dear Sir,

Thanks for sharing detailed inputs. You’re doing many things right already ???? but there are some important points to tighten.

???? Retirement Outlook

With just 7 years left (till 2032), your focus should be on maximising corpus build-up.

Today’s expenses (~?40k) will inflate to ~?70k/month by 2032 (assuming 6% inflation). For 20–25 years of retirement, you’ll need ~?4–5 Cr.

???? Observations

Investments are well structured – Your CAGR of 14–21% shows good fund choices and rebalancing is broadly correct.

Loans are eating into cashflow – Multiple small loans (car ?5L, edu ?6.24L, small home loan ?6.5L) can be closed faster.

Expenses not fully mapped – Retirement planning starts with exact expense tracking; do this first.

Insurance cover is decent – Term insurance is strong, family floater is good.

? Action Plan

Close Small Loans First

Knock off car loan, education loan, and small home loan.

Redirect these EMIs fully into SIPs for retirement.

Continue MF SIPs & Rebalancing

The switch your advisor did is fine. Returns are healthy, stick with equity-heavy allocation for next 5 years.

From 2028, start moving some gains systematically into safer debt funds.

Health Insurance Top-up

Your current ?10L personal + ?6L office is good, but medical inflation is high.

Take a Top-up health cover of ?25–50L (very cost-effective) to avoid dipping into retirement corpus for future medical needs.

NPS & PF

Continue PF + NPS contributions. They’ll add stability to your retirement kitty.

???? Summary

Returns & fund choices ?

Need to close small loans and channel EMIs into SIPs ?

Take a top-up health insurance cover to safeguard corpus ?

Expenses tracking must be priority to validate adequacy ?

You’re well placed, just sharpen the cashflow redirection and insurance shield.

Best regards,
Naveenn Kummar, BE, MBA, QPFP
Chief Financial Planner | AMFI Registered MFD
www.alenova.in