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Name:Sumit (35), Ragini (34), Arav (3)
Resides in Saket, New Delhi
Profession: Senior Manager working with a multinational company
Net annual income
(Rs 11.76 lakh)
Status & goals
Sumit Sharma is senior manager working with a MNC in Gurgaon. He lives with his wife Ragini, a homemaker, and their 3 years young son Arav. The house he stays in was built by his father whom he lost two years ago in an accident. Acting on his own instincts and research, he has saved and accumulated decent assets so far. He wants to structure his personal finances as he is concerned about Arav's education and an early retirement for himself at 55. He also wants to review his existing insurance coverage.
Needed
A comprehensive financial plan securing child's education and an early retirement, along with adequate protection planning
Net monthly surplus
Rs 54,000
Current Investments:
Fixed Deposits : Rs 1,75,000
PPF : Rs 2,10,000
EPF : Rs 4,50,000
Equity Mutual Funds : Rs 3,20,000
Gold : Rs 3,50,000
Insurance(Surrender Value) : Rs 1,20,000
Findings
Emergency fund: Adequate emergency fund in the form of fixed deposits.
Life insurance: Total life coverage of R14 lakh with annual premium of R 55,000 towards five traditional policies.
Health Insurance: Company provided family floater of R3 lakh.
Investments: Exposure to debt and equity through own research and friend's advice.
Liabilities: Nil
Recommendations
Emergency fund: Amount in fixed deposits is sufficient to meet up to four months of expenses.
Express TIP: Salaried people need at least three months of emergency expenses as a cushion to face temporary uncertainties in life.
Life Insurance: Considering need based approach, Sunil needs life cover of R1.50 crore. He should take a term plan for 25 years which will cost him approximately R 15,000 per year. After taking the term plan, he should discontinue the existing policies and channelise the savings towards his financial goals.
... contd.
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