I am a senior executive who is going to retire 11 years from now. I am now earning about Rs. 22 lakh per annum. I have a son to be married in 2-3 years, while my both daughters are married. My wife is a home maker. I have my own flat, although I wish to have a bigger one. I have not saved anything except the provident fund of my existing company. I may make further savings during the last 7-8 years of my service.
- Which term insurance plan is right for me and for what duration?
- Should I choose a policy term for 10-11 years only as I might face difficulty in paying premium after retirement?
- Should I start investing in MFs through SIP or start an RD for a corpus for post-retirement living.
- Ashok Kathuria
At your age of 50, you are pretty late in buying insurance and in saving for your retirement needs. However, planned properly it may still be possible to lead a comfortable life. Your first question is regarding life insurance. You may go for an online term plan. But insurance companies may ask for a pre-policy medical check-up before insuring you. Max Life Online Term Plan, Aviva i-Life Term Plan and Canara HSBC OBC Life Insurance eSmart Term Plan are a few good policies at your age. Canara HSBC OBC Life Insurance eSmart Term is the cheapest policy for a healthy person at your age. You must disclose all material facts while filling the proposal form to avoid any problems later if a claim arises.
As far as duration of term insurance is concerned, it should match your working years until retirement. In your case, 11 years should be the policy term. There is no case for insurance after you retire because you will then no longer be taking care of the financial needs of your family.
As mentioned, you have savings in EPF which is purely a debt investment. Exposure to equities is a must to fight inflation. Start investing in equity mutual funds on a monthly basis through SIP. Start switching your funds to debt when 3 years are remaining to your retirement. ICICI Prudential Focused Bluechip Equity, HDFC Top 200, Quantum Long Term Equity and Birla Frontline Equity are a few funds that should suit you well.
This article was originally published on November 04, 2014.
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