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POSTED BY ON August 1, 2011 4:53 pm COMMENTS (15)
Hi Sir,
I happened to stumble upon this site and had read many blogs of Manish till late night 4.A.M.
This site should be \”bookmarked\” by one and all as i see the discussions on this forum really enlightening and honest.
I need some advice on the insurance & investment front.Here are the details:
1) My current age is 35 (born 6.6.1976).
2) My current take home is 60 K/month.Working as Software consultant in an MNC.
3) My wife is home maker and we are blessed with Baby girl 3 months back.I have dependents as my parents (retired Central Govt. employee, but all day to day expenses borne by me only).
4) My monthly expenses I round it close to 30K (including Home Loan EMI 13K).
5)As a liability I have Home loan for 16 Lakhs (from 2004).
6)Current holdings: Jeevan mitra(Triple cover):Rs.6000 p.a., Jeevan Sree:25K p.a. holding from 2002. Also ICICI Life time Pension(2005): 10K p.a.
7) Mutual Funds: Reliance Growth Fund(2007): 2K /month. Sundaram Midcap(2007):2K/month
I need your expert advice on what to invest. I do see my Life cover is too less (coming around 13 Lakh as of today). I need your advice ,
a)how much I should cover further. Also suggest which policy (LIC how much n others how much).As I see \”Raiders\” do mount for more Premium, advice if at all they are required, if Yes, suggest any Pvt company.
b) I have been \’haunted\’ by agents suggesting Jeevan Saral (claiming life cover + investment opportunity), Child Plans (Smart KID ICICI, Birla Dream child, Jeevan Komal -LIC), since 2 weeks.
c)I would need your advice on, if i need to continue S.I.Ps on afore mentioned schemes(I realized No SIP is gng on since last December, I must give renewal request I guess).
Sundaram Midcap (for 4 years) show current market value as : 1.5L. Reliance Growth Fund(3 years as no SIP after 12/09): Current market value 1 L.
Also suggest any new MF plans for long term objectives with an liquidity option open(which is there in Mfs always).
D) I would need your advice on Gold ETF as well.
Thanks in advance. It will of great help as I have been meeting so called Finance advisors since 2 weeks but everyone is taking out some \”Magic Plan\” from LIC or Child Plans with Premium waivers in case of risk.
Iam more interested to take Term Policy + Investments in some Growth schemes, which in turn benefit my family with child future in mind.
Regards,
Kiran
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@Srivy
congrats.
Regarding your particular issue, call/email the ICICI insurance helpline, and confirm with them.
http://www.iciciprulife.com/public/Others/Call_Us.htm
In my view, if you give that information, it is not going to change anything. The amount of cover is important, which your other policies do not provide much in amount.
But the best thing will be to confirm directly with them. Email will be a better option too, since you will then have a written correspondence.
Hope this helps you.
Ramesh
Thanks Ramesh for your timely response.I have put a mail with the current Policy details as suggested.
Have a good day!
Please, do communicate the response here. So that others may also benefit from it.
Thanks,
Ramesh
Hi Ramesh,
– Just wanted to update over the Term insurances i have applied. The medical test are completed for both LIC- Amulya Jeevan (Rs.25 Lac SA) and for ICICI- iProtect (SA Rs.50 lac) last week.
– Today I received iProtect Policy certificate through email.But I am yet to get any update on LIC policy which I took on the same date (8th Aug).
– The experience with the ICICI has been fairly good, except a minor glitch, it took a week to include the existing policies information and also their Customer Care guys don’t have latest information on the Policy status (they replied the status as “initial” and no documents received, though I have sent the relevant proof documents and completed medical test).
– So effectively it took around 18 days to get the policy.
– I guess they will send be hard copy of the Policy certificate right? Or soft copy can be considered as Original Certificate?
– Regarding the delay in LIC policy., may be the agent is taking his own sweet time as I didn’t take any of his ‘magic plans’, ulips, sarals..Have to give a call to remind him.
– Thanks for being a tremendous help in deciding the ‘investment’ & ‘insurance’ planning.
– I have the second half of the planning to be implemented i.e. investment. I have called up Sharekhan ppl as I have demat a/c with them.I would like to purchase MFs from them to keep equities and MFs at one place.It seems they are not charging anything for the services of MF.
Thx again,
Kiran
Thanks for giving an update.
good luck for the rest.
Ramesh
Hello Ramesh, I am back to trouble you. Btw, I received the Hard copy Policy Certificate for the ICICI-iProtect today. Now I am moving into the “Investment” planning as I am done with “Insurance”.
1)I happened to walk into Bajaj Capital y’day and I met a guy there. He has shortlisted few of the Tops MFs and he was saying, no charges are levied for the transaction with them and even my existing MFs can be brought under their Service.They do provide assistance to open PPF (post office) with online payment facility.
He suggested following MFs
a) HDFC Top 200 (SIP:Rs.2K)
b) ICICI Focus Bluechip (SIP:Rs.2K)
c) Reliance Gold Savings Fund(SIP:Rs.1K)
Can you suggest me on:
-If I can go with HDFC Top 200 or HDFC Equity has upper hand (as I hear investing in Large cap is better than in Midcap during this volatile time)?
-What abt ICICI Bluechip as my second SIP? and
-Regarding Gold ETF is the above fund OK for Gold(it is a Fund on Fund) ?Can you suggest any other way of investing in Gold, which you deem as best?I read somewhere “e-gold” from NSEL.No idea how to go abt.
-Also it helps if you comment on the Bajaj Capital services.I have already a Demat account with Sharekhan and MFs can be transacted with them with no cost. Advice who can be more trusted?
Also let me know if Sharekhan provides online Redemption facility (Bajaj guys dont provide).
Thanks for your time!
Ok. Lets take things one by one.
1. Few of the Top MFs. You have to understand that the top MF category is a very dynamic category (like top gainers on any given day in BSE). The only thing constant about them is that they change. So, todays Top are tomorrow’s less than Tops. Any long-term fund with 4/5 stars is good enough, emphasis is on long-term.
2. I have mentioned a few funds above. All of them are multi-cap or flexi-cap funds, with a large-cap bias, except HDFC Prudence (which is an equity-oriented balanced fund). You can add any two of them to your portfolio in addition to your other funds. Reliance Growth started as a mid-cap fund, but because of large corpus, has got a large-cap orientation nowadays (change of mandate/fund functioning –> either consider the changed mandate or remove it). Sundaram select midcap remains midcap and is fine.
3. My suggestion for maximum flexibility, and relative inconvenience, open two MF and get online access of both of them (I personally have used hdfc,templeton,birla sunlife, reliance, SBI and all of them are very good). Quantum amc also gives direct access.
4. HDFC Top 200 is like a limited HDFC Equity. I would always prefer the latter.
5. Define market volatility. In absolute terms, volatility is both up and down. So, it is upto you to decide, whether you want to limit both upside and downside (generalization for large-cap).
6. ICICI focused Bluechip. I would not recommend a very focused top 20 fund. Better to go with an index fund instead.
7. For long term, I would not suggest gold in any form. If you still want to have it consider the discussion in http://localhost/jagoforum2/gold-etf-versus-physical-gold-expense-ratio-is-hurting/1919/
8. I dont have any experience of Sharekhan. So cannot comment there too. (get online access, and you would be free!).
Ramesh
Hi Ramesh, Hope you are doing fine. And thanks for the detailed information on various investment options through MF.Regarding Gold EMFs, yes I read the article you have mentioned before I put the mail to you earlier.I personally don’t consider Gold as investment vehicle and I always feel like we lock the money in the form of gold, unless we have will-power to detach ourselves and sell it in market.But all these calculations/logic doesn’t go well with Ladies at home.So may have to buy gold to quench the thirst of ladies, from time to time.
I have planned to go for FundsIndia, registered online to open and account with them.They will assist to bring the scattered existing Mfs under thier service, will start buying MFs as per your suggestion once the account is all set.
I need your comment on the following issue:
As I missed to fill my existing policies information on the proposal form, I put a mail to Customer care of ICICI Pru life, they asked me to send a Letter to their manager with the details of the Existing policies, which I sent and got acknowledgment for the same.I received the Policy Bond(certificate), but with the xerox copy of the initial proposal form which had the “Existing Policy” information as ‘No’.There is no mention of existing policies in the Policy document.Should I always keep the “acknowledgment mail” with the Policy document as a proof, for future reference, in such case?
Good for your investment part.
It is always better to have a physical copy (as well as the original communication, in this case email) of the communication. You never know when you will need them.
I dont think this will be an issue anytime, but you will not lose in case of even a highly improbable issue.
Hello Srivy,
Did you get any response from ICICI? That would help others.
Regards,
Trishit Ray
Hi Trishit, I put a mail to ICICI to include the existing policies details. They asked me to put a formal mail addressing the manager and send the self attested scanned mail to the concerned. They have acknowledged for the scanned copy I sent.I am waiting for the next step i.e. medical tests, a call from them in this regard.While in the meantime, I have requested an LIC agent to come by as I was interested to get some Term insurance for 25 lac.The guy finished the formalities like filling up the application and got a call to undergo medical tests last sat’day.Like I read in many forums, you will get LIC policy delivered in no time, but the online policies (ICICI) does take time. At the moment, I am patiently waiting!
Will update you all, once I have a status change.
The KISS (Keep it simple and stupid) Principle applies here (You probably understand it too).
1. Have a contingency fund of about 1 lakh (~ 3months expenses). This is for liquidity option. You can keep it in FD / short term debt plans.
2. You should take a life insurance (term plan, preferably online) of about 1 crore for a period of 25 years [calculated as 60k x 12 x 10 (rule of thumb, 10x annual pay)=72lakhs + 16 lakhs home loan liability=88lakhs, rounded off towards higher slab]. Your current 3 policies do not give you much cover. But you can keep them. Reason being, in case of actual death, these 3 policies will pay your family and the term insurance company wont be able to “not pay” since others have paid. 25 years is more than enough. You can choose from aviva, icici, aegon religare in order of increasing premia.
3. Go for 2 diversified funds. any two from fidelity equity, reliance regular savings fund-equity, templeton india equity income, quantum long term equity, hdfc equity, hdfc prudence. You can also remove money from the other 2 funds into the newer funds, or you can let them remain there (it actually doesnt matter much). You can also start SIP in sundaram select midcap, but doing so presently will skew your equity portfolio towards a distinct mid-cap orientation. Though it is not bad, but for a largely automated portfolio, it is best to keep a large-cap bias.
4. gold etf. There is no role of gold for you at present. You may do so, only if there is a short-medium term goal of daughter’s marriage. Over a long period of time, diversified equity fund will give you a better return.
what not to do!
1. No child plans. Ask your agent, if they themselves have invested in them!
2. No more insurance plans, whether traditional or ulip.
Thanks a lot, Ramesh, for your time and for ur valuable suggestions.I need ur quick comment on the following points:
1. Should i increase my Life cover, with LIC Term policy or any other Pvt player is fine? Also there has been some discussion on splitting it as 2 policies from different players in this blog.Should i be following that strategy , or, as u mentioned, I have 2 LIC policies already though they are not strictly Term Policies,that could be used as “double proof” and take only some Pvt company policy for the full amount?
2. Also in this term policy, should I look for Accident benefit, permanent disability etc Riders?Does it matter much?
3. On my current holding “ICICI PRU Lifetime pension” which i paid 6 years premium (10K p.a.).Should I continue this? The current value is 90K as per latest market news.
Thx in advance.
1. In my opinion, get as much cover as required, without too many complications. A pvt player is fine and recommended. You dont require splitting. The logic you have expressed is my view also.
2. No need for any riders. The riders are too restrictive to be of any major benefit.
check this one. http://www.subramoney.com/2011/06/indians-are-under-insured/
3. Regarding the Ulip, you have already undergone the major front-loading charges. So, now you need to look at the premium allocation charges (if they are there or not). The corresponding charges in MF are 0%. Compare the FMC too (MF have 2.5% max). You may be getting additional amounts also. It all depends upon the particular policy. So go through the wordings of the policy.
Hello Ramesh, thanks for your guidance so far.I took online Term Plan from ICICI- IProtect today for 50Lakhs..
I have a question for you.
As I filled online form with the help of Policy bazar, he checked with me if I have already any Insurance cover. I told him I have LIC Triple cover, LIC Jeevan Sree (took in 2002) and ICICI Lifetime Pension. But he insisted if any Pure Term Plan which I said No.
Are the above plans doesnt count as Life cover plans?In the Proposal document, he has finally filled as No.
Q) Do you have any existing life insurance cover with other companies?
A) No
Is this OK , or will it count as wrong information?
If this is wrong, what’s the recourse I have now as I have paid the premium online and expected to send the proof documents and some medical tests yet to be conducted.
Many Thanks.