Express Clinic

Name: Lalit Narang (35) and Pinky Narang (34)

Reside in Ludhiana

Profession: serviceman in a private company

Net annual income

(Rs 3 lakh)

Status & goals

Lalit is the sole earning member of a family of four consisting of self, spouse and two children — one son and a daughter. Lalit is working as serviceman in a private company. At present, he stays with his parents in Ludhiana.

His parents are not financially dependent on him.

He wants to plan for higher education and marriage of his two children.

He wants a systematic financial plan to avoid any pitfalls in the future.

Needed

Financial roadmap which can help them plan a better future for their children and a secure retired life

Net monthly surplus

Rs 5,700

existing investments :

EPF : R20,000

ppf : R80,000

CASH IN Bank : R40,000

FD : R20,000

GOLD : R30,000

Equity Mutual Fund : R24,000

ULIP : R27,000

Findings

EMERGENCY FUND: Lalit has maintained emergency fund equal to three months expenses

LIFE INSURANCE: Lalit Narang 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 which will give him benefit of power of compounding.

PROVIDENT FUND: He has nominal balance in EPF and PPF.

Recommendations

Emergency Fund: Lalit needs to keep R60,000 in savings cum bank FD or in liquid fund 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: Lalit should have life Insurance coverage of at least R35 lakh. He has bought five insurance cover for himself and one for his wife. He is advised to surrender ULIP and IDBI Endowment plans, as they are neither insurance plan nor investment plan. He can continue his LIC plans as debt portfolio. It is advisable to buy R35 lakh sum assured life cover through online term plans which is least expensive. It will cost around R5,750 p.a.

... contd.

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