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POSTED BY ON February 19, 2013 1:03 pm COMMENTS (14)
My name is Rajesh Gupta. Age 29. Living in Pune and I am software professional earning around 11 lpa. My simple aim is to save as maximum as I can. I have currently following liabilities/expenses.
1. Home loan of my native place. Currently only 3 lacks are remaining to pay. EMI is coming around 9000 p.m.
2. Home loan taken in Pune. This is around 33 Lacks. EMI is coming around 32000 p.m. The possesion of this property will be given in June 2013.
3. My mother has both kidneys not working. So she has to come through dialysis twice in a week. Currently this is performed in my native place. So cost is coming around 10000 p.m. In Pune, this will cost me more than 20000 p.m. I am planning to take her here in near future.
4. Currently living on rent in Pune and this rent is 10000 p.m.
5. I have term insurance of LIC (Amulya Jeevan) which premium is coming around 7000 per year.
6. I have also LIC policy Jeevan saral. I am paying 3000 p.m. for this.
7. In EPF, my + employers contribution is coming around 9000 p.m.
After that I am manage to save 7-8K per month. Please suggest me where and how I should invest money. I will have 10K more after getting possesion of my house.
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Thanks Ashal. I am thinking on it. I have one property in UP that I am planning to sell out to bring down my liabilities.
Dear Rajesh, As your mother’s medical condition, demands that she is to live with you. In my personal opinion, please sell the native home. pay off the outstanding loan amount for that home & use the remaining amount to bring down your existing loan liability for Pune house.
Please think over it.
thanks
Ashal
Dear Asal, yes my mother is living in the home loan house at my native place.
Dear Rajesh, is your mother living in the home loan house at your native?
Thanks
Ashal
Thank you sir for the prompt reply. What does paid up mean for the LIC policies? By searching on internet, I come across that this will reduce the sum assured but will insurance still covering life?
Yes. You stop paying premiums. The cover reduces and so does the sum assured which you will receive at the end of the policy.
How much I will get if I make it paid up and when this amount will be given back to me?
If I surrender now. I will get following as per LIC site.
Total premium paid (excluding riders) : 3000 * 48 = 144000
Surrender value = (Total prem. paid – first year premium) * 0.9 = (144000 – 36000)* 0.9 = 97200.
So is it wise to surrender it or make it paid up?
Use this calculator to find out:
http://freefincal.wordpress.com/2013/02/02/insurance-policy-surrender-value-paid-up-value-calculator/
I am thinking on surrendering Jeevan saral. The term is of 16 years and 4 years are already gone. Currently I don’t have any contingency fund or anything.
Get working on the contingency first right away. Investing can come later.
If you have claimed 80C with Jeevan Saral than make it paid-up dont surrender it as the deductions will be cancelled and you will have to pay tax on them.
I did not claim 80C on my jeevan saral policy. I claimed it through EPF and home loan principal.
So is it good to surrender this policy instead of making it paid up? Because I do not claim 80C on Jeevan saral policy. Will LIC deduct any TDS on surrender amount?
No TDS will be deducted. You could surrender the policy. Plan for your goals and invest wisely
When you say you will have 10 K more to invest have you taken into account the increase in dialysis cost when shes moves to Pune? Other minor medical expenses for her may also increase.
Depending upon the age of your Jeevan Saral policy you need to consider paid-up or surrender options.
What is the term sum assured? Are you sure it is enough to take care of your mother in case of an eventuality.
Do you have enough contingency funds to take care of monthly medical expenses and emis?
Do you have adequate medicalim for yourself (assuming its not possible to get one for your mother now)
You should also create a small corpus for your mothers future hospitalization.
Once you are comfortable on all these fronts then you can start investing.
Invest with a goal. For now that can be retirement for you.
Start investing in good mutual funds. You could consider a balanced fund like HDFC prudence for a start or a a multi-cap fund like quantum long term equity
You could use this setp-by-step guide to choosing a MF
http://freefincal.wordpress.com/step-by-step-guide-to-choosing-a-mutual-fund/