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Can you give suggestion on my existing investments

Can you give I am 47 years of age. I am the sole bread earner of my family of 4 i.e, me, my wife, and my 2 daughters (19 and 12 years old). my monthly income from the salary is @1.30 lacs. my current liabilities are 4.25 Lakhs of balance home loan and 50,000 of balance car loan. my assets 2 flats (present worth of @ 1.10 Crore) and my investments are 8.5 lacs in EPF, 4.0 lacs in PPF, 3 lacs bank FD 5.5 lacs in mutual funds, 2 HDFC ULIP of 50000 each (7.2 lacs current values total - 3 years premium paying balance), 2 Kotak ULIP of 75000 each (current value 8.5 lacs total - premium paying term balance 11 years), 3 ICICI Pru Life ULIP of 50000 each (current value 5.4lacs - no further premium paying for 2 ULIP and 3 years balance premium paying for 3rd ULIP). I have invested in HDFC Top 200 (2000 Rs SIP), HDFC Equity Fund (3000 Rs SIP), ICICI Pru Value Discovery Fund (2000 Rs SIP), Birla Sun Life Frontline Equity Fund (2000 Rs SIP), and recently started in Reliance Tax saver ELSS (2000 Rs SIP), L&T India Value Fund (5000 Rs SIP), L&T Prudence Fund (Rs 5000 SIP), SBI Bluechip Fund (5000 Rs SIP). I would like to know whether I should continue in the mutual funds selected or stop in few funds. Also I would like to know about your advise on the ULIP. I have a medical policy provided by my employer of 6 lacs and a personal medical floater policy of 8 lacs. Also I have a term insurance plan of Rs 60 lacs. Please give your critical advise on the queries mentioned above and also any other advise?

Apr 17, 2017 by Hemant, Pune  |   Financial Planning

Here are our observations and suggestion on your query -

1. Your first priority should be to pay off your car loan and home loan. In case you have some surplus, do pay back the loans first and then invest. Investing for future while you are having liabilities in present do not make good sense.

2. We will not comment on ULIPs as these Companies have more than one ULIP product and each is different from the other in terms of charges. We do not which plan you have invested in. Though ULIP is a good concept of combining investments and insurance together, the cost of fund management in ULIPs is very important. Having a term plan for life risk coverage and mutual funds for wealth creation could be the best solution.

3. Though you have taken a term plan of Rs 60 lakhs, it is inadequate considering your income levels. Your current salary is 1.30 Lakhs which comes to annual Rs 15.60 Lakhs per annum. You should take life cover of at least 15-20 times of you annual income. Therefore, you should consider increasing the life cover to around 2-2.50 Crores at least in order to protect the financial future of your family.

4. You have selected good funds for your SIP. But, closing the SIP in HDFC Equity Fund and increasing exposure in BSL Frontline Equity Fund and ICICI Prudential Value Discovery Fund may be a wise move.

5. Your monthly SIP of Rs 26,000 could get you a corpus of around 73 Lakhs after 10 years (we have assumed 10 years only as your are now 47) and assumed annual returns of 15%.

6. Given current rising medical expenses, floater policy of Rs 8 Lakhs is inadequate. You should definitely consider increasing it.

7. Your daughters are aged 12 and 19 and hopefully you have planned for their higher education and marriage. If not, that is a very essential financial goal for which you should accumulate funds now and also start saving immediately.

Hope the above gives you good guideline in arranging your finances well. Thanks.

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