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Q. I am a 20-year-old bachelor. I am a government employee (part-time, but permanent). My monthly income is about ₹15,000. Please help me in sketching drawing up a holistic financial plan.

Tamire Prasanth

Aarati Krishnan answers

A. You are right to start with a financial plan. To have a really personalised plan that you can go with for life, it would be best to take the help of a qualified financial adviser. But, if you are keen to make a start by yourself, you need to list down the financial and life goals that you may have today, along with the timelines you have in mind for achieving them. If your goal, within 3 years, is to take a holiday or buy a vehicle, that would be a financial goal. If you want to pursue higher studies, that would be a goal too. If you would like to purchase a house or marry, those would constitute goals too. This is apart from certain common goals such as retirement that we all have. If you have a family whose needs you plan to meet, do list their goals too.

Once you are able to list your goals, try and arrive at the targeted amount you will need to fulfil those goals. This will require you to add inflation to the current money value of those goals. There are many online calculators that allow you to arrive at the inflation-adjusted value of a goal 3 years, 5 years, 7 years and 10 years from today.

Once you have the timelines and the value of each goal, you can begin to create portfolios towards each. For less than 3-year goals, invest in bank recurring or fixed deposits. For 3-5 year goals, consider the NSC, post office 5-year deposits, corporate bond funds and PSU and banking funds. For 7-year-plus goals, consider SIPs in equity funds. Index funds will be your easiest option. For really long-term goals, open a Public Provident Fund (PPF) account and start investing in it. You can also open an NPS account and start saving towards retirement.

Along with planning for future goals, you need to make a plan to protect your existing assets too. For this, get a health cover of at least ₹5 lakh to meet your medical expenses in case of emergency. If you have parents or other dependents, get a pure term cover so that your nominees get a lump sum in the event an unfortunate event happens to you. Also, have 6 months’ worth of your living expenses in an emergency fund in a bank deposit to take care of other emergencies or contingencies for you and your family.

Q. I am 27 and an Indian Railways employee. My mother is 52 and father, a cardiac patient, 62 years old. They are not covered under any health insurance policy. Can you suggest the best policy for my parents and can I claim income tax benefits on the premium?

SWARAJ S.

K. Nitya Kalyani answers

A. A group insurance scheme offered by your employer is always the first option to consider for family members.

Especially when your employer has a network of hospitals and medical facilities as yours does. Your formalities for getting them into the scheme and availing benefits would be minimal.

You can study the coverage offered under the scheme and supplement it carefully with a hospitalisation policy to enhance benefits or a critical illness policy that gives lump sum benefits.

You can choose a policy that covers your father for cardiac care, though there will be a waiting period, so that you have additional coverage and options for treatment in different hospitals.

The premium you pay for your parents for any commercial health policy brings you benefits under Section 80D of the Income-tax Act, 1961 under certain terms and conditions.

(K. Nitya Kalyani is a business journalist specialising in insurance & corporate history)

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