Express Clinic

Name:Arun Gupta (32) and Teena Gupta (31)

Reside in delhi

Profession: Software Engineer

Annual income

(R9.6 lakh)

Status & goals

Arun is the sole earning member in a family of three — self, spouse and son. At present, he and his family stay with his parents in Delhi. His parents are not financially dependent on him. He wants to plan for his son's graduation and post-graduation, and also for his retirement. He wants a systematic financial plan to avoid any pitfalls in the future.

Needed

A financial roadmap which can help them maintain a smooth married life, better future for their children and a secure retirement.

Net monthly surplus

Rs 36,500

Current Investments:

EPF: Rs 3.50 lakh

Bank FD: Rs 1.50 lakh

Bank RD: Rs 1.50 lakh

Corporate Debenture: Rs 1 lakh

Postal MIS: Rs 1.50 lakh

Liquid MF: Rs 5 lakh

Equity MF: Rs 9.12 lakh

Gold Fund: Rs 1.50 lakh

FINDINGS

Emergency fund: Arun has maintained an emergency fund equal to 6 months' expenses.

LIFE INSURANCE: Arun is not adequately covered for life insurance.

HEALTH INSURANCE: He and his family are not fully covered for health insurance.

INVESTMENTS: He has started early by investing in equity via SIPs which will give him benefit of power of compounding.

PROVIDENT FUND: He has a good employee providend fund balance.

RECOMMENDATIONS

EMERGENCY FUND: Arun needs to keep his bank FD and Rs 1.75 lakh of liquid MF aside and maintain it as an emergency fund.

Express tip: Emergency fund carries utmost importance and helps in managing contingencies like job loss or disability.

LIFE INSURANCE: As per need-based analysis, Arun should be having an insurance coverage of at least Rs1.50 crore life cover. He has bought two offline term insurance plans in his name. He is advised to surrender these plans as the both the plans are offline plans and are expensive compared to online plan. It is advisable to buy Rs 1.50 crore sum assured life cover through online term plans, which is least expensive. It will cost around Rs 13,000 p.a. It is advisable to disclose all the facts correctly while applying for the fresh insurance.

... contd.

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