Financial planning:

POSTED BY Sunny V ON January 16, 2012 11:40 am COMMENTS (17)

Hello,
I seek your help to decide my confusion regarding Life Insurance of my parents..
Age:
Father: 51
Mother: 51
1st option:
Should i opt Jeevan Anand for term of 24 (as max term is 75 at maturity) with sum insured of 1500000 (combination of both or 10 lacs individual), if yes then the premium comes around 85000 for 15 lacs SI for 24 term.
Problem: I dont afford to pay that much of premium.
2nd Option:
Should I take term plan of SI 15 lacs from ICICI icare with a premium of 15000* and should plan for other things like investing in monthly recurring, ppf, gud mutual funds..
Reason to opt option 2: I want the same value at the time of maturity if the person survives and opted for jeevan anand because Bonus payable in jeevan anand as per latest table is Rs 47/1000 SI.
So will i be succeed to get fund value of around 25 lacs when my father will be at 75 age (having insurance covered too of rs 15 lacs till 75)? If yes, then how….is option 1 or 2 or any other option from your side..
Please guide me confusion.

Sunny

17 replies on this article “Financial planning:”

  1. Dear Sunny, from your own replies – You are already earning. Sister’s marriage ‘ll be over within next 6-12 months. Where is the need to have an insurance for your father.

    By the way, can you explain the logic of getting insurance for your mother as she is a housewife.

    Thanks

    Ashal

  2. Sunny V says:

    Hi Ashal,

    1. Age to retirement of your father-around 60
    2. current income of your father mly or yly – 5 lacs p.a.
    3. No of sisters to be married & if possible age of each & time frame to marry each – 1, time:within 6 months
    4. Mother is a house wife or working lady- house wife
    5. If working lady, her mly or yly income-NA
    6. In case of insurance for your parents, who ‘ll pay the prem. your parents or you: parents till he retired then me.
    7. Your own mly or yly income & saving potential on mly basis. 4 lacs, savings: hardly around 10k.

  3. Dear Sunny, in case you feel my question are too personal to answer & you do not want to answer on open forum, you may post these answers in a mail to me.

    Thanks

    Ashal

  4. Dear Sunny, few more questions (Please forgive me, if you feel I’m irritating you) –

    1. Age to retirement of your father
    2. current income of your father mly or yly
    3. No of sisters to be married & if possible age of each & time frame to marry each
    4. Mother is a house wife or working lady
    5. If working lady, her mly or yly income
    6. In case of insurance for your parents, who ‘ll pay the prem. your parents or you
    7. Your own mly or yly income & saving potential on mly basis

    Thanks

    Ashal

  5. Sunny V says:

    I think the comparison table is not pulling properly.

    Below is in more precise and in explanatory manner..

    LIC Jeevan Anand
    Term- 24
    SI – 15 Lacs
    Premium: 85000 approx
    Maturity: 15 lacs + bonus
    Savings: NA

    My method (term plan):
    Term- 24
    SI – 15 Lacs
    Premium: 15000
    Maturity: Nil
    Savings: 700000
    Investment (orthodox): Little bit in PPF
    Bit in post monthly reccuring
    Bit in good mutual funds..

    Thanks,
    Sunny

    1. Hi sunny,
      Its simple , if you go with jeevan anand then you will be in a position to pay 85k per year as per ur calculation and they will be investing your money in some place and mostly it can be dept instruments ., if its in stocks then u have to bear the risk and u can’t change the way its invested also.
      My suggestion will be to go for a term and then invest rest in whichever way u want .

      regards,
      Sri

  6. Dear Sunny, Do you ask your vehicle insurer, “Return kitna milega?”

    If your Car insurance policy is not returning you a single penny after a year, are you happy or sad?

    Please share.

    Thanks

    Ashal

    1. Sunny V says:

      Ashal,

      Your bottom line to speak out is…that i should quickly go for some good insurance plan for my parents…right?

      The reason i put this question in this forum is just to ask the opinion whether should i go for LIC Jeevan anand who strealine my bucks in their own way of investment or should i opt for my own made option i.e. term plan (max 20) for my parents + remainder in investment, also why i wanted to go for my own made plan because the current scenario of my financial strength is bit low due to marriages of my sis and other commitments like home loan and home expenses so thats why i was thinking to go for term plan and will invest in remainder in some fixed interest providing instruments like PPF or post recurrings and all..

      LIC Jeevan Anand My method (term plan)
      SI 15 lacs 15 lacs
      Term 24 24
      Premium 85000 approx 15000
      Maturity 15 lacs + bonus nothing
      Savings NA 70000
      Investment (orthodox ) – Little bit in PPF
      Bit in monthly recurring
      Bit in mutual funds

      Please share your supporting words..

      Sunny

  7. Sunny V says:

    Ashal,

    Thanks for your response.

    With ref to your question, yes we own a car (i10), and also my father is not dependant on me, he has its own business that fetches income around 6 lacs p.a, so he is pretty good in earnings than me, on the other side i am also working….

    Also could you guide me that the other pure investment instrument would be…???

    Sunny

    1. Hi sunny,

      Ashal’s point is simple , don’t think in such a way that only your father/mother need to be insured , its you also . Better go for a term plan where u don have to pay such a huge amount
      for insuring.Yesterday i bought icare 1 for me SA – 25L and premium per year is 4k for 30 year term .Its better to go for something like that .check for “term plan” in the company u want .Even 15K is higher for 10 – 15L SA which u have stated above if ur parents don have any physical health issue.

      Also take a health insurance , please don think like am young to put money in this as this is one of the big investment which people are not understanding.Itwill save lakh and lakh of ur money 🙂

      Regards,
      Sri

  8. Dear Sri, My take ‘ll be to opt a pure vanilla Term plan & invest his hard earned money in other pure investment instruments.

    Thanks

    Ashal

  9. Dear Sunny, so from your query, I assume you ‘ll purchase the umbrella when it’s raining & not now as there is no chance of raining in near future.

    Please try to understand the logic of insurance.

    Do you own or your father own a Car?

    Please share.

    Thanks

    Ashal

    1. Hi ashal,

      Well said ., Even am 23 and am planning to get a good one for me 🙂

      My question is “Do you want him to go for a pure term insurance or an endowment/money back considering the high premium which he can’t afford?”

      @sunny Please think of taking life cover for you also ., Because your parents are more dependent on you

      Regards,
      Sri

  10. srivatsan ganesh says:

    Hi sunny,

    My suggestion will be to go for a pure term insurance instead of an endowment plan or moneyback plan 🙂

    Be clear with what you want , if u want insurance for your parents then go for a term insurance from icici or lic or whichever company which has high claim settlement ratio.

    Don t link insurance with investment , no insurance companies will give you a huge amount as interest for your money.Insurance is just to reduce your financial burden during tough times 🙁

    So better take a good plan and invest your remainin money in FD , stocks/MF ,ppf ..etc

    Regards,
    Sri

    1. Sunny V says:

      Hi Sri,

      thanks for your guidance, so u mean to say, I’ll term plan for my father (say e.g.) which will cost me around 15000 and the remainder i invest in other investment (bit safe one) like PPF, post monthly recurring, good mutual funds…

      I hope i understand your answer in the same manner as i depicted above..

      Sunny

  11. Sunny V says:

    Hi Ashal,

    thnx for your reply…nice questn…I can say that i even wanted to insured myself but my age asof now is 23 so i have time to think for my cover too but i am more concern about my father and mother as per their age..

    Sunny

  12. Dear sunny, may I know the reason of covering your father or mother or both at their current age & not you?

    Thanks

    Ashal

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